Winthrop Financial Offers Advice to New Graduates

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As new graduates enter their first career positions, Winthrop Financial offers advice on how to divvy up their paychecks.

With thousands of twenty-something students graduating this time of year, Winthrop Financial reaches out to offer advice as they enter the first positions of their career. For many, this will be the first time in their lives that they have had to consider retirement, investment planning, and overall financial safety and wellbeing. Deborah Stauring, CEO of Winthrop Financial advises, “While retirement at some point in your life is inevitable, and must be part of everyone’s plan, there are many other goals and things to have and accomplish along life’s path -- and each has a dollar value attached to it. And there’s life to live along the way too.”

1.    Consult an Inner GPS

Every person has a starting point, but everyone must also have a destination. It is important to discover what innate values and beliefs are important to the individual. Those become the goals and roadmap to investing. Decisions about lifestyle, purchases, and what role money will have in life will help to establish a destination. From there, a plan can be developed to get there.

2.    Pay Toward Goals First

Once a goal is established, it becomes fixed. Is it a new car? House? Education? Once a goal is determined, it must be paid for by putting money aside with each paycheck. Goals should be the number one expense.

3.    Spend by Category Not Checkbook Balance

No money left over at the end of the month, or perhaps you’re in a deficit situation? Make a plan to spend only a certain amount on each category of expense (goals, housing, clothing, auto, dining out) and stick to it. Accept that every once in awhile there may be a need to borrow from one category (not the fixed ones) to pay into another category. If credit cards are being used, only charge what can be paid out of the category it is spent on for a three month time period.

4.    Discover the Value of Time

Start today. That’s all there is to say about time. Maybe goals will have to be juggled, but as time advances, so does the ability to pay higher and higher amounts with advancing salary raises. Commit 1 percent or 2 percent of every year’s raise to investing and it’s amazing how quickly money compounds over time.

5.    Know Your Net Worth

So if time is so valuable, what is an individual’s net worth? A net worth statement is a scorecard. List assets and subtract liabilities. Most Americans have negative net worth, so don’t be alarmed. The important thing is to make sure that net worth is increasingly positive each year. This happens when goals are paid first. Years with a backward slide are caused by depleting an asset or adding debt.

6.    Don’t Save

The difference between investing and saving is in the risk that is taken on. It was fine for grandpa to put his money in savings accounts and CDs (his generation lived a shorter life, usually retired at 65 and had less years to pay for retirement, and inflation and taxes were not a problem) – but it won’t work for this generation. Individuals must invest in the market and take on risk or they simply will not reach their goals.

7.    Diversify

The fact is every asset goes up and down and by diversifying; it reduces the risk of a portfolio. Spread the risk over several different investments.

8.    You Don’t Know What You’re Doing – and Neither Does the Neighbor

People like to boast about the one or two stocks that are doing well. But how’s the rest of the portfolio doing? Don’t buy things that are not understandable, and don’t buy things just because a neighbor did.

9.    Buy and Hold is the Way to Go

Don’t try to time the market. This would require being right in two separate occasions and when was the last time that happened? And, too, if a substantial amount of time is spent watching the buying, selling, buying, selling, there won’t be time for the important things on your list.

10.    If The Herd Likes It

If all investors and TV programs all believe in the same action, there will be a wave that will try to entice others. The herd may be right for awhile, but not in the long term. People love investing in the latest hot stock or investment, but be skeptical. Do some homework and decide how much can be lost and how many paychecks it will take to pay yourself back if that happens.

“Your goals are your goals and no one else’s,” Deborah Stauring says.

About the company:
Winthrop Financials combines 93 years of experience as financial guides to bring the knowledge and proven service to help people feel comfortable with not only where they are, and where personal financial guidance can lead them. They focus on helping individuals with their life transitions, from young professionals accumulating assets, to affluent individuals and families, to those close to or in their retirement years. For more information about their financial planning services, please visit their website at http://www.winthropfinancialwny.com.

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Deborah Stauring

Jennifer Roberts
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