Millennials want Financial Independence, not Retirement!
I get all worked up every time I read another one of the same articles on retirement. Save 1x your income by 30, 5x by 50, 12x by 67, yadda yadda ya. I really hate the way the industry thinks. As if anyone in his or her twenties is going to stay with the same career - let alone the same job - earning the same income consistently for 30 or 40 years seems silly, doesn't it?
We're Millennials! We don't play by those rules. So what does that mean when it comes to our retirements? Should we bother saving anything if we're going to start the next Facebook? What if we're going to go back to school in 5 years and land a six figure job?
If you're anything like me, you've probably tried one career and are on your second or third by now. Whether you went to business school and started fresh like I did or switched gears after 5-10 years in banking, consulting, or big law, one thing is for certain: you are unique. So why do so many financial advisors recommend saving a percentage of your income every year, or working a certain number of years?
Instead, I recommend taking a holistic view of your expected earnings over your lifetime. Do you plan to work in Corporate America for a decade and then take the next decade off to raise kids? Better save as much as possible while you can. Maybe you're going into business for yourself and can forecast income growth of 10% per year for the next 20 years - so it'll be more important to start small but ramp up savings consistently.
Consider, too, your lifetime expenses. Do you plan to have kids? Do you want to go back to school? Start a business in your 50's? Retire early?
Once you've considered the big picture, you'll have a much better idea of what you need to do today.