ENCINO, CA / ACCESSWIRE / December 31, 2020 / As 2020 has finally drawn its last breath, financial planner, Matthew Murawski reflects on the unprecedented year and is already planning for 2021.
"We witnessed history in 2020," Murawski explains, "The events that unfolded in the last year were impossible to predict and have left a lasting mark on the financial market and the ways millennials should invest."
Although 2020 was not without hardship, there was some good that came out of the tumultuous year. As 2021 dawns, Murawski shares his top 3 tips for millennial investors.
1. Run Towards The Fire.
In my opinion, although this can be absolutely terrifying in the moment, embracing the disaster is the best thing to do when the markets crash. In March, the stock market hit some of lowest lows many millennial investors will likely experience in their lifetime, and those that took advantage of these lows, are already reaping the benefits.
"Millenials have an extensive time horizon before them, some millennials still have over 30 years before retirement, for this reason, they can afford to take some risks," says Murawski. There is risk of capital loss when investing and each individual has unique circumstances and therefore should consult with their investment advisor before making any investment decisions.
While he wouldn't advise his clients in their late 60's or 70's to make risky investment decisions, millennials can take a "risk-on" approach because even if their investment goes south, they have plenty of time to recover from it.
"I always recommend that any of my clients have at least 6 months of emergency funds kept somewhere secure, such as a savings account that yields around 1% interest. If you have that safety cushion, your early investing years are the perfect time to think about taking risks for the opportunity to potentially see big upside.," says Murawski. Investors should take into consideration their own risk tolerance as well as consult with their investment advisor before making any investment decision.
2. Avoid Being Cash Poor...and Consider Renting Versus Buying.
Millennials across the nation are beginning to experience the societal pressure to buy a house. However, this might not be the best financial decision. For one, houses are not true investments, real investments yield returns, while typically, a house is going to simply cost the owner more money in property taxes, insurance, upkeep and repairs among all of the time and the expense it takes to furnish a home. Buying a home too early, simply because it is "the thing to do," is one of the worst mistakes Murawski witnesses young people make. If someone buys a home but has to borrow from their 401k, the bank or family members, chances are they're going to end up cash poor. They may have a beautiful home but they won't be able to enjoy their lifestyle otherwise. Always consult with your CPA or investment advisor before making such a large purchase.
Renters on the other hand, aren't liable if something breaks in the home. If a storm damages the roof, they aren't out $40,000 for a repair, the landlord is responsible for the fix. Furthermore, the pandemic created more opportunities to work remotely than ever before. In an era in which one can work from anywhere in the world, why limit oneself to a single location?
3. Don't Rush Funding a 529 Plan
As a parent himself, Murawski understands the desire to immediately begin funding a child's college account. However, he advises making sure the parent's retirement plan is taken care of before beginning to fund a 529 plan.
"I always tell my clients that they need to put on their own oxygen mask first before taking care of their child. If you put all your funds towards 529 before prioritizing your retirement plan, you run the risk of not being able to take care of yourself later in life. The last thing you want is for your kids to get out of college, and start their own lives only to have to take care of you because you didn't plan for your own financial future," warns Murawski. Each family's individual situation is unique and therefore should consult their investment advisor.
Murawski's desire to help others make the most strategic financial planning decisions stems from his own experience witnessing his parents receive less than prudent financial advice. "I believe teaching financial literacy is key to breaking bad financial habits passed down generationally. " Murawski works with The Youth Business Alliance in Los Angeles, where he speaks to lower income school kids about the power of compounding interest and marketable job skills. "My favorite part of YBA is spending an afternoon giving mock job interviews to kids, helping them learn skills I've picked up over the years. Originally from the Midwest, Murawski moved to Los Angeles more than a decade ago. He got his start in the financial industry working for a small-cap venture capital firm until he met Alan Goodstein, founder of Goodstein Wealth Management. Murawski has worked for the fee-only financial planning firm for almost 9 years and has dedicated himself to providing his clients with premium service, fiduciary advice, and solid, long-term investment strategies.
Contact Name: Matthew Murawski
Business Name: Goodstein Wealth Management
Address: 15760 Ventura Blvd. Ste. 1520 Encino, CA 91436
Phone Number: 818-257-0592
Website Link: http://www.goodsteinwealthmanagement.com/
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SOURCE: Matthew Murawski