A Letter to Recent Graduates

“Education is a progressive discovery of our own ignorance.”

-William Durant (1861-1947), Automobile Industry Pioneer

We hope you can find use for this letter for a recent college graduate that is close to you!

Dear Graduate-

Congratulations on your graduation and on your hard work over the years. Brian, having four children of his own, is beginning to see his kids reach the same stage you are at now.

We feel passionate about educating young people about their finances. The following link is to a piece Brian wrote a few years ago that may help you – “The Simple 3 for Financial Planning”. Getting off on the right financial foot is crucial for long-term success. Perhaps the most powerful resource that we cite in that piece is “What Makes you Happy?” Overconsuming will destroy your financial future every time. I highly recommend listening to it.

Below are illustrations that seem to surprise most everyone. For people at your stage, it is crucial to know the importance of saving early.

Illustration 1 – Early Earl

Beginning 1/1/1981, “Early” Earl invests $10,000/year into the S&P500 index right out of school in his work retirement plan for 10 years. For whatever reason he stops after 10 years and ends up investing a total of $100,000. Forty years later, at the end of 12/31/20, he had $4,739,501. (11.36% annualized return)

Illustration 2 – Catch Up Carl

Beginning 1/1/1990, “Catch Up” Carl invests $10,000/year into the S&P500 index in his work retirement plan for 30 years. For whatever reason, he needed the new Mustang and lots of fancy items and couldn’t save his first 10 years out of school. Thirty years later, after investing a total of $300,000, at the end of 12/31/20 he had $1,783,593. (9.96% annualized return)

A $2,955,908 positive difference for “Early” Earl who invested $200,000 less!

The numbers could be quite different in the end, but the power of investing early and compounding are undeniable.

Congratulations again on your graduation! It will be a day you remember and continually look back on. Please, call us if we can help you with anything at 678-989-0048 or visit our website at www.striblingwhalen.com.

Regards,

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.

The examples are case studies for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Past performance does not guarantee future results.