Things You Don't Learn in School

Life has many lessons to teach us, some more painful than others—and some we’d just as soon be spared. But the graduates of 2021—well, they’ve been through a lot, arguably more than most—but with any luck at all, the days and years ahead will be brighter. 

Regardless, if you have a graduate—or if you are a graduate, here are some insights I’ve picked up along the way…   

ASAP is never as soon as people think.

Even those who work for themselves have bosses (they’re called “clients”).

Emails (generally) don’t have to be answered right this minute.

Bad news doesn’t improve with age.

Your first job can be like your first love—it will either bring a smile for years to come—or it can break your heart. And sometimes both.  

Don’t expect your job to respect personal boundaries without some “help.”

Don’t be afraid to pick up the phone.

If the only time your boss hears from you is when there’s trouble, don’t be surprised if they don’t look forward to your visits. 

Book some quiet time in your day.

Most meetings really could be replaced with an email.

You’re either early—or you’re late.

There is an inverse relationship between the number of people in a meeting and its productive output.

Everything you’ve heard about your elders isn’t true. But some of it is.

Generalizations are (almost) never accurate.

The world is made up of introverts and extroverts—learn and respect the difference(s).

Just because you’re young(er), people are going to assume you know things you don’t—and assume you don’t know things you do.

A picture may be worth a thousand words, but sometimes it pays to read the fine print.

Never say you’ll never…

Always sleep on big decisions.

Never let your schooling stand in the way of your education.

Sometimes the grass on the other side looks greener because of the amount of fertilizer applied.

Never miss an opportunity to say, “thank you.”

If you wouldn’t want your mother to learn about it, don’t…

Comments that begin “with all due respect” generally aren’t.

Sometimes the questions are complicated, but the answer isn’t.

That 401(k) match isn’t really “free” money—but it won’t cost you a thing.

And most of all, don’t forget that you’ll want to plan for your future now—because retirement, like graduation, seems a long way off—until it isn’t.

Congratulations to all the graduates out there. We’re proud of you!

- Nevin E. Adams, JD

p.s.: Got any advice to add to this list? Share it in the comment section below!

How the Class of 2020’s Retirement Plans Will Be Different

Each year the good folks at Beloit College produce a “Mindset List” providing a look at the cultural touchstones that shape the lives of students about to enter college. So, in what ways will their retirement plans differ from those of their parents?

In the most recent list (they’ve been doing it since 1998), the Beloit Mindset List notes that for the class of 2020 (among other things):

• There has always been a digital swap meet called eBay.
• They never heard Harry Caray try to sing during the seventh inning at Wrigley Field.
• Vladimir Putin has always been calling the shots at the Kremlin.
• Elian Gonzalez, who would like to visit the U.S. again someday, has always been back in Cuba.
• The Ali/Frazier boxing match for their generation was between the daughters of Muhammad and Joe.
• NFL coaches have always had the opportunity to throw a red flag and question the ref.
• Snowboarding has always been an Olympic sport.
• John Elway and Wayne Gretzky have always been retired.

So, what about their retirement plans? Well, for the Class of 2020:

• There have always been 401(k)s.
• They’ve always had a Roth option available to them (401(k) or IRA).
• They’ve always worried that Social Security wouldn’t be available to pay benefits (in that, they’re much like their parents at their age).
• They’ve always had a call center to reach out to with questions about their retirement plan.
• They’ve never had to wait to be eligible to start saving in their 401(k) (their parents generally had to wait a year).
• They’ve never had to sign up for their 401(k) plan (their 401(k) automatically enrolls new hires).
• They’ve never had to make an investment choice in their 401(k) plan (their 401(k) has long had a QDIA default option).
• They’ve always had fee information available to them on their 401(k) statement (it remains to be seen if they’ll understand it any better than their parents).
• They’ve always known what their 401(k) balance would equal in monthly installment payments.
• They’ve always had an advisor available to answer their questions.

Most importantly, they’ll have the advantage of time, a full career to save and build, to save at higher rates, and to invest more efficiently and effectively.

- Nevin E. Adams, JD

13 Things About Work You Probably Didn’t Learn in School

This weekend our youngest will graduate from college. It’s a big day for him, of course, and a big deal for us, having for some part of the past eight years had either one, two — and for one interesting year, all three — of our children in college at the same time.

Life has many lessons to teach us, some more painful than others. But as my son — and graduates everywhere — look ahead to the next chapter in their lives, it’s a natural time for the rest of us, particularly those of us who are parents, to reflect on the lessons we’ve learned along the way.

So, for my son — and all the other graduates out there — here are some things I wish I had known when I entered the workforce:

 

1. If you don’t speak up, people will assume you’re happy with the way things are.

 

2. If you wouldn’t want your mother to learn about it, don’t do it.

 

3. Never assume that your employer (or your boss) is looking out for your best interests.

 

4. You can be liked and respected.

 

5. Be very careful when using the “Reply All” button.

 

6. Never miss an opportunity to tell someone “thank you.”

 

7. Be willing to take all the blame — and to share the credit.

 

8. Know at least a little about sports and the weather.

 

9. Never assume that “senior management” knows what they’re doing.

 

10. Watch your language. People notice people who don’t curse.

 

11. Sometimes the questions are complicated, but the answers aren’t.

 

12. That 401(k) match isn’t really “free” money — but it won’t cost you a thing.

 

13. Plan for your future now because retirement, like graduation, seems a long way off — until it isn’t. 

Congratulations to my son — and all the graduates out there. We’re proud of you!

- Nevin E. Adams, JD

Different Mindsets

Last week Beloit College released the Beloit College Mindset List, as it has each August since 1998. Originally created as a reminder to faculty to be aware of dated references, the list provides a “look at the cultural touchstones that shape the lives of students entering college.”

For example, this year’s freshman class, born in 1994, have never known a time when history didn’t have its own channel, when there were tan M&Ms (or when there weren’t blue ones), or when “It’s A Wonderful Life” was shown more than twice during the holidays. They grew up talking about “who shot Mr. Burns?” not “Who Shot J.R.?” and while for them there’s always been an NFL franchise in Jacksonville, they’ve never known one in Los Angeles. That floppy disk icon for “save” in the word processing document is as anachronistic to them as the “CC” reference to “carbon copy” likely was to their parents’ email. And, perhaps most significantly, they have never lived in a world without the World Wide Web.¹

Despite those differences, the class of 2016 will one day soon be faced with the same challenges of preparing for retirement as the rest of us. They’ll have to work through how much to save, how to invest those savings, what role Social Security will play, and—eventually—how and how fast to draw down those savings.

Those fortunate enough to have access to a work place retirement savings plan at least stand to have some advantages their parents didn’t. They’ll have a better shot at joining those programs immediately, rather than waiting a year, as was once the norm. There’s a growing chance that they will be enrolled in those plans automatically,¹and with the option to increase that initial contribution automatically as well. The expanding availability of qualified default investment alternatives, like target-date funds, should make their investment choices easier and better diversified, and some will likely benefit from the counsel of a growing number of expert advisors. As for help in figuring out how best to draw down those savings in retirement, more choices and alternatives come to market every year.

However, they also have another big advantage (and one that helps make all those other advantages all the better): They’ll have the advantage of time, a full career to save and build, to save at better rates, to invest more efficiently and effectively.

It’s more than just a shift in mindset—and it could give retirement saving a whole new perspective.

- Nevin E. Adams, JD

¹ The full 2016 Mindset List (and links to prior years’ lists) is online here.

² EBRI has recently quantified the impact of eligibility for participation in a 401(k) plan on retirement readiness for Gen Xers. See this report online here. See also “Retirement Income Adequacy for Boomers and Gen Xers: Evidence from the 2012 EBRI Retirement Security Projection Model,” online here.

College 'Bound'

In just a couple of months, I will find myself in the unenviable financial position of having two children in college at the same time.

Now, if you have put—or helped put—your children through college in recent years, you’ll have an appreciation for the impact of that statement. If your kids are younger—or if kids are not yet part of your household budget—well, let me just say you don’t have nearly as much time to get ready as you think you do.

First off, you don’t really know how much it’s going to cost. There’s the whole private-versus-public decision (the costs of the latter will be heavily influenced by your current state of residence), and even that decision can be driven by the field of study your graduate chooses to undertake. Each school has different policies (and costs) about things like meal plans, student vehicles, and even how the dorms are furnished.

But the worst of the variables is the sheer annual increase in tuition. My eldest, who will be a senior in the fall, will be presented (well, technically, I will be presented) with a tuition bill that is roughly 20% higher than the one she got just a couple of years ago. Talk about your moving targets!

Now, I said the worst of the variables was the increase in tuition, but a close second has to be the bite the market has taken from the money we had set aside in their 529 college savings programs (see my 2003 column on the experience, “IMHO: College ‘Education’”). At one point, I had hoped that those investments—in target-date funds before target-dates were “cool”—would grow enough to make up for some of our late start in saving for college (braces first, you know?). Now—well, you know what’s happened there. Despite that, I’m proud to say that the family CFO (and that’s not me) has figured out ways to increase our 529 savings without dipping into the retirement fund(s).

Savings Parallels

Still, as we’ve spent the past couple of months trying to figure out how we were going to pay for whatever college daughter No. 2 chose (and not a little time trying to prepare her for a financial fallback, just in case), I’ve seen any number of parallels between saving for college and saving for retirement.

There’s the uncertainty of the amount, the unknown impact of inflation and/or higher prices and, of course, the market’s “contribution.” As with retirement, there is a “target date” of sorts—one that can, at least in theory, be postponed, and one can certainly choose to adjust one’s choice(s) to accommodate financial realities as that date draws nigh. And, as with retirement, a lot of uncertain nights between the planning and the actualization of the event itself.

As it turns out, my two daughters, through their hard work and effort (spurred by their mother’s constant pressure to complete the applications and essays, and doubtless aided by their father’s gene pool contribution) have both managed to obtain academic scholarships that have made it possible for them to attend colleges that would, in all likelihood, otherwise have been beyond our means.

Ultimately, while we had done the right things, the right way, we had perhaps not done enough, or done the right things the right way soon enough. And while our daughters would have been able to go to college—and good colleges—regardless, as a father, I’m thrilled that they’ve been able to pursue this education at the schools they chose. Still, with one more at home to clear that hurdle (just two years hence), it’s been something of a financial wake-up call, a real college “education.”

Many retirement savers—including this one—may well find themselves in the same boat one day. Having done the right things the right way(s) for a long time, they could nonetheless one day find themselves coming up short due to any number of circumstances beyond their immediate control—and some choices that aren’t. Ask any parent; time has a way of slipping away from us, and tomorrow is always closer than it seems.

—Nevin E. Adams, JD