Monthly Archives: May 2014
Walking across the stage to get your college diploma might be the proudest moment of your life, but it’s also just the beginning of your adult life. Tripping up financially might not be as initially embarrassing as stumbling on stage, but it can be more devastating long-term. Having a plan for how you’re going to manage your finances can turn your money into an ally.
Preparing for Financial Success
Before you can be successful in building wealth, your first order of business after graduation should be to create a budget, according to Tim Massie, a certified financial planner based in Vancouver and Spokane, Washington. “I’ve found there is an unmistakable direct relationship between how well people are doing financially and how diligent they are with maintaining a regular budget system and process,” says Massie. Your money will go somewhere, and if you don’t have a plan for it, you can find yourself wondering where it all went.
Tip 1: Don’t Spend Money You Don’t Have
After graduation, replacing your tuition costs with a paying job can make you feel like the sultan of Brunei because you’re taking out a five-figure expense and replacing it with a new salary. However, Massie cautions not to spend money that you’re “going” to be making, as he’s seen it trip up countless grads. He says, “A new business wardrobe may feel necessary, but buy it and other items over time with actual earned income.” Taking on consumer debt can hamstring your financial freedom later on.
Tip 2: Build an Emergency Fund
Regardless of how secure you feel at your first job, it’s wise to start building up a rainy day fund as soon as you can in case hard times come, whether that’s a job loss, illness or other unexpected financial emergency. Different financial planners offer different suggestions on how many months of expenses you should stash, ranging from three months to a full year. It might seem like a daunting goal, but once you’ve accomplished it you’ll sleep better at night. When you’re stashing away the money, make sure it’s somewhere safe, such as a savings account or money market deposit account at bank protected by the Federal Deposit Insurance Corp. That way, even if the bank goes under, you’ll still get your money back.
Tip 3: Save for Retirement
Retirement? You want to talk about retirement? You bet. When you start your first job, the end of the workday might seem an eternity away, much less your retirement years. However, starting your retirement savings early can mean big benefits over time. “If you start out deferring income right away, you will be used to the paycheck you receive,” Massie says. “The power of compounding will reward even the smaller amount you can defer while you are young.” Compounding refers to how the returns you earn on your investments earn additional returns the the following year. For example, if you invest $1,000 this year and it grows by 10 percent, you have $1,100 invested the following year.
Using either an individual retirement account or an employer’s plan, like a 401(k) or 403(b), allows your money to compound tax-free in the account. Plus, if you use a Roth IRA account, the earnings will come out tax-free at retirement. Massie says, “Ask any older person at your first job what they think. I’ll bet they insist you start today and not make the mistake they did by waiting!”
Hatching a successful career is a challenge for many new professionals.
While it may take a little hard work to hatch your career in the financial services industry, that effort will be met with great rewards throughout your career.
Here’s a quick list of some steps you can take to position yourself for success as you hatch your very own financial services career. While this list isn’t exhaustive, it does offer a well-defined and tangible blueprint for success, with special consideration for the fast-changing landscape of the finance sector.
Step 1: Network, network, network!
This is a vital step for young professionals across all industries, but is particularly important for those pursuing a rewarding and successful career in the world of finance.
Networking is a central pillar to the work that you do as a Financial Professional, precisely because business relationships don’t follow business – they precede it. In other words, you need strong business relationships to make good business, not the other way around.
For successful finance professionals, a strong growing network is a needed currency. Whether you’re a Personal Consultant, a budding Financial Analyst at a consulting firm, or a Financial Planner with your own practice, you should focus on growing your contact list.
Some tips for building your network:
Be thoughtful, choose wisely
Investing in a select group of people is more valuable to you both personally and professionally than investing in too many people and wearing your social capital thin. Ask yourself, does this relationship bring value to all parties?
Giving is investing
Giving immediately in any relationship conveys to your peers a willingness to sacrifice your time and resources. It also encourages others to sacrifice their time and resources when you need it most.
Reconnecting
If business relationships are the lifeblood to good business, interaction is the pulse. The better and more regular the interaction, the healthier the relationship, and therefore the business.
Step 2: Find yourself a mentor
Finding a mentor in the world of finance is the difference between walking to work, and driving there. And just like buying a car, securing a mentor is no easy feat: it requires investing your time, energy and resources but will certainly lead to a successful financial career – and faster.
In finding a mentor, young business professionals should begin by identifying their own career aspirations. Finding a mentor can happen a moment’s notice as you increasingly interact with the business professionals around you: being sure of where you want to be will make it much easier to determine who to invest in.
It is imperative that you benefit your mentor, and remind them of it regularly so that he/she will do the same and feel positively toward getting you to where you want to be. This reciprocity also requires some selflessness. It means being accountable, and sharing your progress, your hard work, as well as the credit where it is due.
Finally, finding a mentor is a long-term commitment. It means not only that you are willing to make it last, but also that you are invest in it, continuously, regularly, and without reservation. Chances are, your mentor also has a mentor and successful career growth is mutual.
Step 3: Strengthen your soft skills
Hard skills are a necessity. Businesses can’t operate without the many technical skills you’ve learned and continue to develop. However, firms, businesses and organizations are increasingly interested in the soft-skills: communication, interpersonal skills, and beyond.
An exemplary command of the soft skills needed for good business gets you noticed off-paper, and will allow you to stand above the competition during an interview or at a networking event.
Organizations within the financial services industry take great care in their searches for new candidates, and are looking for someone who will enhance their image as well as their bottom line.
These skills have lasting implications for success in the industry – and are not only well-suited to launching your career, but also for those aspiring to become leaders in their field.