Reviews and Comments
(1) April 9, 2009 - Interview in the Montclair Times, the local newspaper
Financial Security and How to Achieve It
(by Lindsey Kelleher - April 09, 2009)
Saving early, saving often and saving as much as one can is key to establishing financial security, advises Donald Young, Montclair resident and author of the new book "You Can Do It."
Young, who worked in the institutional investment management business for many years, wrote the book as a way of giving his financial knowledge back to the community. "You Can Do It," published by iUniverse, offers a step-by-step guide to taking charge of one's financial situation and increasing personal net worth.
Some steps to take toward becoming more financially stable include creating a budget, investing in tax-deferred vehicles, paying expenses with a credit card and paying bills electronically and on time.
"Everything in this book is something you can do on your own," Young said. "That's comforting because it puts the responsibility squarely where it should be, which is on you ... so if you take responsibility you'll be in a much better position for the rest of your life than you are now."
The first step is to create a budget, Young said. Creating a budget will help you become more educated about your financial situation, which will help determine your income and your necessary and discretionary expenses. Figuring out these expenses will then help in determining how much to save in a given period.
"In a budget, you have to make sure you are saving," Young said. "You need to save something from day one even if you don't have a lot of money."
In addition to a budget, Young advises readers to create a cash flow management process which allows them to keep track of their money as it comes from different sources. According to the book, this cash flow management process also serves to help people pay bills on time, remember bills that are already paid, distinguish between bills that are the same every month and get a safe and competitive return on any idle cash that may be available.
Young suggests that people keep their cash flow management system on autopilot, which means there should be as little personal intervention as possible, and stick to a yearly budget without making any changes to it. He advised to change the budget only if circumstances change, for example, when there is an illness or a salary increase.
Young writes that investing in a target-date fund is an important step toward ensuring a comfortable retirement. One advantage to investing in a target-date fund, is that the fund sets an initial asset allocation. The exposure to stocks is reduced and the bond exposure is increased as you get closer to the target date. Finally, your tolerance for risk goes down.
"Investing in more stocks than bonds will give you the maximum return from a portfolio of stocks and bonds that you can get anywhere and in anything that you do," Young said.
Young hopes to teach at the Adult School of Montclair and host local book signings. His first book signing is scheduled for April 21, at Cornell University, where he earned his bachelor's degree in economics. He also earned a master's degree from the Harvard Business School.
The most challenging part of writing the book, Young said, was explaining things in an easy-to-understand format for people who lack financial knowledge.
"There is some urgency to read the book or at least parts of it and implement [the steps into one's everyday life] because every year that goes by that you don't do that, you're disadvantaging yourself," Young said.
"The clock is ticking," he added.
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