Beth Ford, Land O'Lakes CEO
I think you have to work for money in order to understand its value. My advice to this generation of young adults would be to get started developing their work ethic even before they start their careers. Find a job, work hard and develop a strategy for managing your money—save for the future, invest your time and money in others and in your community, and spend on what makes you happy and healthy
Hank Paulson, former Secretary of the Treasury
Among the most important things we've tried to communicate to our children is to live in an environmentally and financially sustainable way which helps protect the planet and your economic security in a world where there is almost certain to be unforeseen adversity and risks. That means consuming less and saving and investing more.
As young people make decisions about which jobs to pursue, I always tell them that learning is more important than initial compensation. They can't afford not to learn. They should choose a career that truly fits their skills and interests because, ultimately, they are only going to enjoy something where they can do well and succeed.
When it comes to how they spend their money, young adults owe it to themselves to be financially literate, to try to live within their means and never to borrow or invest if they don't understand the terms. Often the terms are framed in technical jargon, which is difficult to understand and unfortunately there are sometimes unscrupulous lenders who take advantage of trusting people. So, they should insist that terms be explained in plain English.
Whitney Wolfe Herd, Founder and CEO of Bumble
Never be financially dependent upon anyone else in your life. Don't rely on a parent, a spouse or a boss. It will only erode your self worth and negatively impact the important relationships in your life. Instead, learn to save money, make money and then you can rule your own world!
Andy Sieg, President of Merrill Lynch Wealth Management
There's good news and bad news for young adults today. Thanks to longevity, you could live 100 years or more, though unfortunately your longer financial life may begin under a mountain of student debt. Start by mapping out your priorities and create a plan aligned to your financial goals. This is different for everyone. Early on, stick to a budget, and track expenses to identify areas to reduce them. For those with debt, pay off high-interest, non-tax-deductible first such as credit cards, then more aggressively tackle lower-interest debt such as student loans or a mortgage. Also, take advantage of workplace benefits such as a 401(k) and employer match, as well as health savings accounts. Discipline, early planning and guidance can accelerate your journey to financial freedom and help you achieve more life goals.
My wife and I have been in the financial advice business for decades. Our philosophy is to make sure our 16, 13 and 9-year-old children feel informed about the economy, markets and money, and not intimidated by them. We look for natural opportunities to educate them on these topics so that they understand the world.
Markets represent opportunity, and it's never too early to start learning the lifelong benefits of good saving and investing habits. Time is one of their best allies. Regardless of what path they take in their lives, we hope to instill an understanding of and appreciation for what the economy and money has the power to do, for them and for others.
Abigail Johnson, Chief Executive, Fidelity Investments
I've passed along the same advice that I was given when I was a kid: be cautious with leverage. What I mean by leverage is buying assets with borrowed money. It's dangerous and can be financially toxic when people use too much credit card or home equity debt to pay for current consumption. I was taught to have the patience to invest for the long-term and build a portfolio that can withstand market downturns, which also means being responsible with how you're spending money. I call this having an investor mind-set.
This means several things, including don't optimize the easy short-term solution at the expense of a harder and less certain—but more promising—long-term opportunity. It means your investment decision process should be analytical, logical, and grounded in empirical data. Calibrate the risks and know which ones, if not properly addressed, can sink your money plans.
When the stock market and real-estate prices are going up, leverage can seem like a sure way to boost returns. But when the bull market eventually stalls, as it always does, then too much debt can quickly overwhelm an individual's personal finances, just like it does with a company's balance sheet.
I'd encourage this generation to take a long-term view of the stock market and stay appropriately diversified across stocks, bonds, and cash. Pretty boring, I know, but as my Fidelity colleague Peter Lynch says, the most important organ for investing is the stomach, not the brain. Being diversified based on your age, personal circumstances, and tolerance for risk will help you stay the course when market volatility spikes. Asset allocation is still the most important factor in determining the long-term risk and return characteristics of a portfolio.
Whether with money or work, I tell young adults to always have a hunger and intellectual curiosity to learn. When I meet with interns and new hires at Fidelity, I encourage them to think of their career paths as a stream of experiences. Don't get caught up with trying to get a specific job title, because a title in one company could mean something completely different in another. Instead, focus on obtaining new skills, more education, and new experiences. Always bring your whole self to work and get involved in the communities where you work and live—if you do this, you'll have a lasting impact and find more meaning in your job.