In the words of renowned author, Oscar Wilde: “The only thing to do with good advice is to pass it on. It is never of any use to oneself.” After having read a number of articles on personal finance, I decided to pass on four major pieces of advice that are useful to anyone in their twenties or thirties. Here they are:
Don’t Depend On your Degree
Parents often tell their children that they have to earn a college degree to be successful, and in many cases, they’re absolutely right. According to the Bureau of Labor Statistics, the current unemployment rate among college graduates is 4.2%, compared to 8.3% for those with only a high school diploma. However, that doesn’t mean a college degree assures you a job once you graduate. The Washington Post reports that the unemployment rate among Architects is 13.9%, and 11% for people with arts degrees. My recommendation is to study a major that you enjoy, but be sure to research the job outlook for your field before committing to the degree program.
Be Weary of Credit
Credit cards might have their use, but when jobs become scarce and the economy slows down holding a lot of credit card debt is dangerous. When you take on debt, you’re betting on your future ability to pay it and as many defaultors have found out, no one knows what the future holds. The average household debt for credit cards is more than $15,000, and 3% of those households are at least 30 days delinquent. My recommendation is, don’t think of your current job as safe. Many have been laid-off, leaving them with no way to pay off their debts. Keep credit card debt at low levels to safegaurd your future. Remember a borrower is a slave to the lender -King Solomon
A Home Is Not an Investment
If you’re an investor purchasing homes at almost ridiculously low prices, hoping to rent and later sell the properties, a home is an investment. For the average buyer, this is not the case. Homeowners generally stay in their homes from five to seven years, which isn’t a sufficient time for their homes to appreciate in value. Next, the collapse of the housing market has left nearly one out of every four homeowners owing more on their home than it is worth. My recommendation: If you purchase a home, don’t do it because it’s a good investment. Do it for other reasons, like a low interest rate and a great price. Don’t count on making money from your home when you move.
Invest Early and Often
There is no risk-free investment, but the best way to protect against losses such as these, is to save and invest larger amounts earlier in life. As the balance grows and your portfolio is more diversified, you’ll have greater flexibility to handle the ups and downs of the markets. My recommendation: think about your retirement plans on the first day of your career and continue investing more than you think you should.