Young people born between 1982 and 2004 are probably the most populous generation and the one with the most influence on the economy. As much in the consumption of current products (food, travel, clothing, furniture … etc) than in the consumption of consulting services (finance, insurance, planning, legal services, etc.) They do nothing like their parents and manage to multiply their tasks through the screens of their computers and mobile devices.
But when it comes to finance, they probably make the same mistakes as their parents and grandparents at their age. Have them read the following:
Credit is easy, we know. But as the desire to go out, to travel or to get the last techno gadget or the last piece of a designer in demand is too strong … you head into the wall. By living only in the present moment, you are mortgaging your future. Credit is your worst financial enemy.
By starting a savings plan every two weeks or every month, you could thwart the volatility of the markets. For example, one who pays $ 500 a month will always have an advantage over the one who will pay $ 6,000 into his or her RRSP at the end of the year. Why? Because by automatically contributing each month, you sometimes benefit from temporary decreases in the price of investment shares and you accumulate gains faster. Time is the best ally of the investor.
By limiting your sources of financial information to the web, you neglect important lessons. Buy books, attend conferences, discuss with business people, advisers, professionals … The truth lies somewhere in the center of contradictions. Open your horizons.
Without plan and without budget, you will run to your loss. Anything that can be measured can improve. And I would add, what we neglect atrophies. If you have difficulty administering $ 30,000 a year and saving, it will not improve with $ 50,000 or even $ 100,000. You must keep a budget and establish a financial plan. Do not worry, it does not have to be very complex, but you have to do it in writing and follow it weekly. Lesson # 1 = Spend less than you earn.
You exaggerate your abilities and knowledge of the financial markets. Just because you made one or two good shots on the stock market does not mean that you are the next CEO of the Good Finance. All major professional managers follow rigorous processes and personally visit the companies they hold in the portfolio. Capital management is not limited to a screen. There is only one proven way to thwart the market: keep your investments for the long term.