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by Alan J. McMillan | May 15, 2017


Graduates looking up at camera at graduation ceremony

As over 1.8 million college graduates enter the workforce, they face an economic inflection point. Change in their financial life will perhaps never be as dramatic as the transition to career economics.

It is advisable that the Class of 2017 look at a revealing case study of those who preceded them, the Baby Boomers.  Most Boomers have not prepared adequately for their golden years, just ask them.  They wish they had a do-over button; 'If I had only known then what I know now…' goes the lament.

If there was such a button, many Boomers would do anything for it. But if there was, where it would it put them? Squarely where the Class of 2017 is today. I hope this gives pause to use this moment wisely. It is literally priceless.

What did Boomers do wrong?

  • They spent beyond their means and took on way too much debt
  • They did not fully fund their 401k plans
  • They invaded those plans and borrowed against them too often in order to do seemingly good things like paying down credit card balances
  • They did not know where they were financially (where their money went)

Essentially, the priority was work and they put less thought and money into the long term deployment of that money and now they regret it.

The simple lesson for this generation:

Set an Initial-Percentage goal for your 401k

What percentage of your compensation do you put in to your plan?  If you are lucky enough to get an employer match (where they add funds to match part of yours), fully fund to that percentage at a minimum.

Set a Goal-Percentage for your 401k 

The experts say you must set-aside 12-15% of your compensation to achieve future financial independence (that math works).  It is often impossible to put 15% percent away when you begin with entry-level compensation.  It is prudent to have a Goal-Percentage and every year get closer to that goal.  You want to be bold and divert 100% of each annual pay-raise for your first 3-4 years. Then, you should be on target.  Better still, the forces of compound interest will be the financial wind to your back for the rest of your life.

Never divert retirement assets toward expenses while you are working 

If you are tempted down the line to say, payoff credit cards by invading your 401k, don't!  If you have to attack expenses or debt, solve it another way.  Invading your retirement savings will set you up for the biggest problem in your life and one where at that age you have less ability and maneuverability to solve it.

Install, fully implement and become proficient with financial software 

You must begin now.  You can't chart a path to where you want to go if you do not know where you are.  Why now?  Your life will never be as economically simple as it is at this moment.  Get software that will scale with you.  Mint is a great choice and Intuit is trusted by millions and, I might add, has served my family well for decades.

Remember, the opposite of success is not failure, it is conformity.  If you look to your left and right and say, 'I'm OK', likely you are not.  Becoming financially independent is intentional.  This is one area in life where you want to be abnormal or, put another way, exceptional.  Good luck!

A version of this post previously appeared at