#### Building a time machine to your financial future through responsible input/output

Most things we deal with can be broken down to simple input/output. Your financial future is no exception. By understanding this principle and applying it to your finances, you can build a metaphorical time machine that transports you to your desired financial future.

>Act simply, think largely, invest responsibly.

Not sure where to start? You're not alone. Every financial journey begins with a single, intentional step.

### Building Your Financial Time Machine

In personal finance terms, simply put, your income is your input while expenses are your outputs. The beauty of this system lies in its simplicity: consistent, responsible control over your inputs and outputs will lead to significant and predictable financial growth.

1. Set your destination before you start your journey. You need to know where you're going. Do you want to retire at 50? Buy a house in 5 years? Have $1 million in investments by 45? Be specific and realistic.
2. Calculate your route. It's time to map out how to get there. Again, BE SPECIFIC. Use math to complete a top-down approach to this plan. We can start from the goal and back into exactly what it means for our day to day budget and required weekly/monthly savings.

![investant-financial-planners-theme-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1714544567/investant_financial_planners_theme_stock_photo_57ff6eaffb.jpg)

### Calculate your route

The [Investant Savings Calculator](https://investant.net/tools?block=SavingsCalculator) is designed to transform your financial goals from abstract dreams to concrete plans. Let's walk through how to use it:

Let's build out a goal for a 25 year old to reach $1 million invested by age 45.

- Initial Deposit: How much can you invest right now? This is your launch pad. Let's start with $5,000.
- Monthly Contribution: Commit to a consistent monthly investment. For our $1 million goal, let's aim to invest $1,850 monthly (Come back and change this value to see how it impacts your end result!).
- Time Period: We recommend setting this in years. For our example, that's 20 years (from age 25 to 45).
- Annual Interest Rate (%): Currently, high-yield savings accounts are offering between 4% and 4.25%. Check out our detailed guide on [The High Yield Savings Account in 2024](https://investant.net/blog/TheHighYieldSavingsAccountIn2024) to maximize your returns. The average retirement account makes between 5% and 8% annually. Let's use 7.5% as though we are depositing these savings to an aggressive (stock heavy) retirement account.

>Starting at 25 vs 30 can mean a difference of HUNDREDS OF THOUSANDS of dollars! See how adding 5 years can make a dent on the [Investant Savings Calculator](https://investant.net/?block=SavingsCalculator)!

With a $5,000 initial deposit and $1,850 monthly contributions across 20 years at 7.5% annual interest rate, we will have a Total Investment of $1,015,218.58 at the age of 45!

If you're just getting started, you may be thinking that $1,850 invested per month is not doable right now. But, we can make a plan to get there. Your next steps to meet this goal should be to take a total look at your income and expenses today, and use this new understanding of what monthly savings are needed to decide where your income and expenses need to be. To comfortably put away $1,850 per month while living a [middle class lifestyle](https://www.forbes.com/advisor/banking/average-monthly-expenses/) in America today (average monthly expenses of $6,081), you would need to make $7,931 per month or $95,172 per year.

A $95,000 salary is in the [74th percentile](https://dqydj.com/salary-percentile-calculator/) of American Workers based on full-year 2023 and a completely achievable wage which can be surpassed through hard work, dedication, and discipline.

Pro tip: This isn't just a number. This is your potential. Whether you're a recent grad, a new professional, or someone looking for the next promotion, this goal is within reach.

### Periodic Calibration

Your financial time machine isn't a set-it-and-forget-it device. Schedule quarterly or semi-annual reviews to:

- Assess your progress
- Adjust monthly contributions
- Rebalance investments
- Account for life changes

Start small, but start now. These periodic reviews are a great chance to have a conversation with yourself and/or your partner about where you financially stand and the actions you're going to take going forwards. If you don't like what you're seeing, have the tough conversation then and there.

>Your financial future is not about timing the market, but time in the market.

### The Investant Promise

At Investant, we believe in empowering professionals like you to take control of your financial destiny. Our literature, tools, and insights are designed to transform complex financial strategies into actionable, understandable plans.
Your financial time machine is ready. The coordinates are set. All that's left is for you to take your first step.

Are you ready to invest in your future, one strategic step at a time? [Sign Up](https://investant.net/login?form=SignUp) for FREE today for all that's new with Investant!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Building a time machine to your financial future through responsible input/output

The Financial Time Machine

While many view patience as "taking things slow", the truth is that patience has nothing to do with speed and everything to do with mindset. Practicing patience as an investor is vital for long term financial health and well being. Here is how we can all be The Patient Investor.

>Investant Definition of Patience: "The ability to endure stressful and uncomfortable circumstances **with calmness**."

### Market In Distress

Whether the market is trending up or down, the patient investor will make consistent contributions and trust the process.

It can be difficult to keep calm in turbulent markets - especially when the majority of our wealth is held in securities and instruments directly tied to market performance. This is why our recommended approach to personal finance management - including holding 3 to 6 months of expenses in a high yield savings account ([HYSA](https://investant.net/blog/TheHighYieldSavingsAccountIn2024)) - is intended to help alleviate any stress from investments. The patient investor is not worried about short term market movement as they can be confident they are properly positioned for long term financial health.

[Read More](https://investant.net/blog/CreatingaFinancialSystemforyourMoney) About The Investant Approach To Personal Finance Management

### Set Up For Success

As mentioned earlier, the patient investor is setup with a financial system that promotes long term confidence. While those with strong patience can maintain the calm in any environment, it helps to create an environment with peace in mind. In our day to day lives, this might mean choosing to take the back roads instead of the highway every now and then or staying in on a Friday night. In personal finance, this can be created by having a healthy savings and refraining from keeping all your eggs in one basket.

When you have a healthy savings, it's not worrisome when the car needs to be repaired or the hot water heater needs to be replaced. If you lose your job, you're prepared! The day to day stress of these life events don't weigh over you because your financial system accounts for the bad just as much as it does the good.

### Investant Can Help

At Investant, we're committed to shedding light on the best practices for new professionals to find long term financial success! Join our newsletter and follow us on [Twitter/X](https://twitter.com/InvestantGroup) for more!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Practicing patience as an investor is vital for long term financial health and well being.

The Patient Investor

I’ve known many financially successful individuals throughout my lifetime. It’s incredibly easy to get caught up in the idea that more money will make you happier. After all, more is better than less isn’t it? The irony of life, is the harsh reality of it. Money can remove unhappiness and relieve stress but overall does not have a large impact on day-to-day happiness. If it did, you would think that the celebrities you read about who blew up their lives and are living in misery would be happier than us. But the law of diminishing returns and hedonic adaptation can be easy to understand but hard to accept. 

The most dangerous assumption to carry, in my opinion, is the idea that more money = more happiness. It certainly doesn’t hurt to have a larger nest egg, but I’ve seen money come with a range of problems. 

One individual I met (we will call them Jane) was an extremely intelligent lawyer who was a partner at a small firm. Jane made very good money. However, in her mind it wasn’t a lot. She knew people she worked with who were far wealthier. This became a big source of misery for her. She ended up taking it out on her family and friends and burning bridges in her personal life. Behaviorally, we can see that although reality shows she is by all metrics (successful) in her career, due to social comparison and an inflated sense of self, she robbed herself of enjoying the fruits of her labor. In this situation I would define a loose equation for happiness as:

**Happiness = Income - expectations**

_by inputting your numbers you can see where you fall on the happiness spectrum._


**Jane’s Happiness**

>$150,000 (income) - $170,000 (expectations) = negative (happiness)

One other individual I met (we will call him Steve) was Jane’s boyfriend and an extremely content individual. He loved his office job. He was less financially successful than Jane, but much happier. He always underspent his income, had low expectations, and was intrinsically motivated to work hard for himself and his team. His hobbies were inexpensive and valued relationships over material goods. They were financially incompatible individuals which later showed when they broke up. 


**Steve’s Happiness**

>$90,000 (income) - $60,000 (expectations) = positive (happiness)

It is extremely easy for an individual to attribute their financial success solely to their skill or intellect and ignore or dismiss any factors that were outside of their control. Some factors being: who they were born to, the people they met in their career, their ability to pay for expensive schooling, etc. Successful individuals can quickly fall into the trap of falsely assuming that their financial success was solely due to their abilities. This is a prime example of survivorship bias and overconfidence and can lead to successful individuals perceiving themselves as subsequently better than less successful individuals and inadequate in respect to their peers.

Money as financial writer Morgan Housel put it is “[The Greatest Show on Earth](https://collabfund.com/blog/investing-the-greatest-show-on-earth/)” and reveals a lot about human nature and behavior. Re-examining your beliefs around money is incredibly important. There are so many ways to view it. Some people view money as a tool to build and live a better life, while as others use it as a benchmark of success to compare themselves against others. Your relationship with money will have a huge impact on your day to day happiness. 

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Exploring the relationship between money and happiness.

Money and Happiness

Worrying about finances can be mentally taxing. More people spend hours micromanaging their finances than they do enjoying the things they love. In this blog post, we will be walking through how to set up a system that works for you so you can spend less time focusing on money management, and more time on the things you love. Here is a personal finance waterfall that you can implement into your financial system.

### 401k
If you have a 401k through your company, the money contributed to this account will be taken out of your paycheck before the money hits your checking account. It is recommended that you contribute up to the employer match if your employer offers one (more if you're able). Check with your HR department to get this set up. 

### Checking Account
The first account we will start with is a Checking account. This will be your financial “home base.” On payday, your salary will be deposited into your checking account, and from there we will tell our money where to go. You can use any traditional or online bank for this account.

### High-Yield Savings Account
The next account type that we want is a “high-yield savings account.” This account will be your emergency fund. It is recommended that you keep 3-6 months of living expenses in this account in case you lose your job or your car breaks down. You can also save up for big purchases here, as this account will earn more interest than your checking account. You will set up a recurring transfer to this account and fund this first before moving on to investments. I personally use Wealthfront for my HYSA (high-yield savings account). 

### ROTH or Traditional IRA
If you are in a low tax bracket, a ROTH IRA will be the next account you’ll want to contribute to. Contribute as much as you can afford, the goal is to have monthly transfers going into this account. You can later up the amount you contribute as you earn more money later in your career. I personally use Vanguard for my ROTH IRA. You'll need to set up recurring transfers on the platform your ROTH is on and link your checking account to the platform. 

### HSA
If you are young and healthy you may want to consider sending money to a HSA. This account requires you to have a high deductible health plan but is triple tax-advantaged. You can contribute extra money here for medical expenses and some HSAs allow you to invest and grow your money tax-free. This can be used as an additional retirement account as well. Talk to your HR department to see if your company offers an HSA and ask them how to enroll. 

> Here is an example of the financial system I use for my own money.

![Personal Finance Waterfall](https://res.cloudinary.com/dnmr13rcg/image/upload/v1725229248/Artboard_1_78986396c8.png)

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Create a financial system and automate your money.

Creating a Financial System for your Money

You should have opened a high yield savings account (HYSA) yesterday. Here's why.

As of August '24, the average bank savings account offers 0.46% ([FDIC](https://www.fdic.gov/national-rates-and-rate-caps/monthly-update-august-2024)) while USD inflation stands at 2.9%, slowly recovering from the recent 9.1% high in June '22 ([YCharts](https://ycharts.com/indicators/us_inflation_rate)). Even with these inflation levels and 2-year treasury bills paying 3.99% on an inverted yield curve ([YCharts](https://ycharts.com/indicators/10_2_year_treasury_yield_spread)), many large banks are not passing these higher rates on to their common account holders.

### The Big Bank Problem

>"The truth is, Big Banks don't feel the need to compete."

Bank of America and Chase Bank offer just 0.01% yield on their consumer savings accounts with numerous stipulations on withdrawals, minimum deposits, and even fees. Many online banks, however, are offering upwards of 5% APY on a HYSA. So why is it that many big banks don't offer High Yield Savings Accounts?

Some argue that big bank operations are too expensive compared to online banks, which can provide services to customers without brick-and-mortar locations or expensive sponsorships like NFL stadiums. It is true the big banks have higher operating expenses and their physical branch networks are becoming less efficient than in previous decades. Through July '24, 539 branches across the US had closed ([Daily Mail](https://www.dailymail.co.uk/yourmoney/article-13621197/bank-branch-closures-wells-fargo-chase-bank.html)). And now through August '24, 277 branches have closed in the state of California alone - the most closures since 2020 ([FrankNez](https://franknez.com/more-massive-california-bank-branches-are-now-closing-for-2024/)) with the pandemic event.

>Efficiency Ratio = Noninterest Expense ÷ Total Net Revenue

>Long Term Debt Ratio = Long Term Debt ÷ Total Assets

In their 2023 annual report, Bank of America reported a 66.79% efficiency ratio and a long-term debt ratio of 9.50% ([Bank Of America](https://d1io3yog0oux5.cloudfront.net/_56c90f1f1d2a491bf6829a320ac7580a/bankofamerica/db/867/10038/annual_report/BAC+2023+Annual+Report.pdf)). Ally Bank, one of the most popular online banks, reported a 2023 efficiency ratio of 62.86% and a long-term debt ratio of 40.99% ([Ally Bank](https://www.ally.com/content/dam/pdf/investor-relations/2023-10k.pdf)) - a much riskier position than BOA. Based on this, we can say that the online banks spend less to make their revenue likely in relation to their operating in riskier environments.

However, these factors aren't the primary reason Chase and Bank of America don't offer competitive HYSAs. The truth is, big banks don't feel the need to compete.

![investant-money-roll-lincoln-face-wrapped.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1724455892/investant_money_roll_lincoln_face_wrapped_a795b4102c.jpg)

### Lack of Competition

JPMorgan Chase, Bank of America, and Wells Fargo alone hold 41.8% of the US market share ([FDIC Data via Wallet Hub](https://wallethub.com/edu/bank-market-share-by-deposits/25587)). The larger banks have earned customer trust and built their enormous market shares through decades of consistency and convenient banking practices for both consumers and enterprises. Many of us hold accounts with the same banks our parents used and are unlikely to switch. A Frost Bank Survey found that 44% of participants responded to have no plans to change their bank ([Frost Bank](https://www.frostbank.com/dam/Docs/Newsroom/NewsRelease/FinancialBelonging.pdf)). But why?

>"I think the biggest reason people don't change banks — and of course, I'm biased on this, but I believe it in my bones — they just don't know what some banks offer."
-Phil Green, Frost Bank CEO

While online banks are competing for consumer deposits through lower fee structures, higher returns, and more convenient practices, many big banks are happy to stay still because their clients are unaware of their competition.

### Take Action

At investant.net, we're urging you to take action by getting informed and opening a HYSA if you haven't already! Taking advantage of a HYSA to earn upwards of 5% returns on your savings and cash reserves is crucial in today's inflationary environment.

Some of our favorite options today in August '24 (who Haven and I use ourselves):

- Wealthfront  |  [5.0% Cash Account](https://www.wealthfront.com/cash)
- M1 Finance  |  [5.0% Savings Account](https://m1.com/earn/high-yield-savings-accounts/)
- SoFi Bank     |  [4.6% Savings Account](https://www.sofi.com/banking/savings-account/)

For more options, checkout [BankRate](https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/) to select and compare some other HYSA offerings! Whoever you choose, ensure they are FDIC insured and make the most of it!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Big Banks aren't cutting it. Why you should have opened a high yield savings account yesterday.

The High Yield Savings Account In 2024

Since the rise of the internet, brokerages have employed new tactics to get customers to broker trades consistently. One of these tactics is the rise of the “commission free” platforms. Confetti animations and gamified platforms have made it easier than ever for clients to broker trades using complex financial instruments that they reasonably should not have access to. The firms using this model very rarely disclose the risks of using these financial tools as they know that the more trades the client makes, the more money they will make off of either commissions or [payment for order flow](![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)). 

### Options are not Investment Tools

Options trading has become a popular term in recent years, with more young people associating options trading with “investing.” In reality, they are using financial instruments that are primarily designed to be a way of managing liquidity risks by major financial institutions. Options are risk management tools, not investment tools. Options have a unique way of making people think that they are generating income when placing a put or call option. This however is false. On a risk-adjusted basis, options traders do substantially worse over long periods of time than the buy and hold investor. 

### Day Trading is Gambling

Online influencers in recent years have notably used day trading as a way to sell courses to a young audience. Day trading by its nature involves the short term buying and selling of securities in order to capture a profit off of short term price fluctuations. The problem? Day trading is akin to gambling to the retail investor. They are trying to arbitrage a profit off of a guess on where a stock price is going. After the [hidden fees](https://www.forbes.com/sites/simonmoore/2019/10/01/the-hidden-costs-of-commission-free-trading/) that the client pays to the broker, they are highly unlikely to consistently make a good return on their capital. Day trading is a [zero sum game](https://www.investopedia.com/terms/z/zero-sumgame.asp). In order for you to win, someone else has to lose. It is not a sustainable way for retail investors to build wealth. Even the best hedge funds in the world cannot consistently beat the market over decades.

### What is Investing?

Investing at its core is putting your money into something (whether a business, real estate, index funds) with the expectation that it will produce returns for you over time. The stock market, is a giant distraction from the business of investing. The stock market reports the valuation of what millions of people are predicting the future will hold (which is impossible to predict). Responsible investing means diversifying your portfolio to avoid [idiosyncratic risk](https://www.investopedia.com/terms/i/idiosyncraticrisk.asp) and having reasonable expectations. For most people, investing means making diligent contributions to a well thought out portfolio over the course of a lifetime. Brokerages have purposefully employed tactics to make it easier for people to gamble with their money and use tools that are not to their benefit without the proper disclosure of what they are getting themselves into. 

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)


Brokerages have gamified investing at the expense of their clients.

The Predatory Gamification of Investing

A Career Plan is essentially captured in the statement, "I want to become X, and I will do Y to achieve this." It's not just a dream, but a clear step by step plan to reach a goal - a career goal. The average person will spend 1/3 of their life at work ([Gettysburg College](https://www.gettysburg.edu/news/stories?id=79db7b34-630c-4f49-ad32-4ab9ea48e72b)). Our work life will influence the energy we bring back to our homes which will influence the energy we bring back to work the next day. It is important we are taking steps everyday to move towards our career and life goals - which often go hand-in-hand.

>I want to become X, and I will do Y to achieve this.

### A Sense Of Security

It is relieving to know that you are on the right path to get where you are going. Have you ever had to drive across the country with not even a map to help navigate? Imagine the anxiety in that situation! Navigating a career is likewise a similar feeling if you do not have a clear map to know your destination and exactly how to get there.

By having this map, we can ensure every step is a step on the right path and audit frequently that we are still on track for our goals. It allows us to make changes when needed as well - because life happens, and if we go off course we'll know how to find our way back!

### What I Want To Be When I Grow Up

The question "What do you want to be when you grow up?" isn't just for children. As adults, we should continually ask ourselves this question to ensure we're moving in a direction that aligns with our passions and values. This section of your career plan should articulate your ultimate professional goal. It's not just about a job title, but about the impact you want to make, the skills you want to master, and the legacy you want to leave.

Consider not just the role you want to have, but the type of person you want to become professionally. This vision will serve as your North Star, guiding all other decisions in your career plan.

![investant-leadership-boats-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1721537640/investant_leadership_boats_stock_photo_8986845d59.jpg)

### Where Am I now?

Before charting a course to your destination, it's crucial to understand your starting point. This section of your career plan should involve a honest self-assessment of your current skills, experiences, and circumstances. What are your strengths and weaknesses? What unique experiences or perspectives do you bring to the table? What resources do you have at your disposal?

Understanding where you are now also involves recognizing any gaps between your current position and your ultimate goal. This gap analysis will help you identify the specific steps you need to take to bridge the divide between your present and your desired future.

### How Do I Get There?

**This is the ideal section to bring up with your current manager as they may be able to provide you with growth opportunities that align with your goal.**

This section is where you outline the specific steps you'll take to move from where you are now to where you want to be. Break down your ultimate goal into smaller, manageable milestones. What skills do you need to acquire? What experiences would be valuable? Are there certain positions or roles that could serve as stepping stones?

Be as specific as possible in this section. Instead of vague goals like "improve leadership skills," set concrete objectives like "complete a leadership training course by the end of the year" or "take on a team lead role in the next project." Remember, the more specific and measurable your steps are, the easier it will be to track your progress and stay motivated.

### How To Course Correct When Needed

A career plan isn't set in stone; it's a living document that should evolve as you grow and as circumstances change. This section should outline how you'll regularly review and adjust your plan. Set specific times for review - perhaps quarterly or bi-annually - where you'll assess your progress and make necessary adjustments.

>A mechanism for self-assessment.

Consider potential obstacles or changes that might require you to pivot. How will you handle setbacks? What signs will indicate that you might need to alter your course? By anticipating potential challenges and having a strategy for adapting, you'll be better prepared to navigate the inevitable twists and turns of your career journey.

### How Investant Can Help

At Investant, we're committed to supporting you at every stage of your career journey. Our platform offers a wealth of resources to help you create, implement, and refine your career plan. From financial planning tools that can help you budget for further education or career transitions, to expert advice on industry trends and job market insights, we're here to empower you. Remember, with investant.net, you're never alone in your pursuit of professional growth and success.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

What does a good career plan look like? Explore how to craft and refine your own.

Making A Career Plan

There is no debate that many young Americans are struggling with unaffordable housing and rental markets. This has made the wealth-building process a much more challenging and daunting task for young people than for previous generations. This article will be dedicated to highlighting some of the challenges that young people face and proposing actionable solutions that most young people are implementing to make the process easier.

### Young people are living at home for longer

Most people are cutting back on expenses, but young people, who can, have chosen to cut back on their biggest expense, housing. Staying with parents for longer has become the norm. A [Pew Research study](https://www.pewresearch.org/short-reads/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/#:~:text=In%20July%2C%2052%25%20of%20young,of%202.6%20million%20from%20February.) from 2020 found that 52% of Americans aged 18-27 are living with their parents out of necessity. Most major cities have had an expansion of “luxury” apartment complexes that command premium prices, and little to no expansion in affordable housing. Young people are opting out of living in "IKEA-renovated" apartment complexes and would rather give their rent money to mom and dad instead of corporate landlords. 

### Young people seek information to expand their financial literacy

The internet has become a great equalizer of information. Financial knowledge that was gatekept in the past has become more widely known. Young workers are using the time at home with parents to save and invest more than their boomer counterparts. 

### Young people are more conscious of spending

Many young people have figured out more doesn’t mean better and have opted out of expensive hobbies and turned to cheaper alternatives. Running clubs, hiking, biking, hangouts with friends and other recreational activities have taken the place of shopping and going to bars for many. 

### Young people are working multiple jobs

Gig work has become a side hustle for a lot of young people. People are taking up doordashing, ubering, freelancing, and other ventures on weekends and after their full time job. This combined with the ability to live at home has allowed them to make more than they would have just working a full time job. 

### Young people are living with multiple roommates
	
For some young people, moving in with parents isn’t an option. In HCOL (high cost of living) areas like New York and San Francisco, it’s especially normal to live with multiple roommates in order to reduce living expenses. As nationwide housing costs get more expensive, young people are living with more roommates for longer periods of time.

### Young people are thinking twice about going into debt

It’s no secret that college has gotten insanely expensive. More young people are deciding whether or not taking on student loans is right for them. With a bachelor's degree becoming commoditized and more and more companies looking for specialized employees in our technology reliance culture, young people are seeking certifications or learning a trade. 

### What this means

The housing affordability crisis coupled with an insurmountable mountain of student debt has led young people to relentlessly cut costs and work harder and longer hours. Data backs up that most [young workers are making less](https://www.cnbc.com/2024/04/03/survey-adults-say-theyre-doing-worse-financially-than-their-parents.html#:~:text=The%20share%20of%20people%20who,according%20to%20Opportunity%20Insights%20research.) on an inflation-adjusted basis than their parents were at the same age as them. With housing prices at a multiple of 8x the median household income, young people are delaying their move-out date and postponing having kids. The younger generation is showing resilience and are making sacrifices in order to stay financially afloat. 

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)


Young people are faced with unaffordable home prices, high rents, and struggle to enjoy the same quality of life as their parents. Here's what they are doing to get by. 

Housing Affordability's Impact on Young Americans

Personal finance is made out to be more complicated than it actually is. If you work to earn, spend less than you make, and invest the difference you are well on your way to financial independence. Scott Galloway (professor of marketing at NYU) creates a good equation for wealth:

>**Focus + (Stoicism x Time x Diversification)**

The **focus** portion of this equation is (for most people) in the form of a career. By focusing on your career and professional growth you will earn a paycheck, which can then be used to invest in assets that generate additional income. Unless you were born rich right out of the gate, most of us earn money through our careers. 

The **stoicism** portion of the wealth equation is just as important as focus. If you fall into any societal trap _(lifestyle creep, comparisons, keeping up with the joneses, etc.)_ you will sabotage yourself and end up in a worse position than if you just cared less about what other people thought of you. This is a very real risk. Data shows that 36% of earners making $200k+ per year are living paycheck to paycheck in the U.S. If your expectations increase faster than your income, it doesn’t matter how much you make. Your relationship between production and consumption will determine how wealthy you become, not your income. 

**Time** is the most valuable resource on the planet. Lose money? You can always earn it back. Squander time? It’s gone forever. Rich is a relative term. One persons idea of rich may be to have a fancy sports car, large house, lake house, and flying private. Whereas another person may think being able to cover their rent passively using investments is the coolest thing in the world. You define what you value. Not society. 

**Diversification** is incredibly important. Since it’s impossible to predict where the stock market will be 5 years, 10 years, 30 years from now, we want to remove as much [unsystematic risk](https://www.investopedia.com/terms/u/unsystematicrisk.asp) as possible. This can be done through diversification. The old saying “don’t put all of your eggs in one basket” illustrates the importance of diversification. Making all your money “in the form of a job” is not diversified. We want to spread out our risk so that we can sustain ourselves in the case of a job-loss. 

### Everything has a price

It’s important to know yourself extremely well. There are a million different paths that you can take in life, and you need to have a good understanding on what you do, and more importantly what you don’t want in your life. Everyone seems to want to earn more money, but very few people highlight the price you pay in terms of stress, anxiety, more student debt, more responsibility, and low job security. This tradeoff has led many people to work harder and longer hours for a prize that they later determined wasn’t all that important to begin with. 

### Financial Base
	
New graduates and regular people tend to build wealth slowly, and over long stretches of time. The average financial picture usually looks a little like this: 


>An IRA (Roth for young people, Traditional for some older individuals), a 401k plan offered through some companies (pensions in rare cases), home equity, potentially an HSA, and individual brokerage accounts. 

The 26-year old tech bro that gets rich from employee stock options at a startup after an [IPO](https://www.investopedia.com/terms/i/ipo.asp) is a rarity, not the norm.

### What does financial success look like?

Have little to no debt? Make more than you spend each month? Have enough to save and invest the difference and maintain an emergency fund? In that case, you are in good shape! 

Try and ignore the noise of influencers and other hustle culture promoters who treat life as a “race” that has to be won. They may have a lot of money from misleading people, but you can take pride in the fact that you aren’t nearly as obnoxious and vain as them!

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Setting up a financial base and exploring important habits to create lasting security for you and your family. 

Building a Financial Base

### The Weight Of Income

Before we can invest, save, and spend, we need income. For many new professionals, it can be overwhelming trying to decide what to do with that newfound income - it's not something we were taught in school. The goal is to feel confident in making the right financial decisions early on, so it doesn't lead to a delayed retirement, inability to provide the desired lifestyle, or overall financial stress and dissatisfaction down the line. Much of this stress can originate from uncertainty about job stability or doubts that one's career path can ever afford the lifestyle they envision. It can.

It's easy to feel like there isn't much money in your area of interest, but if you're passionate about something, chances are others are too and willing to pay for it. The journey may involve reevaluating career prospects multiple times before finding the right path. Don't be discouraged if your first job out of college isn't your dream job. Use it as a stepping stone and opportunity to gain valuable experience.

The key is to identify what's needed or desired, and fill that void with your skills and passion. Look for gaps in the market that your talents can address. It may take some creativity and thinking outside the box, but that's where the best opportunities lie.

### Mastering The Bend

>"The most successful professionals are those who can adapt and apply their skills to new challenges... Become a versatile problem-solver."

Don't limit yourself to a single definition or the name of your degree. Just because you studied finance, for example, doesn't mean the only option is a finance career. The degree likely equipped you with problem-solving skills that can be applied across various disciplines with tools like programming, communication, software, and analysis. Your abilities extend far beyond the confines of your major.

Even if an entire industry disappeared, problem-solvers would still be in demand. The most successful professionals are those who can adapt and apply their skills to new challenges. It's about mindset more than it is a narrow expertise. Become a versatile problem-solver.

![investant-man-with-investant-business-card-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1715833657/investant_man_with_investant_business_card_stock_photo_4e204e0ea9.jpg)

It all comes down to marketing – marketing yourself to employers based on the value you offer, not just your current skill set. What problems can you solve for them? How can you make their lives easier or their business more profitable? Frame your background through that lens.

Similarly, if you market goods or services directly to customers, focus on the value you provide to them. This is basic economics – meeting needs and desires in exchange for payment. But you have to make those needs and that value crystal clear.

### "Don't Put Me In A Box"

Think outside the box when it comes to marrying your passion with income potential. If you're passionate about painting but don't see a financially viable path as an artist or teacher, consider supporting the artist community in other ways. What persistent pain points or unfulfilled needs exist?

Put yourself in the shoes of your target audience, whether employers or consumers. What do they need in 2024 that isn't being adequately provided? Is there a new service, product, platform, or tool you could create to fill that void? Innovative solutions often come from a fresh perspective.

Never stop learning and growing your professional skills. Continuous improvement is vital in a rapidly changing world. In any position, continually look for new tasks to take on or ways to enhance existing processes. Can something be done faster, cheaper or automated? Does it truly need to be done at all? Develop a mindset of always raising the bar.

This hunger for optimization and commitment to finding better ways is what separates good employees from great ones. It demonstrates creativity, problem-solving skills, and a bias for action rather than complacency. These are qualities highly prized at the most successful companies.

With a continuous improvement mindset, a history of solving diverse challenges, and a propensity to take initiative, you'll have a competitive edge in the job market no matter your location. You'll be seen as a valuable asset who can drive positive change.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

The right mindset to approach employers and the workforce for new professionals.

Short stories on
wealth, behavior, and life.

The Financial Time Machine

The Patient Investor

Money and Happiness

Creating a Financial System for your Money

The High Yield Savings Account In 2024

The Predatory Gamification of Investing

Making A Career Plan

Housing Affordability's Impact on Young Americans

Building a Financial Base

A Career Mindset In 2024

Investant | Our Story

Short stories onwealth, behavior, and life.

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The Financial Time Machine

The Patient Investor

Money and Happiness

Creating a Financial System for your Money

The High Yield Savings Account In 2024

The Predatory Gamification of Investing

Making A Career Plan

Housing Affordability's Impact on Young Americans

Building a Financial Base

A Career Mindset In 2024

Investant | Our Story

Short stories on
wealth, behavior, and life.