What Gen Z And Millennials Must Do Before They Invest Their Money - InvestingChannel

What Gen Z And Millennials Must Do Before They Invest Their Money

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What Gen Z And Millennials Must Do Before They Invest Their Money

Tesla, Apple, Nvidia, Amazon, Microsoft. 

Tesla, Apple, Nvidia, Amazon, Microsoft. 

Tesla, Apple, Nvidia, Amazon, Microsoft

In Wednesday’s Juice, we offered a nickel’s worth of free advice:

No matter how you do it, the best thing you can do with your budget is find $500 a month to save/invest every single month. It adds up like crazy …

In our next installment, we’ll start detailing ways to spread that $500 around. We’ll consider savings, particularly an emergency fund. Because it’s important. And we’ll consider actual investments.

That was in relation to Gen Z’s apparent housing and budget struggles. We’ll deal with investments in our next installment (focusing on what Tesla, Apple, Nvidia, Amazon, Microsoft means to us), but today, we cover the personal finance side. Because, if your personal finance isn’t in order, you have no business investing. Even in … you know it. 

We believe in Gen Z and the millennials. We don’t think they’re slackers. We just think sound money management with an eye on the long term isn’t on their radar … yet. Not uncommon. In fact, it’s typical of young people across generations. Young and maybe not-so-carefree, after all. 

Because the younger generations’ complaining about life might be a cry for help. They’re trying to do what Mom and Dad did, but it’s tough. Housing has never cost this much and you’re shamed for wanting to drink coffee in the morning and a cocktail at night. 

If you know somebody who is Gen Z or a millennial and think they could benefit from The Juice, please forward them this email. Politely ask them to sign up.  

Today applies to them. And, really, to all of us. 

When the personal finance gurus speak, they all say the same things. Before you start investing, you should have: 

  • No debt, particularly no high-interest debt, such as credit cards
  • An emergency fund with at least three months of expenses

While we’re not saying this isn’t good advice, we’re saying it sets up a struggle of epic proportion — one big enough to discourage even high achievers — without first dealing with the low-hanging fruit. If you look at some other areas first, paying off the debt and creating the emergency fund, then continuing to spend and starting to invest gets much easier. 

The less obvious areas:

  • Do you pay for a parking space? 
  • Do you pay for storage space? 
  • Is your apartment or house too big? Could you work at the kitchen table rather than the second bedroom home office nobody ever sleeps in?

If you answered yes to some or all of those questions, you probably have hundreds, if not thousands of money you can redirect to something more worthwhile. 

There are people who don’t blink an eye at paying $100 or more a month for parking. Or $150 or more a month for storage. Or hundreds, if not thousands for an extra room or other space they don’t really need in an apartment or home. 

Consider some data. 

In Los Angeles, the median price of apartments is as follows:

  • Studio: $1,650
  • 1-Bed: $2,350
  • 2-Bed: $3,395

In Dallas, the escalation goes from $1,719 to $1,891 to $2,757. 

We’re talking a $1,000 or so difference between a one and two bedroom. How many Gen Z and millennial couples have a two-bedroom so one half can have an office? 

A ton. 

First comes love, then comes marriage, wait until you pop out a kid for an extra bedroom. Because you can work just fine from bed, the couch or your kitchen table. The Juice staff does it every single day. And we love it. 

If you’ve got the money, more power to you. But lots of people just write these expenses off to the cost of doing the business of life. They’re not. 

They’re where the real monthly savings is. If you look at these three items, there’s a good chance you’ll pay off your debt faster and establish both emergency and rainy day funds. 

What’s not spending $5 a day on coffee going to do? Cover the minimum monthly payment on your credit card balance? 

Save $100, $150 and $500 on big ticket items and, suddenly, you’re opening up $750 per month in cash flow. 

So, you take $250 of that and either use it to amp up your debt paydown efforts or seed your emergency fund with it. 

Maybe, just maybe, if you’re pretty much in very good personal financial shape, you start throwing that $500 into the stock market. 

The Bottom Line: This is actually the easy part. Because it — the personal finance part of the equation — tends to be much more within your control. It just requires some decisions and compromises you might not want to make. 

The question is how badly do you want an extra $500 (or whatever) each month? 

The hard part is the investing part. Because when you look at Tesla, Apple, Nvidia, Amazon, Microsoft — as we do most days in Trackstar — it makes it sound so easy. Except it’s not. We’ll explain why in Monday’s Juice as we introduce ways to invest $500 and other fixed amounts of cash each month. 

As always, use the feedback link at the bottom of this email to share your thoughts, questions, concerns and ideas.

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