Education | Sep 08, 2021
Why Early-Career Professionals Will Thrive After the Pandemic
Jeremy L. SuschakCFP®
CFP®
The pandemic’s devastating impact has inspired America’s largest and most diverse generation. For those of us identified as being Gen Y, aka “Millennial”, or Gen X, these past 18 months have likely been the most consequential in our adult lives. We’ve considered and reconsidered nearly everything, from where and how we work, to where and how we live.
From a financial perspective, COVID’s shut down of our economy was the first time that we personally had to navigate a stock market crash. The last time the market had such a decline, in 2008, it was largely our parents’ issue. At least I had no savings of consequence.
This crash did impact our personal finances. We saw our investments shrink, our 401(k) statements decline, and our high trajectory careers threatened. But after the 2020 shutdown, we learned a few valuable lessons: the importance of goal setting, managing personal priorities, and staying invested, in all elements of our lives.
Today I am seeing an increased and reinvigorated focus by our DBR Next clients on the long-term-towards retirement, risk management, and solidifying their wealth building foundations for the coming decades. There is a renewed emphasis on savings and accumulating earnings, versus the spend-now mindset. Few things amplify the importance of an emergency fund more than an unforeseen event like COVID-19.
The pandemic’s other social and financial impacts highlight the value of having a detailed financial planning ex ante. As we witnessed, the world and our lives can change on a moment’s notice. Having a thorough plan in place for unexpected challenges can add (or save) meaningfully for one’s financial position.
Many in this cohort have taken the requisite steps. Those that started discussing debt management and early investment strategies now have 529 education savings plans for their children, 401(k)s for their retirements, short term savings accounts for emergency spending, tax-advantaged accounts for additional investments, and estate plans and insurance for their families.
Financial success, though, may require greater education and emphasis on investment allocation. According to a recent survey by Clutch, 88% of Next Genners are currently investing money, citing a motivation to plan for the future, and 45% of millennials stated that retirement was the top reason they were investing and saving. In contrast, nearly half of those over the age of 55 have zero retirement savings¹.
Only 55% of next generation investors, however, feel confident in their own money management skills. While we must be commended for our preparation, greater sophistication is likely necessary as we enter our prime earning years and as our lives become more complex¹.
We have built robust foundations for financial, personal, and professional growth - rising in the ranks at work, starting businesses, and at our growing homes. Filled with a burning desire to pursue the best for ourselves and our families, our focus on the future is inspiring. With thoughtful planning, strong financial habits and time on our side, we are ready to assume our place in leading the next great expansion.
Thanks for reading,
Jeremy
This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. The impact of the outbreak of COVID-19 on the economy is highly uncertain. Valuations and economic data may change more rapidly and significantly than under standard market conditions. COVID-19 has and will continue based on economic forecasts to have a material impact on the US and global economy for an unknown period.
Jeremy L. Suschak
CFP®