Shelley O’Connor is the head of field management at Morgan Stanley Wealth Management.
Here’s her best advice to take control of your finances:
What is the most important thing someone can do at 25 to create a secure financial future? At 35? At 45? At 55?
At age 25, most people are just starting out in their careers and are strapped for cash. Even so, you need to force yourself to start investing for the future. Put some money away each month—even a small amount—into a mutual fund or ETF (Exchange-Traded Fund). Make it automatic if you can, and if your employer offers a tax-advantaged retirement plan with a company match, take advantage of it. Put the money away and forget about it, and you’ll be amazed how it can potentially grow over the decades.
At age 35, keep up the savings and investment discipline and increase the amount you put away every year. Individual Retirement Accounts (IRAs) and company-sponsored plans such as 401(k)s can be effective vehicles for this. Try to set up a “rainy day fund” for emergencies. As your assets grow, consider working with a financial advisor who can help you be objective and divorce your emotions from your investment decisions. Avoid the “buy high and sell low” trap that too many people fall into.
At 45, don’t neglect the insurance considerations that can help protect your family against the unexpected. Disability insurance, life insurance, even long-term care insurance should be examined.
At 55, when most people are 10 or 15 years away from retirement, a detailed financial plan, revisited periodically to keep it on track, is an absolute must. And, if you’ve been disciplined about saving and investing along the way, then you’ll probably have a lot more flexibility in making that plan.
