Advice for College Graduates- Part I

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 As I reflect back on my college years I mainly remember how much fun it was and then once I entered the ‘real world’ feeling a bit shocked at the reality of it all.  There is definitely a feeling of leaving one world and entering another completely different one.  I also remember receiving very little coaching about how the new world game was played.  That led to a lot of mistakes…or what I now call “learning opportunities”.  In this two-part series, I’ll share with you twelve of the lessons I wish someone had shared with me back then.

  1. Be flexible in finding a job.  If you listen to news from Washington, you’d believe that unemployment is dropping steadily and now rests at about 7.5%.  The truth is 7.5% does not reflect the massive number of people who have simply quit trying to get a job and it is certainly not reflective of unemployment rates for college graduates.  It’s still a tough job market.  You should never lose sight of, or stop working towards, your ideal job but in this market take the best job you can find.  What you want to capitalize on is work experience.  Whatever the job is, treat it as if it’s the best job in the world and your goal should be to master the position.  Learn the habit of always giving your very best.  People (employers) will notice. 
  2. Get more education.  The alternative to getting a job now in a bad job market is to get more education.  When I graduated from college I was very ready to be finished with school but in today’s environment an MBA or other advanced degree can be very valuable and buy you some additional time for the job market to continue to improve.
  3. Begin saving from your very first paycheck.  This habit, more than anything else, will make you wealthy over time.  It is the single most important key for most people who become financially independent.  Start with a minimum of 20% of your paycheck…more if you can swing it.  Ten percent will be for long-term investing and, in a separate account, the other ten percent will be for future ‘big ticket’ items such as down payment on a home.  Set this up so that the money is either automatically taken from your paycheck or transferred from your bank account to an investment account.
  4. Learn about personal finance and investing.  If you were to commit thirty minutes per day to studying personal finance and investing, you’d be a ‘genius’ in a year!  Seriously, this stuff turns out to not be that difficult to master.  Mostly, it’s simply paying attention to your money and investing on a consistent basis.
  5. Buy a home.  Homes took a beating during the years following the 2008 financial crisis but owning a home is still one of the best strategies for building wealth.  Home prices are still in recovery mode and mortgage interest rates are very attractive so if you can figure out how to put a deal together, now is a great time.
  6. Avoid ‘bad’ debt.  If you could learn this lesson now, it will save you much misery in the future.  The definition of bad debt is any debt that is used for purchasing something that is declining in value.  For example if you use a retail store credit card to buy a closet full of clothes and then face months’ worth of payments…that’s bad debt.  Using a credit card to finance a big night on the town when you know you can’t pay the credit card bill in full when it rolls around…that’s bad debt.  Buying furniture and appliances on credit is bad debt. 

Next week, I’ll continue this discussion beginning with the best strategy for dealing with the ‘bad debt’ associated with buying a car.