Millennials vs. Baby Boomers: Financial Advice Across Generations

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Millennials are impulsive and want instant gratification instead of long-term financial gains.

Baby Boomers are behind the times and don’t realize how the financial landscape has changed.

 

Sometimes it seems like the generational conflict over finances never ends; lectures start with Grandpa at the family dinner table and end with his twenty-something grandson’s angry rebuttals over dessert. Neither party is flexible in their assertion that their financial philosophy is the correct one, and someone else inevitably has to change the subject when a heated intergenerational conversation turns to awkward silence.

The main issue with these conversations is that both parties are advancing incomplete positions. In all likelihood, the grandson’s approach to finances works – for his situation. The same is likely true for the grandfather. The intergenerational argument is an unwinnable one because financial strategies are dependent on a person’s stage of life and their individual financial situation.

Moreover, the current economic landscape must be taken into account when devising tactics for all generations, as strategies that may have served even twenty years prior might now fall flat. The buying power of the dollar has tanked in the last few decades; Business Insider reports that inflation has boosted prices by 784% over the past sixty years. Understandably, this makes it more difficult for younger consumers to buy homes, cars, or even get married. Financial priorities change according to the economic landscape – and usually, that means shifts occur on a generational basis.

The following outlines a few financial approaches for each generational category.

 

Generations Y & Z (Millennials)

Teens to late twenties

Millennials are only just beginning to learn how to manage their finances; they may be working their first jobs or finishing school. More often than not, they have a significant number of loans; in fact, the average debt burden for students graduating in 2016 was $37,172!  As such, Millennials may need to put more of the money they do earn towards paying off debt and day-to-day expenses.

However, members of this generational bracket should also focus on making and sticking to a reasonable budget. They would benefit from setting up a savings account and depositing a set amount of money into it each month. Building credit history is vital during the teens and twenties, so Millennials would further benefit from making monthly payments and establishing a good credit score.

 

Generation X

Thirties to forties

Members of Generation X typically have jobs, and often young families as well. Their priorities differ from Millennials because, as a contributor to TheWealthAdvisor notes: “Boomers and Gen X are further advanced in their careers and lives, they tend to have fewer concerns about day-to-day living.”

However, these individuals typically have greater investment obligations such as mortgages, college funds for their children, and their own retirement funds. As such, they should allocate their funds reasonably. Saving for a child’s college is wonderful – but not if it leaves the parent without a means to support themselves in retirement! Members of Generation X should be careful to observe their own financial needs by putting money away for retirement and medical and personal emergencies.

 

Baby Boomers

Fifties to sixties

Baby Boomers tend to save a little more than millennials, but often have more significant financial obligations, such as providing for elderly relatives or helping grown children. Additionally, this group needs to start planning for retirement in earnest by saving and settling on the kind of lifestyle they intend to pursue in their later years. Baby Boomers should also consider enlisting a financial advisor to help balance conflicting financial needs and plans. This strategic work shouldn’t be put off!

There’s no doubt that the generations have varying priorities and require different strategies as a result – so the next time that awkward generation argument picks up, put a stop to it!

Finance Philanthropists Who’ve Shared Their Fortune

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There are finance experts who aren’t afraid to spread the wealth.

Wealth management, investments, and studying the dynamics of assets are important parts of economics. The science of money management can be raised to build a business, whether one is educated in public finance, corporate finance, or personal finance. More than that, it’s individuals with this important skill set who have to ability to use their savviness for the purpose of humanitarianism, charity, and altruism. It’s fortunate that many who’ve established themselves as successful in the financial sector turn to philanthropy as a way to demonstrate curiosity and to give back.

Finance philanthropists use donor-advised funds or offer direct gifts to organizations in need. Others sign the Giving Pledge, promising that they will dedicate a great deal of their wealth, approximately half, to that philanthropy. As of March 2017, there are more than 100 self-made moguls and titans who’ve pledged to strengthen and support causes they deem necessary. Many among those who signed the pledge are financiers, who are incredibly generous. Read on to know the names of some of the most charitable financial philanthropists.

Carl Icahn

Carl Icahn is an investor and magnate who has a net worth of 15.7 billion, according to Forbes. Five years ago, he donated an estimated $200 million, with a significant amount of that money going to Mount Sinai School of Medicine. The various family foundations, hold a different number of assets, with the largest possessing about $30 million in assets. Most large gifts directly, including the $20 million to create the Carl C. Icahn Laboratory at Princeton’s Institute for Integrated Genomics. Also, $3 million to create the Icahn Medical Research Foundation.

Mike Bloomberg

Mike Bloomberg is a businessman, author, politician, and philanthropist with a net worth of $49.1 billion. As of May 2017, he was named the eighth richest person in the country, and the tenth in the world. The former mayor of New York signed the Giving Pledge, built up the excess of Bloomberg Philanthropies to $4.2 billion. He’s also given dollars to John Hopkins and his top causes (climate change and global public health). Also, his foundations give money to diverse issues.

Warren Buffett

Warren Buffett, with his $74.9 billion fortune, is a business magnate, investor, and philanthropist. He’s pledged to give away 99 percent of his wealth and has already cumulatively given away billions to his family fortune, the Bill and Melinda Gates Foundation, and the Nuclear Threat Initiative.

George Soros

George Soros is an Hungarian-American investor, business magnate, philanthropist, and author worth $25.2 billion. His umbrella organization, the Open Society Foundation, has gifted $11 billion over the last thirty years. He’s also given to the Central European University in Budapest, donating nearly $1 billion.

Julian Robertson

Julian Robertson is an investor, hedge fund manager, and philanthropist who has a net worth of $3.8 billion. Since he launched the Robertson Foundation in 1996, he’s donated more than $1 billion to charitable causes. Robertson put money toward The Tiger Foundation, Memorial Sloan-Kettering, Environmental Defense Fund, Teach for America, and some other organizations, amounting to hundreds of millions more. He’s also a Giving Pledge signatory.

Some other incredibly charitable individuals include David Rubenstein, Bill Ackman, Charles Munger, George Kaiser, John Arnold, Lowell Milken, Pete Peterson, Sandy Weill, Denny Sanford, Herbert Sandler, Michael Milken, and Stanley Druckenmiller.

An honorable mention is David Rockefeller who was an American banker, the chief executive of Chase Manhattan, and the oldest living member of the famous Rockefeller family until his death in March 2017. His net worth was $3.3 million at the time of his death, and throughout his life, he gave at least $1 billion to organizations and establishments, including the Museum of Modern Art and Rockefeller University.

 

Simple Tips for Beginning Investors

Simple Tips for Beginning Investors - Ajay NagpalYou’re never too young or too old to budget, save, or practice debt control, and the same can be said for investing dollars.

Being a financier isn’t as easy or as glamorous as the film “The Wolf of Wall Street” suggests, but that doesn’t mean that it’s terribly complicated. Of course, investment is intimidating to those new to the investment game, particularly to those who’ve never allocated funds and other resources to benefit from a ‘return’ –but there is help. Read on to learn some fundamentals about investment and capital gains.

Novice investors are frequently adopt investment diversification and strategy. A return may be in the form of investment income (dividends, interest, rental income) and/or capital gain. There are a range of financial assets, whether discussing low-risk investments, low-return investments, high risk investments, and higher expected commensurate rewards. The most evolved investment portfolios are those that are diversified in investment strategy. Below, please find five investment tips for beginner investors.

Know Someone With Knowledge: If you chat with an investment advisor who can educate you on your options. Through this advisor, you’ll learn if you’re able to invest in your registered retirement savings plan and tax-free savings account. Recognize the pros and cons of different account tips, and act decisively.

Shop Where You Buy: Rather than look to businesses and organizations that you don’t know much about, you may want to look to companies to endorse when seeking to invest. Find companies that you enjoy and patronize. If you enjoy eating Fuji Apple Salad with Chicken for lunch or you love snacking on a Lemon Drop Cookie, you may want to consider buying Panera Bread Co shares. Likewise, if you identify other brands and trends that others enjoy, you’ve figured out a great opportunity for investment. Of course, this differs a bit from serious investing. If you’ve set a lofty financial goal, you may want to consider long-term investments that focus on a well-researched industry.

Expand And Diversify: Inexperienced and budding investors without many assets may find exchange-traded funds and mutual funds are a good product for portfolio diversification. Mutual funds allow young people an opportunity to work with others, and an investment is facilitated by a mutual fund manager. Exchange-traded funds are similar, but function without the guidance of a manager.

Begin Investing Today: Know your limits by putting money away each month, so then you’ll have money to invest personally. Understand that the longer you invest, the more money you’ll make, gaining a compounding rate of return.

Do Your Research: Learn what opportunities your bank has available to you, and find out if you can open your account. Through your bank, you can learn if there is a discount broker program. While high return, these programs you’ll have to go it alone –there will be no one offer insight about when or how to trade or buy.

What’s also important is that you keep yourself informed. Read the newspaper each day, and learn about market vulnerabilities. Do research on the habits of successful investors, and perhaps seek out a mentor.