Financial Planning 101 For Millennials: Here's What You Need To Know

According to Investopedia, Millennials are facing the most uncertain economic future of any generation since the Great Depression! Check out the video to learn all about it!

Welcome back to Bold TV with Philip Michael. Be sure to like, comment, and subscribe to Bold TV for other finance news, and all things Bold.

Joining Philip Michael today is the Advanced Case Specialist at the National Financial Network, Todd Bass. We talk about how to help young people and their families in the best financial position for their future.

What is the biggest misconception young people have about preparing for their future?

The biggest misconception is that young people, especially Millennials, need to have money for them to utilize a financial plan. Warren Buffet said, “You’re supposed to save and then spend, versus spending and then saving.” Younger people are always trying to flex and Bass thinks the biggest flex would be to show off your savings and how you are growing your wealth.

What are the first steps someone should take to set themselves up for financial success?

The first step is to find and get in contact with a financial advisor you are comfortable talking to. These financial advisors are like doctors and lawyers in the sense that they need to know the entire situation in order to assess how to best help you. When you reach out to a financial advisor, you have to make sure they are an accredited financial advisor and they have the pedigree. Equally important, you want to ask all the questions you have. This helps you and the advisor to understand the situation better. If they can’t answer your questions, then they aren’t the right financial advisor for you. Next, you want to work out a budget with your financial advisor. Younger people don’t need a ton of money to start to create and put together a financial plan.

What is one tip you would give young people to get started?

Bass thinks the first thing you should do is read Warren Buffet’s essays that he published from the Berkshire Hathaway Shareholders Meetings. These essays contain many tips that can be transferred to any young person’s real life situations. Also, having a budget and a plan even on your own is critical. Then, Bass warns against getting on Robinhood and investing in things like AMC and GameStop. Bass thinks these are all fads, even Bitcoin. Money can be made but they are not safe. They are short-term. Instead, set a strong foundation for your financial future and then build on top of that.

Bass tells us to set up a core and then you explore. What is in the core?

One example of a core is like a whole life insurance policy. There’s actually a living benefit there. Whole life insurance policies have a cash component, an investment component and a savings component. A dividend gets issued by a mutual company into your whole life insurance company and also a cash component that will grow on an annual compounded basis. This cash and dividend growth when combined can perform better than some of these index driven accounts or putting your money into Robinhood. For the core, you want to be risk averse so avoid market risk and use for the long-term.

What is the explore?

The explore is for the crypto. This is for shorter horizons. Investments that you are willing and able to lose.

Do you want to start your own financial plan? Let us know in the comments below!

You can learn more about the National Financial Network here

You can reach out to Todd Bass directly at this email: todd.bass@natfin.net

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