Finance
Financial Planning for Young Professionals: Getting Started Right
You’re young and getting started with your career. You’re eager and all looks bright, but there’s one thing constantly on your mind: your finances.
How do you get started and get the ball rolling in the right direction? Thankfully, experts are here to guide the way.
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“The first and most important step for any young professional is to establish a clear, realistic budget that aligns with both their current lifestyle and long-term financial goals,” said Justin Godur, finance advisor and founder of Capital Max. “It might sound basic, but this is the foundation upon which all other financial strategies are built.”
Without a solid understanding of your cash flow and knowing exactly where every dollar is going, he said it’s impossible to make informed decisions about saving, investing or managing debt. “I’ve seen too many talented individuals fall into the trap of living paycheck to paycheck simply because they lacked this basic financial discipline.”
Below, experts give a rundown of how you should get started when it comes to financial planning. Young professionals can use these steps to lay down solid groundwork for enduring monetary triumphs.
Earning passive income doesn’t need to be difficult. You can start this week.
Prepare a Comprehensive Budget
According to almost every money expert, preparing a detailed budget is the first step to take.
“Solid planning is critical for young professionals who want to achieve long-term financial success,” said Dayten Rynsburger, CRO at Niche Capital CO. “You can figure out areas where you need to cut your spending by knowing how much money enters and leaves your pocket.”
This process lays the foundation for future financial goals.
“But a budget isn’t just about cutting back on expenses,” Godur added. “It’s about prioritizing your spending in a way that reflects your values and future aspirations.”
For instance, he noted that if your goal is to retire early, it makes sense to allocate more towards your retirement accounts now, even if it means sacrificing some short-term pleasures. This conscious alignment of spending with goals is what sets apart those who achieve financial independence from those who don’t.
“In my experience, the young professionals who take the time to meticulously plan their budget early on are the ones who ultimately achieve financial security and freedom,” Godur explained. “It’s a simple but powerful step that lays the groundwork for every other financial decision you’ll make in your career.”
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Build an Emergency Fund
According to Rynsburger, you can rule out any possible emergencies with an emergency fund that covers your expenses for three to six months’ worth of expenses.
“Such funds keep away from draining savings, preventing dropping plans away which are not meant for long term purposes,” he said.
Get Started on Investing ASAP
Experts agree that you should consider making investments as soon as you possibly can.
“The earlier in life you start working towards it, the more compound interest benefits you’ll reap later on in life,” said Rynsburger. “Buy into inexpensive index funds or retirement accounts like IRAs or 401(k)s so that your finances would be continuously increasing.”
Articulate Logical Monetary Objectives
Set short-term and long-term monetary objectives, advised Rynsburger. “Setting specific goals provides you motivation and enables prudent financial judgments. Whether it is about acquiring a home or saving for retirement.”
Request Professional Advice
A personalized financial plan can be made by approaching a financial consultant. “The expert is in position to provide customized ideas and assist in making difficult money choices,” said Rynsburger.
Practice ‘Target Spending’
“The one skill I’d want any young professional to master to set themselves up for success is practicing expected spending, not restriction,” said Hanna Morrell, a holistic, trauma-informed financial coach who teaches her clients how to trust themselves with money.
Restriction is thought of as an easy first step to take to achieve financial goals. The result of restriction, however, is often rebellion and failure. “So I teach and recommend that instead of restricting spending, people practice expected, thoughtful, intentional spending,” Morrell said.
While this is a bigger concept, she teaches it with a pretty simple game called “Target Spending.” Here’s how to incorporate it into your financial planning:
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Step 1: Choose a small, variable part of your spending. Some good examples are: coffee, ice cream, clothes, eating out, gifts for the kids or holiday decorations. Some not-so-good examples are mortgage payments or utilities.
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Step 2: Choose a fairly short time frame: Between two days and two weeks.
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Step 3: Choose a specific dollar amount. For example, “I’m going to spend $17 on ice cream in the next 10 days.” Or, “We’re going to spend exactly $42 on towels in the next 2 weeks.” Not so good example: “I’m only going to spend $10 on pencils tomorrow.” (This is a restriction.)
Gameplay:
According to Morrell, your job is now to spend EXACTLY that amount of money in that time. No more. No less.
“We want this to remain a game, not a budget, so that’s why we’re keeping the time frame and scope of spending fairly tight,” she explained. “And this is just a game. So if you spend more or less, does that matter? Nope, because this is just a game.”
She continued, “You are now practicing expected spending. That $17 — or whatever amount you choose — has a specific job to do. As you play this game what do you think you might notice? Do you think it will be easy or hard to spend exactly that amount on that specific thing in that specific amount of time?”
There is a dual purpose to this game, Morrell highlighted.
“First, it’s to practice expected spending rather than restricted spending. The second is to begin to trust yourself with money. Let’s test this out. Which statement is restricted spending, and which is expected spending?
Our brains do not make good choices under the influence of restriction, Morrell explained. “Restriction is emotional and reactive. Expected spending, on the other hand, allows us to practice thoughtfulness.”
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This article originally appeared on GOBankingRates.com: Financial Planning for Young Professionals: Getting Started Right
Sometimes your best just isn’t good enough. That’s the lesson Nvidia (NVDA) learned Wednesday after the company’s stock price fell 3% despite posting better-than-expected second quarter earnings and guidance for the third quarter.
It’s not as though the company’s growth was unimpressive, either. Revenue jumped 122% year over year to $30 billion, up from $13.5 billion. Nvidia’s all-important data center revenue topped out at $26.3 billion, a 154% year-over-year increase.
But that wasn’t the kind of blowout that investors have quickly grown accustomed to over the last few quarters.
Beyond investor sentiment, Wall Street analysts have also seemingly caught on to Nvidia’s growth after several quarters of big surprises to the upside.
Nvidia’s revenue reported Wednesday beat Wall Street expectations by 4.1%, the slimmest margin since the fourth quarter of its 2023 fiscal year.
As Nvidia’s business has boomed over the last two years, the company’s revenue topped Wall Street forecasts by double-digit percentage points for three straight quarters, including a 22% difference in its fiscal second quarter of 2024.
And as Wall Street appears to have gotten a better feel for Nvidia’s growth at this point in the AI investment cycle, questions have also arisen about the status of Nvidia’s next-generation Blackwell chip.
Ahead of the company’s earnings announcement, the Information reported that the chip, the follow-up to Nvidia’s Hopper line, faced delays that could impact some of the company’s biggest customers including Microsoft and Google.
In her quarterly comments, Nvidia CFO Colette Kress explained that the company made changes to Blackwell to improve its production yield. CEO Jensen Huang, meanwhile, said that the chip is currently being sampled to customers, a major step toward shipping the processor at volume.
Huang said the company expects to ship several billion dollars of Blackwell revenue in the fourth quarter. But the CEO couldn’t pin down exactly how much revenue Blackwell would generate, despite analysts’ questions.
Huang, however, did provide a number of other strong points for Nvidia, including pointing out that demand for Blackwell platforms is well above supply. The CEO also said that Nvidia’s Hopper platform will continue to grow in the second half of the year, and explained that the company expects its data center business to grow “quite significantly next year.”
Huang also said that AI inferencing is driving the company’s data center revenue. Inferencing refers to computers running AI programs and providing users with answers to their queries.
That should put to rest fears of threats to Nvidia’s long-term growth as companies pivot from training AI models to using inference. Huang appears to believe that Nvidia will continue to plow forward as customers use its chips to both train and run their AI models.
Nvidia is still the world leader in AI chips, and it’ll be some time before rivals AMD (AMD) and Intel (INTC) catch up to its hardware and software lead. And while Nvidia may be facing a near-term decline in its stock price, Wall Street is still on board.
In an investor note released following Nvidia’s earnings, BofA’s Vivek Arya raised his price target on the chip designer to $165 from $150 per share, writing, “Despite the quarterly noise, we continue to believe in [Nvidia’s] unique growth opportunity, execution and dominant 80%+ share as generative AI deployments are still in their first 1-1.5 [years] of what is at least a 3 to 4-year upfront investment cycle.”
Raymond James’s Srini Pajjuri also raised the firm’s price target on Nvidia’s stock from $120 to $140, writing in an investor note that “Blackwell delays appear better than feared and management is forecasting a strong ramp in FQ4.”
Pajjuri also said demand for Nvidia’s current-generation Hopper chip continues to be healthy and pointed to anticipated sales growth in Q4, despite Blackwell production ramping up at the same time.
Morgan Stanley’s Joseph Moore, who raised his price target for Nvidia from $144 to $150, called out Nvidia’s sky-high expectations with regards to the company’s stock moves after the earnings report.
“Expectations become more challenging as the superlative becomes mundane, but this was still a very strong quarter given the transitional nature of the current environment.”
Whether that’s enough to satisfy investors next quarter remains to be seen.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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One Nvidia (NVDA) bear warned the time has come for investors to sell.
Nvidia failed to meet sky-high expectations when it reported its fiscal second quarter earnings on Wednesday. Nvidia reported profits and revenue that topped forecasts but not by as much as investors hoped, delivering its smallest earnings beat in the last six quarters.
Nvidia stock fell 6% on Wednesday evening in reaction to the results and continued to slide 4% lower on Thursday afternoon. Year to date, the stock remains up nearly 140%.
When asked when it might be time to sell, David Bahnsen, chief investment officer of Bahnsen Group, said, “About a month ago. Two months ago. Today. Tomorrow.”
“People are paying for perfection,” Bahnsen added (video above). “You’re buying Nvidia banking on there being another investor who’s a bigger sucker than you are.”
The warning from Bahnsen comes as the stock has rallied 1,000% from its October 2022 lows. His call is based on one data point: Nvidia’s price-to-earnings ratio, which sits just above 56 after earnings but neared 80 in July.
He offered a reminder that a company and its stock are not the same thing.
“This is not me bashing on Nvidia,” Bahnsen said. “This is a success story. I’m commenting on the valuation — that when you start paying those prices, the risk-reward skew becomes very unattractive.”
Still, it’s a risk that the 89% of analysts with a Buy rating on the stock are willing to take. The stock has zero Sell ratings, which is understandable considering Nvidia posted $30 billion in revenue in the second quarter, a 122% increase over the same period last year.
Nvidia’s future depends in part on other Big Tech companies. Hyperscalers Microsoft (MSFT), Meta (META), Alphabet (GOOG, GOOGL), and Amazon (AMZN) are responsible for 40% of Nvidia’s revenue, according to Bloomberg estimates.
Alphabet CEO Sundar Pichai indicated on the company’s earnings call this quarter that the company’s spending on artificial intelligence would not slow down. “The one way I think about it is when you go through a curve like this, the risk of underinvesting is dramatically greater than the risk of overinvesting for us,” Pichai said.
Alphabet’s investment in AI, which represents a significant portion of Nvidia’s revenue, could be a bullish signal to come. But those business fundamentals aren’t the only focus.
“The estimates for next year and the year after that are starting to get way, way out of control,” D.A. Davidson managing director Gil Luria told Yahoo Finance.
The next big question for investors is whether the Street’s reaction to Nvidia results this quarter will be enough to dampen earnings expectations heading into Q3.
For Bahnsen, it may already be too late.
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Finance
Air Lease Corporation Executive Chairman to Speak at Deutsche Bank Aircraft Finance & Leasing Conference
LOS ANGELES, August 29, 2024–(BUSINESS WIRE)–Air Lease Corporation (NYSE: AL) announced today that Steven F. Udvar-Házy, Executive Chairman, will be presenting at the Deutsche Bank 14th Annual Aircraft Finance & Leasing Conference in New York City on Wednesday, September 4th at 1:30pm Eastern Time. The presentation will be broadcast live through a link on the Investors page of the Air Lease Corporation website at www.airleasecorp.com. Alternatively, virtual attendees may access the webcast directly via this link: Deutsche Bank 14th Annual Finance & Leasing Conference. Please visit the website prior to the webcast to register, download and install any necessary audio software. Any materials utilized for this speaking engagement will be posted in advance of the presentation time to the Investors section of the ALC website at www.airleasecorp.com.
About Air Lease Corporation (NYSE: AL)
Air Lease Corporation is a leading global aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. ALC and its team of dedicated and experienced professionals are principally engaged in purchasing new commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. The company routinely posts information that may be important to investors in the “Investors” section of its website at www.airleasecorp.com. Investors and potential investors are encouraged to consult Air Lease Corporation’s website regularly for important information. The information contained on, or that may be accessed through, ALC’s website is not incorporated by reference into, and is not a part of, this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240828943676/en/
Contacts
Investors:
Jason Arnold
Vice President, Investor Relations
Email: investors@airleasecorp.com
Media:
Laura Woeste
Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com
Ashley Arnold
Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com
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