Personal Finance Interview with LaTisha on Millennials and Money
Blogger LaTisha Styles was one of those lucky recent college graduates who, after nabbing her college degree, had trouble nabbing that first job. So she decided to build her own gig by creating a her blog, Young Finances, which offers young adults like herself advice on money management.
While most young adults might be more focused on surviving life on their own and learning the ropes at their first job, LaTisha says they shouldn't neglect their finances. In fact, she says there's not time like the present to get your money working for you.
"Learning to invest early will allow young people to build their skills over time and become savvy investors," she says. "They will be able to see more of the highs and lows of the markets and get more comfortable as time goes on."
And if you're looking for inspiration, she says to read up on Warren Buffett, who started investing at a very young age, benefitting tremendously from the years of experience learning the process and sticking by it even when new investors were chasing hot ideas or themes.
We recently checked in with LaTisha to get more investment advice as well as get her take on the smartest decisions young adults should be making about their money. Here's what she had to say:
Hi, LaTisha! Can you tell us about Young Finances? When and why did you start your site?
I started Young Finances after graduating college in 2010 with a degree in Finance. It was really tough for me to find a job with the way the economy was so I decided to create my own job. I wanted to put to use the knowledge I had learned in college and help young adults start on the right financial footing.
Who should be reading it?
Young Finances is geared towards the beginner. I cover simple budgeting, easy investing and really get into a step-by-step process for building wealth. The site is perfect for those just graduating from college and looking to manage their money the smart way. The idea is to help millennials budget, invest and achieve success!
How did you become so passionate about personal finance?
The "Great Recession" forced me to learn about personal finance pretty quickly. I had already taken an interest in building a business and I knew at some point I would be running my own company. So I knew that I would have to learn how to manage corporate finances. However, my personal finances took a dive during the recession and I wanted to learn the system so I could beat it. I read the book Rich Dad, Poor Dad and I decided to take control of my personal finances and turn things around.
What are the biggest mistakes you think young people make when it comes to money management?
Assuming that future money can pay for present mistakes is the biggest issue I see for young people. I did the same. I assumed that borrowing extra money for college was no big deal because I would find a job to pay it all back. Instead, I should have measured the cost versus the risk that I may not find a job immediately. I know now that pushing the responsibility of money management into the future is a foolish way to handle your personal finances today.
What do you think are the smartest things young adults can do with their money?
Save. Save. Save! Take advantage of the fact that you have minimal financial obligations now. That way, once you are ready to take on more financial obligations (baby, house, etc.) you will be ahead of the game. Also, you will have more freedom if you decide that you no longer enjoy working a 9-to-5 job and you want to strike out on your own.
Why is budgeting important and are they one-sized-fits all? What's your advice on creating a budget that you'll actually keep?
I always like to say that a budget is a roadmap and it can help guide you to your personal goals. Using the same budget as the next person assumes that you have the same goals, income and expenses. Your budget is personal and should help you save and invest according to your own personal situation. Remember that a budget is flexible and can and should change as your circumstances change. A high savings rate may work for a while but then you may want to save for a short-term travel goal. Giving yourself the flexibility to change will help you stick to your personal budget.
What's your advice to people who want to start investing but are overwhelmed? What are some good ways to enter the game?
First, decide if you are an active investor or a passive investor. For active investors who want to pick their own stocks, I always recommend starting with a demo account and just playing around. You don't know what you don't know. Most questions will come up while you are learning to place a trade for the first time or when you are trying to research a stock. I also recommend starting with the book The Intelligent Investor. It's very thorough and will help the beginner investor. If you make it through that book, you will have a good grasp on what is needed to invest in individual stocks. Then if you decide that active investing is not for you, I recommend investing passively into index funds or ETFs.
What do you think are the most common mistakes novice investors make?
Newbie investors are emotional. They experience excitement when their portfolios perform well and despair when their portfolios perform poorly. More experienced investors have learned to detach their emotions from their investments. Each investment should be evaluated based on the risk and potential return. If the risk is higher than you are comfortable with, it is likely not a good investment for you. I know because I used to invest with my emotions. But now I know what I'm willing to risk and I invest accordingly.
What are some of your favorite money-management tools (websites, apps, books, etc.)?
I like tools that simplify my life. I learned a lot about investing from Investopedia. There is a huge database of investing definitions there. For budgeting I use Mint, Manilla and an old fashioned spreadsheet. For wealth management I like Personal Capital so I can view and track my net worth across all of my accounts. One of my favorite books is The Richest Man in Babylon because it lays out a simple budgeting method and teaches you to pay yourself first. I find that the best way to manage your money is to know your money so I always like to use tools that help me stay on top of my spending and saving.