| Editor’s note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it. |
Delivering a commencement address can’t be easy. It requires at least a few good jokes and, of course, some memorable anecdotes. Great speeches also impart wisdom, simultaneously applauding new graduates on their accomplishments and encouraging them to embrace their uniqueness, find joy, work hard, and make a difference. That’s a tall order.
The order is even taller this year. After all, the class of 2021 is likely burned out from Zoom meetings and bummed out about lost internship opportunities. For some lucky graduates, their colleges are holding modified in-person graduation ceremonies. For others, graduation is yet another virtual event.
How can we, as investors, impart wisdom to the unique class of 2021?
First, we can point out to new graduates that they have something terribly valuable from a saving and investing perspective, something that many of us have so much less of: time. By saving and investing as early as possible, new grads can turn their money into what my colleague Karen Wallace has called “superdollars“–dollars that hold tremendous growth potential because they have three or four decades of compounding ahead of them.
Of course, those with sizable student loan debt and low-paying first jobs may not have extra dollars to spare. But we should nonetheless encourage them to find a few bucks to save, particularly if they have access to an employer-sponsored retirement plan that matches the contributions its employees make. We need to tell them that if they save early and often, the $1 million 401(k) plan balance that seems out of reach today can become a reality.
Then let’s get the new graduates in our lives on the right money path with a meaningful financial gift. Maybe we give cash that we earmark for their emergency funds. Or we cover a student loan payment. Or perhaps we gift stocks from our portfolios. And along with the financial gift, let’s include a favorite investment book that we learned from or turn the grad on to a money-related podcast that we enjoy–or share a link to Morningstar’s Money Guide for New Graduates.
Lastly, let’s remind the new grads that they’re resilient. That quality will serve them well in investing–and in life.
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