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Ed McQuarrie shares post-college financial advice
Thursday, Jan. 6, 2011
A college graduate's first job out of college is a cauldron of expectations, excitement and opportunity. The last thing the average 22-year-old wants to think about is financial planning for the future.
But Ed McQuarrie, a Leavey School of Business professor at Santa Clara University noted for his scholarly articles on financial planning, says such newbies have a golden chance to get started on the right foot financially.
His top pieces of financial advice for first-time workers:
It's the recurring expenses that will kill your finances.
Pretend you're still a starving student, even if you're not.
Retirement investing is a must, but not necessarily the way the experts say it must be done.
Both of which are potentially very wrong, says McQuarrie. For starters, you may want to open and fund an IRA if your company's 401(k) is not a good one (a good financial planner can analyze it for you, but one warning sign is not many index funds or very exotic mutual funds to choose from). If you go the IRA route, McQuarrie says think twice about a Roth: getting a tax deduction now can be very valuable, and he predicts many young workers won't be in a higher tax bracket when they retire, anyway.
Benefits aren't just for old men in black socks and sandals.
New dogs need to learn old tricks.