How the young can get rich

I agree with the guy from Price. While it's true that paying off high-interest credit card debt is always a good idea, it's just not good advice to hold off on investing here in America, where the average household carries a $5,100 credit card balance, according to the Federal Reserve's Survey of Consumer Finances. If they wait until they've paid off their credit cards, the majority of Americans would forgo investing altogether because they'd be focused on this one area of their finances rather than on the bigger picture. Unless they can eradicate debt very quickly, they'd miss out on the magic of compound earnings.

The same goes for student loan debt which, by the way, is tax-deductible. If you happen to be stuck with a private student loan with a high interest rate, by all means, go on an accelerated payment plan and get that off your back. But try to allot something -- even a small amount of your pay -- to a retirement plan.

Focus on the present
We should apply our multitasking skills in our personal finances. So a good strategy would be to pay off debt from the past and invest for the future at the same time. Of course, you can't have everything and you'll likely have to give up something. How about rethinking some of the urgent needs that you have in the present?

For instance, rather than be swayed by the whims of fashion, why not go for a basic look that will endure? How many pairs of shoes do you need? And who says you have to pay $40 or $50 for a haircut? You can find a good hairdresser and get the job done for half the price. And why spend a lot of money making a landlord rich so you can have a spacious apartment? And what is the most important function of your car -- to convey status or convey you from one place to another?

You get the idea. Rethink your priorities, because chances are you can easily let go of some of these "necessities" and build yourself a fortune instead.  

Longtime financial journalist Barbara Mlotek Whelehan earned a certificate of specialization in financial planning. If you have a comment or suggestion about this column, write to Boomer Bucks.


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