It’s 2022 and with the start of the new year, so many people have new goals and resolutions. We always hear about fitness resolutions – and eating healthier – but what about financial resolutions and saving more money this year?
Mannik Dhillon, president of Victory Capital Solutions at Victory Capital Management, joined Leading SA to discuss what you should think about when setting new financial goals for 2022.
“It’s time for the new New Year and new resolutions and new beginnings, and it’s a great time to set an on your calendar to say, take a look at what’s going on financially in your life,” Dhillon said.
Dhillon said everyone’s budget and plan are different, and there are a lot of unexpected obstacles that may cause you to make a change.
“Did you achieve everything you set out to last year, whether that was from a saving, investing or budgeting perspective? You know, things might be different. People might be trying to save for a house. Maybe they had a baby and they want to figure out how to save for their college education. So it’s a great time of year to do that,” Dhillon said.
There are easy ways to evaluate your plan and think ahead, he said.
“First and foremost, make a budget, review a budget. So take a look at the last year. Did you spend money in the places you thought? Maybe things came up that were surprises. And I always like to tell people, don’t forget to pay yourself in that budget. You know, oftentimes we sit down and we look at all the places that our money goes. There isn’t a line item for ourselves in terms of savings and investing. And that’s really then the second thing save for a rainy day. We know unexpected things happen. We just went through a terrible pandemic, save for a rainy day, have enough expenses off to the side and then invest for the future, not only yours but also your children’s,” Dhillon said.
Dhillon said you don’t need a set number to start saving or investing in the future.
“You don’t need a lot of money to get started. That’s, I think, one of the things that people don’t understand. You know, we have clients that call us every day to start an automatic investment plan, always on $50 a month. And that’s it. That’s something that is achievable for most folks, and they can take advantage of the compounding the market offers as well as they don’t have to try to time the market that way. It’s a great time to look at your existing portfolio as well, like your 401K plan, your retirement plans, and then don’t forget the kids. Those education savings plans are a great way, and you know, nowadays you can use them for more than college. You can use them for high school, middle school and elementary,” Dhillon said.
He added that it’s important to understand your means and your goals.
“Make sure you’re investing and you’re investing enough to meet those goals you have. Take a look. It’s like I said those retirement plans as contributions and what you’re setting aside. And then the next thing is, are you diversified appropriately? And what that really means is, do you have the right mix of different assets so this can be bonds, could be stocks, could be real estate and other things, commodities and don’t try to time market swings,” Dhillon said.
Inflation, interest rates, and the consumer price index have been the talk of the financial world, but Dhillon said you should try and perfectly time the market.
“There’s going to be a lot of focus on interest rates and inflation like we’ve already heard about. And those aren’t just things that Wall Street needs to worry about. They’re going to impact everyday life for everybody. And so it never hurts to seek out an expert to discuss ideas,” Dhillon said.
Dhillon also discussed investing in cryptocurrencies.
“It’s definitely an interesting new space. You know, the underlying technology behind it has the potential to be quite disruptive for all things we deal with in everyday life. You know, it is appropriate for some people, you know, but they have to step back and think about, Can I handle the volatility? Can I? When should I allocate? Which one should I allocate to?” Dhillon said. “You know, it’s never a good idea to have all of your portfolio in something as volatile. So I think it’s something people have to step back and take a look at back to. What are my goals? What am I trying to achieve? And does an asset class like that fit into it?”
You can watch the full interview with Dhillon in the video player above.