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A Commencement Address to the Class of 2011

Over the next few weeks, tens of thousands of young adults will put on a funny looking hat, walk across a stage and receive a college diploma. Bright-eyed, bushy-tailed and ready to take on the world, some of these graduates will move on to additional education. Some will take their first steps into full-time employment. Others will pause to take a look at life and try figure out what comes next.

Whichever boat you’re in (or your children, grandchildren, nieces or nephews are in), it’s never too early to start thinking about how you’ll advance your career and work toward the lifestyle and retirement you’ve always wanted. 

I have some years of experience on my side and hope to offer advice on things I’m glad I did, things I shouldn’t have done and things I wish I’d known to do.

Things I’m Glad I Did …
  • Get a job – I was lucky that my first job out of college was in the career I wanted. But if you can’t find your dream job, or even a great job, get something that will give you experience, get you paid and help you figure out what you like.
  • Start saving for retirement – It’s amazing to see how a small amount of money can grow, given enough time. And time will never be more on your side than it is when you’re fresh out of college. Need proof? Check out the graph below to see how you could save less but make more if you start early – or link to the full article on the Smart401k Education Center. Plus, if you were used to being poor in college, will you really notice if you save 5 or 10% of your salary? Your paycheck will still be bigger than anything you earned in high school and college.

Saving earlier could* have a big effect on your nest egg.

  • Continue my education – With additional education you can strengthen your specialization in a certain field or prepare yourself for the things you’ll do later in life – either way you win. Plus, it’s easier to go back to school while you’re still in “student mode” and before you have kids.
Things I Shouldn’t Have Done …
  • Worry about what friends are making – Some will make more, some will make less. Some degrees pay more and certain cities demand higher salaries. Some will also have to put in a lot more hours to earn that higher wage.
  • Wait to implement a budget – It’s easy to overspend when you start getting real paychecks. While I was saving for retirement, I was irresponsible about eating out and being impulsive. Once I set up a budget to see where my money was going, it was easy to pull back the reins, add to my savings and eat healthier meals.
If I Knew Then What I Know Now …
  • Don’t be afraid to move back home – I didn’t have this chance since my first job was in a different city, but moving back in with your parents doesn’t have to be the end of the world. It provides you with a great support network and allows you to rapidly pay down student loans and start saving. Have a plan for when you’ll move out. Pay your parents “rent” and have them save it to help with a future down payment when you move out.
  • Frugality can be overdone – My dad always said “You can’t take it with you when you’re gone.” The older I get the more I understand what he meant: Sure you need to plan for the future and save for retirement, but you also need to enjoy yourself now.
  • Your real education is just beginning – There’s no doubt you learned a lot in college, but there’s no substitute for real-world experience. Pay attention to your mentors and you’ll be amazed how much they can teach you.

Don’t forget to have fun. Life will always throw you curveballs; if you accept that they’re inevitable, things will be much easier to handle.

And if you need more insights, read through Mary Schmich’s 1997 Chicago Tribune column (Here’s a link) in which she wrote her own commencement address.

Congratulations class of 2011. You’ve earned it.

Joe McCulloch

Senior Investment Adviser

*Results are unpredictable, and past performance is not an indicator of future returns. The above graph illustrates an average 7% annual growth for these fictional investment accounts. Smart401k does not guarantee any rate of return on investment advice. Please note that the above example is for illustrative purposes only.

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About Smart401k

Smart401k is a web-based investment advisory service providing unbiased recommendations to help people invest in employer-sponsored retirement plans. Smart401k provides service to nearly 11,000 clients who collectively have more than $2 billion in assets. Plan participants receive personalized, fund-specific investment recommendations and the support of professional investment advisers available to discuss all investment questions. Based in Overland Park, KS, Smart401k is online at