Advice for Brand-New Wealth Builders

The earlier you start, the wealthier you'll be

Author

Bryan Hasling, CFP®
January 25, 2024

As a perk for my ongoing clients, I offer private money conversations with their children.

Here's a bit on why I think it's so important, and the most common advice I give to young people just getting started.

In this piece

The earlier we start, the wealthier they’ll be

After a few money setbacks when I was younger, I got lucky and eventually benefited from a non-parent teaching me about money.

It helped tremendously. Now I pay-it-forward any chance I get.

The math is clear - the earlier you get started saving & investing, the better set you are to reach financial independence.

Since children often don't want yet another lecture from their parents, I often get tagged in to help.

  • It’s good for the kids - they get custom advice from a pro

  • It’s great for parents - your family learns important life-lessons early!

Based on dozens of conversations with clients' kids, here are the most common topics and advice I give to new wealth builders.

Top Money Advice for New Wealth Builders

Sign up for your 401(k)

Even if it’s a minuscule amount, just sign up.

If you have an Employer Match, that’s a great start. But don’t be afraid to do a little more.

Even if you don’t receive a Match, I still suggest getting started small.

Over time, your goal is to gradually increase this %. Even if in 1% increments.

Saving & investing for your Future Self (automatically) has never been a bad idea. I promise, you will thank yourself.

Roth versus Pre-tax Savings (if you have a choice)

People really over-complicate this one. But when you’re new to the working world, here’s a simpler framework:

Do you believe this is the lowest salary you’ll earn over your career?

If so, Roth is almost-always the right answer. Pay the tax now, and you’ll never pay tax again. As your income grows, you can consider switching then.

Build Cash

Saving for retirement is cool and all, but building cash helps you out today.

It’s time to start training your brain to think about future (large) goals, and then set up your cash to help you get there.

Do you want a new apartment? How much is rent +deposit?

Do you need a new car soon? How much in cash will you need?

You shouldn’t invest any money you might need soon. Cash is king with upcoming purchases.

High-yield Savings account

When you’ve built a cash cushion, you’ll need a place to earn some strong interest. So in addition to a checking account (for paychecks and bills), you’ll want a high-yield Savings account.

There are tons of options these days (so I won’t offer any). But in today’s climate, it’s not hard to find banks paying over 4% APY.

Open your first credit card

If you ever want to borrow money (ie. for a car, or a house), you’ll need to show the bank you can be trusted.

But most young people have no borrowing history though.

This is where a Credit Card helps. Something showing you can borrow a few bucks each month and pay it back easily.

Credit cards can get people into BIG trouble though. So to keep you safe, here are my rules for a first credit card:

  • $0 annual fee

  • Pay off every month (and you’ll never pay crazy high)

  • Set up automatic bill pay

Let me be clear: this is not about racking up points, and this is not an emergency fund.

Your income has not changed, and neither will your spending.

This is about creating a healthy borrowing record. Anyone that tells you different is misinformed.

Why I feel this is so important

In a sea of endless information online, and noisy friends giving out-of-context advice, it can be hard to know if you're doing the best things with your money.

I was baffled at first.

Fortunately for me, I had some early mentors give me a solid foundation to grow my now-healthy net worth on.

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