How millennials can score in the game of wealth building.

Author:Graves, Earl G., Jr.
Position:Executive Memo
 
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Quick question: When should you start planning for your financial future? I have posed that question countless times to scores of young professionals--including my own children. The right answer, no matter how young you are, is right now.

Most millennials--those between the ages of 18 and 35-- believe they have plenty of time to financially prepare for post-work life, especially since it won't arrive for another 30 or 40 years. I have often been bewildered by the fact that a good number actually believe sound money management is spending every dime until the next payday. Those who embrace that short-sighted, paycheck-to-paycheck practice often make colossal financial blunders or lack the reserves to handle emergencies that could have been manageable with a bit of planning. They find themselves forced to resolve major setbacks and play catch-up during peak-earning years instead of maximizing assets that they could have started accumulating at the onset of their formative professional years.

Money is not just for consuming but for investing. The acts of financial folly I've witnessed remind me of so many young athletes who finally make it to the pros and earn multimillion-dollar paychecks but whose stories tragically end with them winding up bankrupt because they invested in a lavish lifestyle instead of a stock portfolio that could have provided financial security after the cheering stopped.

This lack of disciplined money management comes down to aptitude and attitude. A recent Junior Achievement study reveals that 51% of millennials had not held a conversation related to handling their finances with even one person: only 21% talked with someone who has a financial background. Moreover, a 2014 Bankrate.com study shows that the majority of young Americans have an aversion to the stock market. For instance, 39% of respondents aged 18 to 2 9 say cash is their preferred way to invest money that they don't need for at least 10 years. This approach represents a troubling trend for a generation experts say has the greatest savings burden when it comes to building a healthy retirement nest egg.

I had the...

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