Jason Hartman Foundation

Somewhere during senor year the fear begins to set in. The safety net of college will be gone soon and you’ll have to finally put on the big boy pants, which includes deciding what the heck to do with your life. The first thing to keep in mind is that it’s okay if you’re not sure of your life’s true calling yet. It happens to the best of us. There are plenty of 30, 40, and 50 year old people who finally figure out what they were meant to do on this planet.

The good news is that almost no decision is irreversible (notice we said “almost”). Join the military and you might have a hard time backtracking for about five years. Here are two factors to take into account when preparing to make the leap into Adultland.

1.Research career fields not only in your degree field but in other areas that interest you. The crossover might be more than you realize.

2.Make a list of your strengths and weaknesses. If you hate talking to people, a career in hardcore sales might not be the ideal choice.

If you still find yourself at a strategic loss for direction, try this. What were you doing when you were the happiest in your life? Hopefully not sleeping with your binky or gorging on Fruit Loops but, if so, there might be a way to work with that. If you figure out what it is, please let us know. Another approach is to figure out the lifestyle that works best for you. Consider things like:

Do you like to travel?

Work environment – home office, traditional office, outdoors?

How much do you want to earn?

How many hours daily do you want to work?

See where we’re headed? Answer these lifestyle questions and the picture begins to clear considerably.

Good luck out there!

The Young Wealth Team

Flickr / Manuel Van De Meijer

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The concept of wealth management for young investors presupposes that they, indeed, have some moderate amount of wealth to manage. It doesn’t have to be that way. You don’t have to be dumping Trumpian numbers into your account to start developing good management skills because – now we’re going to tell you a secret – the more you manage your own money, the more of it you’ll have.

In other words, take an active role in your own investing and don’t leave all the heavy lifting to a broker. You know what? They’re going to charge you for the privilege and that comes out of your profit.

What’s the best way to get started managing your own investing? Here are a few tips.

1.Figure out how much you have to play with. First, you’ve gotta pay living expenses, bad debt, and create an emergency fund. After that, divvy up what’s left between long and short term investing goals. Don’t worry if it’s not much in the beginning.

2.Assess risk tolerance. It’s a fact of life that no two people have the same level of risk-taking built into their personality. Figure out what yours is. Skydiver or plodder? One’s not better than the other but you need to know beforehand because it will make a difference in how you spread your assets.

3.Shape your portfolio. Here’s where you get down to the nitty gritty of wealth management. How much will you put into stocks, bonds, mutual funds, or real estate? Based on your self exploration in the first two points, it’s time to create and execute your actual investing plan.

While the preceding isn’t everything you need to know about managing your wealth, it should get you moving in the right direction. Good luck!

The Young Wealth Team

Flickr / AMagill

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Today is money education day at Young Wealth! A while back the federal government decided that credit card companies had been running roughshod over their customers, and decided to do something about it. The end result was a brand new set of rules designed to protect consumers, which went into effect February 22, 2010. Since most people won’t take the time to read these changes, we’ll hit the highlights.

Your credit card company must…

…give you 45 days advance notice before they raise your interest rate or any other fee. At the same time, they must offer you the chance to cancel the card before the change occurs. If you choose to cancel the card, they can cancel your account and raise your monthly payment (subject to limitations). In addition, your friendly neighborhood credit card slinger must post the following plainly on your monthly bill:

1.How long it will take to pay off the balance making minimum payments

2.How much you must pay monthly to pay the balance off in three years

Rates, fees, and limits…

After signing up for a new credit card, your company cannot increase the interest rate for 12 months unless it is tied to a variable index, is an extremely low introductory rate (which must remain in place six months), or you are later than 60 days paying your bill. Consumers under the age of 21 must show they have the financial resources to make payments on a credit card or must have a co-signer before they can open an account.

There’s more to the new regulations but that’s probably enough for now. Don’t want your brain to overheat.

The Young Wealth Team

Flickr / TheTruthAboutCreditCards

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The resume’ writing industry has been around for a long time and seems to thrive in good times and bad. Maybe it’s because resumes’ require introspection and that’s not always easy. It forces you to take a step back and analyze not only the work you’ve done but how to present it in the most appealing way possible to a prospective employer. It’s not our intention to stomp the entire industry into the ground but here are two things to think about before pulling out that credit card.

1. Expense: Basic resume’ writing service start at around $75 and can run up over $1,000 or more if you opt for all the bells and whistles. Is this a necessary expense? Surely there are better uses to which you can put that money. You are going to be an educated, accomplished professional of some sort, right? Shouldn’t you be the one to write your resume’?

2. Who knows you best: Relating to point number one, how can a complete stranger possibly do a better job presenting your story to an employer than you would yourself? It doesn’t make sense to us. You know yourself better than anyone. You’re smart and capable. Crack your knuckles, sit down at the keyboard, and get busy.

We’re not saying it’s a felony if you decide to go with a resume’ writing service, but give it some thought about whether the end result will be better than what you could do with a few hours of good, hard focus. Just our two cents worth.

The Young Wealth Team

Flickr / SOCIALisBETTER

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Winning the investment game is not for the faint of heart but it is critical to realize early on the necessity of embracing the idea that you MUST invest in some way in order to build wealth. Choose the stock market (probably your worst option), start a small business, or invest in real estate (your best choice to succeed). When it comes to investing, the water is murky and current strong, and we don’t want you to get eaten by the first shark that swims your way.

To succeed, you’ve got to stay alive, financially speaking of course. Before you sink your first dollar into an investment, consider the following three factors that have derailed many a young investor career. Watch out for these sharks and maybe you’ll stay alive long enough to actually make some money.

1.Transaction costs – it’s easy to overlook these when perusing a mutual fund prospectus or calling your broker and telling him to “Sell, sell, sell!” or “Buy, buy, buy!” Pay attention to the transaction costs. If it’s too much, go somewhere else. If all your profit is being eaten up by the broker’s cut, find another broker.

2.Your broker is a crook – sad but true. The stories are out there…Enron…Bernie Madoff. Stay alert for crooks in the financial business because they will always be there. Don’t be the next poor sap to see his nest egg disappear in a poof of chicanery.

3.Your broker is incompetent – crooked dealing isn’t the only way to lose money. Your broker could be straight as an arrow but simply not cut out for the job. Maybe he’s in the wrong field. Maybe he doesn’t have the IQ for the gig. The lesson is don’t trust your future to an obvious incompetent.

While we can’t give you an entire financial education in one blog, keep your eyes open for these three pitfalls and your chances for success just increased astronomically.

The Young Wealth Team

Flickr / rednuht

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There’s a reason people look to franchises when thoughts of entrepreneurship enter their head. Owning a franchise removes much of the guesswork from starting a business. The company provides you with a blueprint to success. They’ve already done the hard work of testing and tweaking to see what works. The problem is that buying into most franchises can require big time money.

Take McDonald’s for instance. This ubiquitous burger chain won’t even talk to you unless you have $250,000 cash on hand. As in cash – borrowed collateral doesn’t count. So do you have to already have money to build wealth?

Not quite.

There are plenty of tried and true franchises, many of them geared toward providing services, that allow you to buy in with $9,000 or less. Here are a few:

1.Bonus Building Care – this commercial cleaning company has been franchising since 1996 and now has over 2,400 franchises. For as little as $9,000 you can work out of your home and even have the option to purchase an exclusive territory.

2.Breath Testers USA – this brilliant little idea franchises machines for you to place in bars, restaurants, anywhere people might have a drink. For a small fee, they can blow in it and find out their blood alcohol content before driving. Great idea? We think so. This buy-in opportunity also costs about $9,000.

3.Global M.A.R.S – this is a great franchise if you’re interested in making cars look good and really don’t have much money to spend. Offer customers a quick, economical way to remove scratches, dings, burns, or any other discoloration on paint, plastic, leather, vinyl, velour, metal, carpet, or glass on their car while they wait. Buy in for $500, a price that includes comprehensive support and full training.

There are literally dozens of other low cost franchise opportunities. We suggest you use your good friend Google to find them.

The Young Wealth Team

Flickr / azrainman

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Like it or not, more and more businesses are adopting the practice of electronic check conversion. You’ve probably already seen it. You write a check and hand it to the cashier, who runs it through a machine, then hands the voided check and receipt back to you. What just happened? Did you get hit by a train?

No worries. You just experienced electronic check conversion (ECC) and now it’s time to get your financial literacy up to speed and understand it.

Stores love the process for a few reasons. First of all, they get their money faster than with a paper check transaction. Information from the check is immediately collected (account number, routing number, financial institution, check number) and used to debit funds from your account. Normally this happens more quickly than with the traditional paper check process, so be sure you have the money in the account! The second reason stores love electronic checks is they don’t have to keep track of the paper check – they give it back to you right away. It doesn’t take up space in their cash register and they don’t have to worry about losing it before it is deposited in their bank.

Any business that uses the ECC process must post notice prominently at the checkout counter. If you don’t agree to it, they’ll probably make you use another form of payment like credit/debit card or cash. Keep an eye on your account summary each month. If you find an ECC error, law requires your financial institution to investigate.

At Young Wealth, we don’t believe ECC is inherently good or bad, but it is part of the digital migration that will likely see the end of paper checks entirely before too many more years pass. The key is to be aware of how your payments are processed so you can monitor your account for errors.

The Young Wealth Team

Flickr / .ack-online.de

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Remember how everyone from Dad to Great Aunt Edna told you to save for a rainy day? As much as you want to pretend that’s just old fogey logic and has no place in your hipster lifestyle, stop and think about it again. That swinging carefree attitude might have worked in college but not so much when you become an adult with a job and responsibilities.

How will you get to work when your car craps out and you don’t have money for repairs? Or when the dog eats an entire chocolate Easter Bunny and needs to have his stomach pumped – quickly? When an errant pass in a spirited game of touch football in the front yard goes through the neighbor’s window? Or worse, unplanned medical expenses.

The point is that any of these and a variety of other minor/major emergencies can happen at any time. You need an emergency fund. Period. Start by saving a thousand dollars. While not a big cushion, it can handle car repairs, medical visits, and assorted life events up to a point. The ultimate goal is to have six months worth of income readily available for whatever life throws at you. If you’ve never tried it, you don’t realize how much daily stress is lifted from your shoulders when you’re not flying without a net.

Imagine you suddenly lost your job, through no fault of your own. Maybe it was downsized out of existence. No worries. You’ve got six months to find one, while your buddy Fred, who was also released and was of the opinion that your emergency fund idea was crazy, is left in shock to pick up the pieces. And he better do it quickly if he wants to keep eating.

Just our two cents worth from Young Wealth.

The Young Wealth Team

Flickr / A. Strakey

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There’s more than one way to reach the land of financial independence. Investing is a popular method and can work well, especially if you focus on buying rental properties. But others exit school with an entrepreneurial bent, ready to start their own business.

At Young Wealth, we say “Go get ‘em!” Entrepreneurs are the lifeblood of capitalism. But starting a business isn’t something you should do off-the-cuff or on whim. The most creative, high-flying imagineers will do better with a of basic grounding in reality and elbow grease applied to creating a solid business plan.

Why do you need a business plan and what is it for anyway?

In our point of view, a business plan accomplishes three critical tasks.

1.Communication – a well-developed business plan must communicate the potential for success of the idea to people with investment capital, bank loan officers, possible business partners, and prospective employees.

2.Management – consider your business plan to be a roadmap, with every possible contingency planned for. This living document will allow you to track, monitor, and evaluate your progress along the route. Include milestones, even if they have to be adapted along the way.

3.Planning – one of the business plan’s most valuable attributes is in planning. Map out in advance roadblocks and obstacles you foresee arising. Maybe they will come to pass, maybe they won’t. Certainly you can’t predict the future but beginning with a blueprint will put you that much farther along the path to profitable success.

Does a small business need a business plan too? Absolutely! Plan it out. Write it down. Make a million dollars or two.

The Young Wealth Team

Flickr / Ivan Walsh

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It’s hard to build wealth when your credit is screwed up beyond belief. If you find yourself tormented by debtors, welcome to the club. It’s become a way of life for many young adults. How does it happen? Buy a car, take a vacation, put a killer stereo in your car – put it on plastic. These are a few ways to find yourself dodging dinnertime phone calls from angry collection agents. You might be able to put up with it for a while but they’ll wear you down eventually because they…will…never…stop.

Until you finally cry “Uncle!” and begin looking at your credit repair options.

If there’s one thing you can count on in America, it’s that scammers find desperate people like Tiger Woods finds women who aren’t his wife. Don’t let your overwhelming desire to make your credit problems disappear in a POOF of smoke affect your good judgment. The following are warning signs that you’re about to be snookered:

1.The credit repair company wants you to pay money before they do anything. This is against the Credit Repair Organizations Act.

2.The company “forgets” to tell you your rights and what you can do yourself for free.

3.The company recommends you not contact the Big Three national credit reporting companies directly.

4.The company tells you they can get rid of most (or all) negative credit information, even if it’s accurate and current.

5.The company suggests you create a new identity by using an Employee Identification Number rather than your Social Security Number.

At Young Wealth, we’d much rather see you visit the Federal Trade Commission website here to learn legitimate ways to repair your credit.

The Young Wealth Team

Flickr / TheTruthAbout…

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