Can Millennials Become Financially Independent?

Kaderli_5_tools_for_retirement_planning1Millennials, those born roughly between 1980 and the year 2000, face a different future than Baby Boomers did at their same age. In terms of wealth building and saving for retirement their challenges are wage stagnation, unemployment, underemployment and a seeming sense of entitlement. Because they came of age during the Great Recession, their faith in brokerage firms, Wall Street and global banks has been bruised – for some – beyond repair.

Being optimists, we believe that the financial future of this generation can still be bright, but with loads of student debt and lack of investment understanding they need to get started learning about money management now.

Time is on your side and is your greatest asset

One thing Millennials have today that Boomers don’t is great stretches of time before retirement. It is their greatest resource and this fact needs to be made clear to them. Time cannot be replaced, and if you are a Millennial, then knowing about the power of compound interest will change your financial life. $10,000 – the cost of a used car – invested today in the S&P 500 Index and based on market historical returns, could grow to $400,000 or more throughout your career, thus building a solid foundation for your retirement needs. $20,000 can become over 800K and $30K can grow to 1.2 million. Our advice: Start investing today no matter what the amount.

Just get started

A new investor with limited funds can utilize an online, no-frills brokerage account and depending on which brokerage you pick, you can open an account with less than $1,000. Not every house requires initial investments of more than $2,500, and some brokers will let you open up retirement accounts with no minimum at all.

Just get started and dollar cost average into your account making monthly deposits into your investments no matter rain or shine. Persistence will pay off here and pay yourself first, before any other bills.

Sign up for your 401k as soon as you can

Another place to set aside money is with an Employer-matched 401k. Take advantage of this because if your company matches or contributes to your account it is like receiving free money, and it’s unwise to leave it on the table. If you can save a minimum of 10 percent of your pre-tax paycheck and begin this right away, you will never notice the difference in your take home pay. Remember, pay yourself first!

Make it easy on yourself and automate these savings through payroll deductions. This way you won’t have to remember to take the money out, be tempted to forgo a payment to yourself and spending it elsewhere.

Pay down your debt

Nothing can derail your financial future more than maintaining debt. Pay it down or eliminate it. If you have high-interest credit card debt, reduce this first, then consolidate your student loans and prioritize your debt payments. Get yourself on a savings plan alongside paying down your bills. Remember? Who are you going to pay first?

Track your spending

In order to pay down your debt and save for your future, you must know where your money is going. Tracking your spending is a powerful tool to put YOU in control of your finances. Write down everything you spend and put it into a category. Keep a running daily, monthly and yearly average. Manage these figures rigorously. Even small changes like deciding not to purchase lattes or going out to lunch on a daily basis or forgoing the latest tech toy can save you hundreds – even thousands – of dollars per year. You might not know this fact if it weren’t for you tracking your expenditures. Do you know how much your average spending per day is?

At your fingertips 

Information is everywhere online these days for your self-education. Calculators, worksheets, sample budgets and even online courses are all there for you. Learn the language of financial terms and arm yourself with knowledge so you will not be taken advantage of by financial professionals. Only you have your best interest in mind when it comes to your financial future.

Build your future

What is better than the securities market for investing? The stock market has averaged 9.74% annually over the last 114 years.


When we retired in 1991 the S&P 500 Index closed at 312.49. Today it is much higher and in those twenty-four years the Index has averaged over 8% plus dividends, which is about the norm and this is including the 2008 crash plus a few others.

So while as a Millennial you might feel you have extenuating circumstances which justify why you’re not building for your financial future, move past this obstruction. We all have had obstacles to overcome in life. Instead, take advantage of these life-changing money tips. Your financial future is dependent on it.

One Response to “Can Millennials Become Financially Independent?”

  1. Since I only recently found you folks, I’m still catching up on some of your earlier articles. Again, this one in spot on! We are baby boomers who for various “reasons” did not have the good fortune to save for retirement in our early years. Always working to make “good luck”, we kept trying to put ourselves in front of the “luck” train (so to speak). Changes in careers and life finally “allowed” us to begin saving for the future at about 35 (early-1980s). So from that standpoint, we were almost “millennials”. And at that time, we both had salaries at only about $25K. We employed every recommendation you list here faithfully and with resolve for 20 years and then on into retirement. Meanwhile we changed jobs again, moved again, built our eventual retirement home, and tried to enjoy life while accepting that buying every little thing we would like was not going to get us to the goal. 10 years into that 20 we resolved to put every pay raise into savings. We could live without more “toys” — but we still didn’t feel we were depriving ourselves of an enjoyable life.

    We retired 12 years ago at 55 and still follow the path we laid out more than 30 years ago. Every dollar is tracked, every expense is measured against its impact on our future. I developed my own spreadsheet in addition to using available online tools. That might sound arduous, but it really takes only a little time and we view the results as “payment” for a successful retirement. Since we know how we fit in our long term plan, we have almost no stress over whether our money will last.

    As with you, “the end of the world as we know it” or total world-wide economic collapse could change everything. Then we would all have to test our “flexibility”.