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Best friends Matt and Joel usually dive deep into a single area of personal finance on their podcast How To Money, sharing tips on cutting your bills every month, “house-hacking,” paying off debt, and saving for college – usually while they share a craft beer and debate “frugal versus cheap” decisions they’ve made. It makes for one of the best introductions to personal finance out there, accessible, fun, and full of great information. And on Fridays, they do a “Friday Flight” of financial headlines and their implications for our wallets. In this Friday Flight, they find an article about a couple of disturbing trends among millennials that they think will never pay off.
“The Great Resignation” trend has led to many people walking off the job, either in search of better wages and working conditions or, in many cases, because the shake-ups caused by the pandemic allowed them the space, time, or courage to finally start their own businesses. Matt and Joel love that – as part-time landlords and self-employed business owners themselves, they can appreciate that entrepreneurial drive. But a lot of people have decided to fund their new venture by cashing out their retirement accounts. This is not the way to go, the guys warn; it won’t only cost you in the short term with taxes and fees for early withdrawal, it will also cost you in the long term as you lose out on compounding interest. It’s better to save up specifically for your start-up, and leave those retirement accounts alone.
They also discovered a CNBC Millionaire survey that found that most millennials who have a net worth of over a million dollars have their cryptocurrency stash to thank for it – but a staggering amount of these millennial millionaires have more than half their wealth invested in various cryptocurrencies. “Don’t do that,” Joel says succinctly. You should never concentrate that much of your wealth into any one sector. Most of your investment portfolio should be dedicated to reliable stocks like index funds, not tied up in speculation. Get more great information about investing and growing your money on this episode of How To Money.
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