Hi I am Erin Passer, the Founder and CEO of mint.com and today we are going to cover some money topics specifically for young professionals. So number one, how to choose the right credit card, number two why should start investing as soon as possible and number three, how to have more money without working any harder. So number one, how to choose the right credit card! If you are like me, you get three to five credit card applications in the mail every week, some of them have pretty pictures of beaches, some of them are from your alumni or professional association, so which do you choose? Well, the right credit card for you completely depends on who you are and how you spend. If you carry a balance, you are going to be slammed with all sorts of finance charges and the most important thing for you to do is to find a good zero percent intrarate card so that for the next six to 12 months, you do not have those pesky finance charges building up. So if you have the discipline to pay off your credit card in full each month, you really want to optimize for rewards. You can actually get credit card that pays you for every dollar that you spend and you should not settle for anything less than 1% cash back or 0.1 or one mile per dollar spent and you can actually do much better. Second piece of advice will be to start investing while you are still young preferably while you are in your 20’s.
Are you saving for retirement?
I was, but I am not anymore.
I do save for retirement. I have 401k and a Roth IRA.
I save for retirement as well and I have both of those.
Good for you!
Good for you!
Let us say you make a 10% return on a thousand dollar investment. After the first year, you will have $1100.00. After the second year, you are earning interest not just on the original thousand dollars, but on the interest from the first year as well and you will have $1210.00, so you interest earns interest each year and it starts to grow out of control in a good way, that is compound interest. The longer you let it ride, the better off you will do. Our third topic today is how to have more money without actually working any harder? Banks really like to giveaway thing like free checking and free savings accounts because then you deposit your $10,000.00 in there and they go off and loan that money, small business or for mortgages at 7% or 8%, so they are getting 7% or 8% on the money that you put in and that is interest that could be yours. So if you switch to a bank like ING or HSBC or E-Trade bank, you can get 3%, 4%, 5% interest on your deposits and for the average person, that means $500.00 to $1000.00 in additional income without working any harder every year. So in conclusion, number one, get a credit card that pays you! Number two, start investing as early as you can! And number three, make sure that you get a bank account that pays you at least 3% or 4% interest.
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