John and Paul look at "9 Things Millennials Don't Understand About Money" from TheCollegeInvestor.com and give their thoughts. Dissecting a Millennial: Millennials don't always know they're in debt. While this is hard to believe, we can see situations where college students don't know what they're getting into when they sign up for student loans. It's extremely important to pay off these student loans as fast as possible. Check out our episode on student debt with Jordan Clemons. Millennials don't know how to repay their student loans. Millennials don't understand their health insurance options. We can definitely understand this one - there is typically little guidance on choosing health plans when you sign up. Paul advocates enrolling in a high deductible health plan and supplementing with an HSA (Health Savings Account). John has always been a fan of being a little more conservative with health insurance and chooses a middle plan for just in case he gets sick. Learn more about health insurance here. Millennials don't know how to handle their bills. We advocate auto-paying all bills you can (just make sure you review the bill first to make sure it's okay and that you have enough money in your bank account). Anything you can't automate, make sure you pay it off as soon as possible so you don't forget. If you do have to pay late, many companies will waive the late fees if you ask and it's your first time paying late. Millennials don't understand the power of compound interest. The biggest advantage you have as a millennial is time! The interest you earn on your investments today will also keep earning interest. The Rule of 72 - divide 72 by your expected interest rate to get how many years it will take for your investment to double. For example, if you expect an 8% annual interest rate, your investment will double value every 9 years (72/8). To learn more about compound interest, check out our previous episode. Check out this article from Business Insider to learn the importance of investing at age 25 vs. age 35. Millennials don't understand the history of money. The article claims millennials are too scared to invest. We actually disagree and feel as if many millennials are a little too bullish, as they most likely started investing after the stock market crash. As long as you have a long-term outlook on investing, the U.S. economy is practically guaranteed to grow and you will make money. You never know when the next recession will hit! So invest now! You can't time the market. The best time you can spend today is to check out our episode on the economy and investing with Keith Blakely. Millennials don't know how to do their own taxes. John believes if you are a W-2 employee and have minimal investments, you should prepare your own tax return to save money. If you have more investments or freelance income, you should probably hire a tax preparer as your return will be more complex and you could be missing out on deductions, state and local filing obligations, or planning opportunities. Millennials don't understand the importance of follow up. Make sure if you move you don't lose track of any bills. Millennials don't know how to negotiate. If you think you're worth more, be sure to negotiate your salary. John is a prime example - if he trusts you he'll assume your price is fair (and vice versa). Paul tells a story of how everything is negotiable in China. At the end of the day, it all depends on what you're purchasing and how much you trust the other person. Special shoutouts and show notes: Kyle Elmore - White Picket Real Estate (check out his episode) for providing the wine on today's episode. Velvet Devil Merlot
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