Newport News, VA, July 11, 2017 (Newswire.com) - As America celebrates yet another year of independence, it faces an ever-growing epidemic of terrifying proportions, one that seems to question the very foundation of economic freedom for the future generations. According to 2016 statistics released by IRS, an average American household has an income of $74,000 while it owes $1,35,000 in debt.
The pervasion of the internet and social media has driven consumerism to an all-time high, leading to a new widespread culture where people don’t mind spending beyond their means for instant gratification. The average personal savings rate in the country stands at 5.5%. To put things in perspective, it has averaged 8.32% from 1959 to 2017, with a peak high of 17% in 1975 and a record low of 1.9% in 2005.
Former Wall Street banker Walid Soliman believes a lack of financial literacy is responsible for this. Soliman, therefore, holds free biweekly personal finance classes for recent college graduates in the city of Newport News in Virginia. “I believe these recent grads are the ones most affected by this issue since our colleges have failed to teach them how to manage their personal finances upon graduation.
The transition from college to the real world is steep, especially when the onus of money management shifts from the parents to these young adults. Millennials have a truly sobering default rate on student loans, and that’s just the tip of the iceberg. I aim to fill that gap of information and resources to provide them with the nous to survive, and eventually thrive, in today’s financial and economic environment. This includes practical advice as well as time-tested standard industry techniques that help them with issues pertaining to debt, credit scores, budgets, taxes and insurance to tighten their grip on the real world application of saving and investing concepts.”
Walid Soliman further explains how the knowledge of personal finance is crucial not just for the financial security of millennials, but also for their peace of mind. “We teach about dealing with all big life events, such as getting the first job, buying the first car, getting married, having babies, buying a home, saving for emergencies and retirement etc. Everyone wants to be a millionaire but no one wants to save their way to being one through smart personal finance strategies. We introduce a whole array of techniques to do just that and make sure these young adults don’t succumb to well-known pitfalls.
For instance, we teach how rapid lifestyle inflation manifests in the form of increased desires to buy more: a new car, a new apartment, or even a new phone. We teach how to mitigate this risk by adopting sound policies and habits that include spreading purchases over time, having a separate spending and savings accounts, and only spending a certain percentage of the monthly income.
We teach about the importance of distributing income based on certain ratios to cater to emergency funds, future goals, such as retirement, and other goals, such as traveling. We split these up into the post and pre-tax incomes. We also teach how to cater for inflation, negotiate a pay raise and utilize things like risk diversification, compound interest, credit unions and financial tools such as stocks, bonds, mutual funds, real estate, and Vanguard index funds. We encourage these young adults to build their credit history slowly but steadily, through the use of new accounts and timely payment of credit card debts.
One of the biggest areas where we feel we can make a big difference is by sharing knowledge of financial instruments for retirement savings, such as IRA, Roth IRA and 401(k). Stats reveal that only 18% of American adults contribute to an IRA, while the median 401(k) balance for adults aged 18-25 is a measly $1,385, and $8,363 for the age group 25-54. This came as a shock to us. Our goal is to make these young people know so they can financially navigate the highway called life!”
Walid Soliman’s first three classes received a huge amount of interest in the 5th most populated city in Virgina, home to many colleges. Alice Moore has seen some significant changes in her life from attending Soliman’s free classes. “One of the things he kept repeating was ‘time is money’! I always thought I didn’t need all this financial advice and stuff, that all I needed to do was just put my head down, work hard and things would happen for me. But Walid gave me a new perspective on things. I was doing great at my job so he managed to talk me into renegotiating my salary, and I got a 25% raise! He also pushed me to start investing more, and cut back on frivolous spending in the form of happy hours, expensive lunch orders or take out food.
Learning to cook has saved me so much and also made me new friends! I have just started on this journey, but the skills he has taught me will stay with me forever.” Soliman’s next class is scheduled for 30th July, a Sunday. He hopes this will allow more young college graduates to attend it, and take something out of it. For those who are struggling with their personal finances post graduation, Soliman’s free training sessions could make a world of difference. So hurry up and spread the word, we all need to do our bit to help our country’s youth take control of their lives and not be drowned in financial burden or stress.
Source: Walid Soliman
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