In early June, I returned home for my 5-year college reunion. While I was stoked to see everyone and talk to fellow classmates about ReisUP, I'll admit I was also a bit nervous. According to the self-aggrandizing site that is Facebook, many of my peers had been up to incredible things since graduation, and I wondered how my story would measure up.
As anticipated, there were some awkward "Heyyy...you...!"s and varying levels of chest-puffing out of the gate. But once enough liquor had been poured to drown the awkwardness, some fantastically genuine discussions ensued.
Many of my classmates are just starting their careers, having attended medical, law, or some other professional school immediately after undergrad. Others had entered the workforce right away and are now returning to school, MBA program or otherwise, to broaden their skill set or take a break from the "real" world. And the rest had been and planned to continue working, though a number of them are, admittedly, not satisfied with their current path.
Conversation after conversation, I began to realize that many of those "incredible" things that others are up to are merely stepping stones, and very few know for certain where those stepping stones lead. Multiple people described feeling as if they're in limbo, like they're standing on a stone in the middle of a river with two or more ways to cross. They yearn to make a difference in the world, but aren’t sure which path to take. Do they keep working at a job they're unfulfilled by just to pay off their student loans? Should they go back to school for another degree? (What's $100k more of debt, right?) Or should they take time off to try to figure it all out, but risk financial instability? No one knows.
So when it came time for me to talk about ReisUP, I was met with one of two reactions: awe or an air of skepticism. Common responses ranged from "That's amazing! I need serious help with my 401(k)!" to "How did you settle on that? How are you so certain that's what you should spend your life doing? Weren't you a pre-med Spanish major here?"
Yes, yes I was. However, once I began my professional career, my interests changed. I developed a passion for a world that I had felt very excluded from my entire life: finance. I quickly discovered that the concepts aren't actually that complicated, I had just never been exposed to them. I also learned that my friends and family want to feel more in control of their investments, so I've made it my mission to create the resources they need. Once I accepted how neglected the average American feels when it comes to investing, I had no other choice but to start ReisUP. I can't stand idly by and let the wealth gap grow even wider. Not if there's something I can do about it.
Most millennials are struggling to identify their purpose, though.
I'm speaking from experience here. Growing up, millennials were told to get good grades, go to college, then get a good paying job with a 401(k). They were told that they could do anything, be anything, and study anything they wanted. Unfortunately, that’s translated into a lot of non-marketable degrees, mountains of student debt, and no real idea of what they actually want to do with their lives. Not to mention that the pressure to get a job immediately to pay off their loans has prevented them from taking time to figure it out. One of the reasons I've been able to get so clear on my purpose is that I've had time to think about it. Most millennials don't have that luxury, though, and the impact is evident:
The lack of clarity in their personal and professional lives is trickling into their financial lives as well.
Studies show that nearly 80% of millennials have yet to invest a single dollar; the conversations I had with my classmates absolutely support that statistic. Many of them feel overwhelmingly burdened by student loans and are simply doing their best to stay afloat. They don't have a clear plan to pay off that debt, so how could they possibly focus on developing an investment strategy? They don't know where they'll be in five years, let alone forty. How can they be expected to invest for a future that's not only distant, but hazy at best? Coupled with the fact that, while they're the most-educated generation, they've never received any formal investment training, it's easy to see why they're sitting on the market sidelines.
When I started out as an investment analyst, I quickly realized what it takes to be successful in the investing arena: strong research and analytical skills, of course, but also clarity and conviction. You've got to know what your goals are and have an executable strategy to get there. Otherwise you'll find yourself floundering around, grasping at straws, chasing yield that doesn't exist.
As it is in life, clarity is key for investing success.
So what do we do? How can we combat this? How do we bring clarity to what, right now, is a very unclear world? To quote Marie Forleo, one of my favorite business and life coaches, "Clarity comes from engagement, not thought." We've got to get people engaged in the investing process! Millennials need to feel like they not only have skin in the game, but that they're capable of sitting in the driver's seat. They need to stop thinking about how they should be investing and actually start doing it. Set a goal, make a plan, and execute.
If you're ready to ReisUP and find clarity, here are three steps to get you started:
Engagement Action Step #1: Dream
I love this step, and I highly recommend starting here. Grab a drink, go for a run, hit the beach (whatever helps you relax), and let yourself truly dream about your future. Be honest with yourself. What does your ideal life look like in 10 years? 20 years? 40 years? Write it down, draw it out, and place that list or picture somewhere visible.
Engagement Action Step #2: crunch
Now that you've got a more tangible picture of the lifestyle you’re working toward, it's time to figure out how much you need to afford it.
Once you have a rough idea of how much money you'll need, use a reverse retirement calculator to break that number down into monthly contributions. This tool is quite simple to use (and fun!).
The beauty of this step is that it's adaptable. Your goals change? No problem! Crunch the numbers again to re-estimate the size of your nest egg, then use the calculator to adjust the amount of your contributions.
Engagement Action Step #3: Learn
This is arguably the most important step in the engagement process. The actual act of investing is what will turn your dreams into reality, so you must understand how investing works. That means learning what equity and debt are, why stock prices go up and down, how compound interest works, what all of the different fund options are in your retirement account, and why and when they should be used.
Wall Street doesn't have a monopoly on this information.
It is now readily available to you. Check out my courses MONEY and WEALTH for the investing and retirement training we all should have gotten in school. Whether you've got a 401(k), 403(b), 457, TSP, or IRA, the info you need to take control of your account is there.
Remember, "Clarity comes from engagement, not thought." To find clarity, you must engage, and to engage you must dream and learn. While you may not know the "right" path to take, you can at least rest assured knowing that, financially, you're slowly but surely on your way.