There are some memories in life that are as clear as yesterday afternoon, and some that fade so quickly that I struggle to remember any details. The memory of my first job out of college is one of those memories that is as clear in mind as yesterday morning. I remember walking to my car that morning, driving in from my new apartment, dressed in new business cloths and ready for work with the feeling of excitement combined with anxiety.
I was required to report to human resources first, where I would receive my “orientation” of my new career and the company policies, benefits, and general information that most large corporations go through for new employees.
As I think back now, much of the orientation is a blur and I don’t remember a thing they told me. But what I do remember is some of the best financial advice I’ve ever received…. yet sadly ignored.
The Best Financial Advice I Ever Received
After orientation I remember my “one on one” with the HR manager. He was a tall black man with a white crisp dress shirt and shaved head, probably in his early forties at the time. I don’t remember his name, but I remember clearly his kindness and character in how he treated me. (funny how we remember certain interactions in life…)
To be honest, I was somewhat struck by his authenticity in his desire to see me do well, not just at my job – but financially as well. I have never come across a person that engaged me personally that way in such a short amount of time, with a general desire to see me succeed in life. It’s unfortunate that I never got an opportunity to talk to him again after that day.
What he told me has stuck with me for many years, even though I never took his advice that day. His advice was simple, yet powerful – and it is my advice to any new college graduate taking a new job. What he said went something like this…
“Jason, today is your first day at work and you will most likely work for the next 40 years. This is a copy of the company’s 401k plan. I highly recommend you max out your retirement contribution on your first day and learn to live on the rest of your paycheck. It is much easier to take this step now, instead of 10 years from now. Take this step now, and you will be set for retirement.”
As I said earlier, I didn’t take his sound advice but instead went on with life thinking I knew better and would do ok. (Yes, I was dumb) I did end up saving for retirement, and in many ways have done just fine over the last 12 years, but I can only image what my retirement balance would be if I had taken his advice on the first day of work.
My Financial Advice for New Graduates
Little did I know on that day 12 years ago I received some of the best financial advice I ever heard. It is the same advice I give out to you today, no matter where you are in your career – but especially if you are just out of school.
The best time to max out your retirement is when you start your first job. This is because you have yet to live on a normal paycheck (at least most college grads have not) and can adjust your life immediately to the income you are receiving after saving.
Unfortunately, this is extremely difficult to do once you begin setting up your standard of living and get used to that standard. It’s not impossible, it’s just difficult. If you throw marriage and kids into the mix, it is near impossible to adjust your standard of living significantly – as we all know that life is financially demanding.
So, in many ways maxing out your retirement on the first day of work is the simplest way I know to set yourself up for significant financial reward in the future. If you take this simple step and invest your retirement savings wisely – you should do just fine when you leave the workplace to start your next phase in life.
Ask the Readers
Readers, what is your advice for new college graduates? Is there a time in your life, like me, where you received amazing financial advice and took it (or ignored it)? Please comment below…