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5 tips for saving and investing from top millennial wealth manager

5 tips for saving and investing from top millennial wealth manager
  • Seth Haye helps oversee $1.2 billion for Morgan Stanley Wealth Management, and Forbes just named him the best next-generation wealth manager in the US.
  • Haye gave Business Insider the tips he gives to younger clients, which are themed around finding ways to manage their spending and maximize their investing long-term.
  • He reminds clients to focus on what they can control and try to enjoy the process of living out their plans.
  • Click here for more BI Prime stories.

Even the oldest millennials are far from their retirement years, and they may face big obstacles before they get there.

A sense of humor might help, but ideas from millennials who are thriving in the financial industry may help more. One of those is Seth Haye, who helps manage $1.2 billion for the Oaks Group within Morgan Stanley Wealth Management.

Forbes dubbed Haye the best millennial wealth adviser in the US in 2019, and he has ranked high on similar lists for the past three years.

In an exclusive interview with Business Insider, Haye said he always tried to impart these ideas to younger investors to help them decide what they want, and get ahead so they can fulfill those plans.

1. Live beneath your means

Haye feels that a lot of people take a backward approach to spending, figuring out how much they can afford to devote to necessities like a home and a car and luxury items based on how much income they’re pulling in, he said. He warns younger clients in particular not to spend that way. 

“You’ve got to be willing to adjust your cost of living early in life,” he said. “Once you get used to the nicer things, it’s really tough to go to the things that aren’t so nice.”

2. Prioritize, then plan

Haye tells clients to decide what’s most important in life, not just financially but also in personal and career terms. Only after they’ve figured out what they need can they craft a plan to achieve it.

For many of his younger clients, that first priority is saving up for a house. Broadly, Haye says a home is a worthwhile investment, even though the returns generally aren’t huge. That’s because the leverage buyers take on in the form of mortgage debt greatly improves their returns.

Retirement planning tends to be high on the list as well, and Haye urges clients to start saving as early as they’re able so they can benefit as much as possible as their returns compound over the years.

Read more: A JPMorgan heavyweight who advises a $1.7 trillion business breaks down the perfect blend of international investment for the next 5 years — which he says will guard against a recession

3. Make investing a game

Haye recommends creating a new goal every year and trying to meet and then exceed it, and to treat that habit as something enjoyable instead of a chore. That makes it much easier to stick to a long-term plan.

He emphasizes that they should focus on the process of saving and investing and not just target a specific dollar amount in their investment accounts — because the market will have more control over that number than they do.

4. Don’t sweat over asset allocation

Investing strategy involves a lot of details and fine-tuning to maximize returns. In Haye’s telling, younger investors should make a point of not getting lost in the weeds. The most important thing is to continue to save and invest as early as they’re able.

“Don’t get too hung up on the asset allocation and the individual stock selection,” he said. “That should be secondary to … your ability to make these contributions each year early in your career, and dollar cost average into the market, and that’s going to take away some of the general market risk.”

5. Be excited for bad news

Since saving and investing is the goal, Haye tells his clients they shouldn’t worry about market sell-offs. In his telling, by maximizing their retirement investments early on, their dollar cost averaging into the market early on, and a downturn early in their career, could mean bigger returns later.

“I try to get them to be excited for corrections and bear markets and recessions because that is usually where the real money is made,” he said. “You’re going to have the opportunity, especially if you’re really early in your career, to double the contributions to your portfolio or triple the contributions to your portfolio, and to buy many more shares while the market is cheap.”

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