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

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

### 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.