Video: Financial Advice for Young Professionals During COVID-19
Sachetta Callahan financial advisor, Eric Sachetta, shares three ideas for young professionals looking to make financial decisions during the pandemic. The good news, is that it’s not all doom and gloom. There are a few choices you can make right now, even while the market is fluctuating, that could help you out down the line.
Also, check out these videos Eric references for additional financial advice:
The 10 vs. 30 Principle
The Cares Act and Student Loans
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Full Trascript:
Hey everybody, Eric Sachetta, financial advisor here at
Sachetta Callahan and in this video I want to speak to young people and young
professionals about some of the opportunities and things to focus on during
this pandemic and into the future. The first thing is you want to have an
emergency fund, a safety net of three to six months of expenses. For some
people it might be more than that if they really want to feel safe in case a
potential downturn like this happens, you know at some point in the future, but
it gives you flexibility if something were to happen like this down the line.
The second thing is retirement contributions. You want to continue to
contribute as much as you currently are to your retirement accounts and even
more if you do have some extra money, because again, with the stock market
being down, you actually get more shares with the same amount of contribution.
If you up the contribution, you get even more shares and that helps you way
into the future. And this brings me to my third point. I’ve talked about this
before, the 10 versus 30 rule. The whole idea is if you contribute the same
amount every month starting today for the next 10 years and then you stop but
then let the money actually grow for 40 years versus someone who does not
invest today and starts investing in year 11 and lets it grow to the end of 40
years. The person who actually started contributing today and contributed for
the first 10 years actually has more money than the person who contributed from
year 11 to 40 even though the person who contributed from 11 to 40 actually
contributed for 30 years whereas the first person only contributed for 10
years. Of course this assumes the same rate of return in both situations, but
it shows you why regardless of what the economy is doing, where the stock
market is, you want to contribute now and can continue to make those
contributions because it’s going to benefit you in the long run.
The other thing is a part of this pandemic. You want to look for other
opportunities. You know, one of the big opportunities are where on the flip
side of this are people looking for sales and you might be the customer. So one
example would be buying a car. You might be interested in buying a car, but you
think maybe I, maybe I’ll put it off again right now there’s not a big demand
for it. So you might be able to go and actually get that car that you wanted if
you have some money available and get a really good deal. One of my relatives
actually, um, just got a new car and this person does leasing, but they
actually got their lease this time for the same price as the lease that they
got three years ago. Plus they got some upgrades because the dealerships, they
want any type of sales that they can get right now.
So she was able to get a killer deal. And the last thing you want to pay
attention to is, you know, there’s a lot of programs and things happening
because of the pandemic and one of them is student loan forbearance. So you
want to look into that. Um, Matt Stead, one of our other advisors actually did
a whole another video on that, so you definitely can check that out. Uh, here
on the website or wherever you’re watching this video. And like I said, if you
have any questions related to the topics I just covered, definitely reach out
to us and we’d be happy to help.
