By Diana Ramos |Staff Writer|
Students tend not to worry about saving their money until the last possible minute, usually when they have graduated and already have a career.
On Tuesday, Jan. 30 the Osher Adult Re-entry Center hosted a lecture on financing your future.
According to Gabriel Rodriguez from Primerica, there are three reasons why people fail at saving money for the future. It is because they do not have a plan, and are either uninformed or misinformed.
“We do not plan for our future because we believe it is so far away and we like to procrastinate on anything that is not due tomorrow,” said Rodriguez.
Rodriguez used a wedding as an example to explain how much time and planning goes into a 12-hour event.
A wedding typically takes a year to plan and they are no more than 12 hours long. Rodriguez then compared it to a retirement that is usually 32 years long and asked, “How long do you think families take to plan a retirement?”
According to Rodriguez, on average most American families take more time to plan a two week vacation than they do their retirement.
When I asked Rosa Maldonado, 20-year-old student, about how she is planning for retirement she said, “I don’t want to deal with it right now, I feel like I am too young and I am not concerned about it at this time, maybe when I’m 40-years-old I will begin to plan.”
Rodriguez is right; most people do not worry about having a plan for their retirement.
Rodriguez then talks about how we are misinformed. We go to school, then possibly a university and later into the workforce but we are never taught about financing our future. “I have a master’s in business and I never heard about the ‘Rule of 72’.”
Rodriguez added, “The ‘Rule of 72’ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.”
By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself. For example, the Rule of 72 states that $1 invested at 10 percent would take 7.2 years to turn into $2. In reality, a 10 percent investment will take 7.3 years to double.”
Rodriguez suggests that instead of putting your money into a savings account, you should put it into a money market account or a mutual fund because this will make your money grow the fastest.
The last piece of advice he shared was to get informed about our specific financial needs and see someone if we wanted help on how to plan for our future.
Some tips he also shared on meeting people that will be handling your hard-earned money are to always meet them in person, go with your gut and if you can, go based on referrals.
These tips will help you create a plan for your future and help you feel less overwhelmed.