in consumer applications for financial services
The first decade of adulthood is a flurry of foundation-building activities, including starting your career, building a family and establishing the assets you'll eventually rely on in retirement. Unfortunately, saving for a future 40+ years away usually isn't top of mind for most 20-somethings. Investing often falls low on the list of priorities, with many young adults assuming they've got plenty of time to establish and contribute to retirement accounts. While it's true time is on your side in your 20s, getting an early start on your financial future can put you well ahead of the game. Although it may seem overwhelming, there are ways to wade into the investing pool without diving directly into the deep end. For example:
Maximize Your Contributions
Experts say 20 percent of your income should go toward savings and investments. While your income may not be at its peak in your 20s, you likely have fewer demands on your resources (like paying for a mortgage and your kid's college tuition) and can better leverage whatever salary you're earning. One of the easiest ways to get started is by taking advantage of your employer's 401(k) match. Many companies help you save for retirement by offering matching contributions to your 401(k) investing account, usually $.50 for each $1.00 you save, up to a specific percentage. At this stage, you should at least pony up enough of your own dough to earn the full employer match - otherwise, you're leaving free money on the table.
Automate the Investing Process
With all the burgeoning responsibilities of your post-graduation years, managing your investments is one that can easily slip your mind. By putting your investment activities on autopilot, you can free your time for other tasks without neglecting your financial future. A robo-advisor can provide many of the benefits of an in-person investment advisor at a much lower cost. And since you're not involved in the day-to-day management of your account, you can avoid getting spooked and making unwarranted and emotional changes to your account based on natural market fluctuations. (However, you'll still need to examine your accounts at least annually to make sure you're on track to reach your goals.) Make it even easier on yourself by opting for automatic increases to your investing accounts. As your salary rises, you can automatically save more without noticing a big impact to your paycheck - it's a win-win!
Achieve Built-in Diversification
You don't have to be an investing guru to have a well-balanced portfolio. Diversified investment vehicles such as index and target-date funds are designed as micro-representations of the entire financial market, piecing together stocks and bonds from different sectors and risk levels without requiring you to select each fund separately. This can help de-clutter your portfolio and provide for even more automation during these early investing years, as a target-date fund will automatically adjust its risk level as you get closer to retirement. Keep an eye on costs such as trading and maintenance fees; the expense ratio should be no higher than roughly 0.5 percent.
Remember, Every Little Bit Helps
Putting a few dollars here and there into an investing account may not seem significant, but those little cash injections can go a long way over time. If you put just $4 into a jar every day - the cost of your morning latte - you'll have more than $100 to invest every month without really trying. And with many online brokerages offering low account minimums (or no minimums at all), you can pretty much start investing with the coins under your couch cushions.
Use Time to Your Advantage
Time is not a renewable resource, and your future self will thank you for every penny you put toward investing while you're in your 20s. By starting early, you can build yourself a hefty nest egg to help pay for the retirement lifestyle you want. It can be difficult to truly appreciate the value of those funds 40 or 50 years from now, but some simple math may make it easier: If a 25-year-old invests $100 per month and achieves a modest 6-percent rate of return, they will have accumulated $185,700 by age 65. Waiting until 35 to start investing cuts that amount to $94,800, a difference of $90,900. That's no chump change!
All too often, 20-somethings keep their money in safe, easily liquidable investments, such as certificates of deposit and money market accounts. While you might be wary of the financial markets following the ups-and-downs of the last several years, these conservative investment choices could be harmful to your future. Why? Because the lower rate of return usually doesn't keep up with inflation over the long run. That means you'll eventually end up with an investment that's not much more valuable than it would be had you stashed your cash in a shoebox at home. Opening yourself to more risk, such as equities, will drive the growth you need to build long-term wealth. Plus, your age means you'll have the opportunity to recoup any losses you may experience.
Now's the Time
Your 20s are a time of learning and growth that set the stage for the rest of your life. These years are a once-in-a-lifetime chance to leverage time, opportunity and the power of compounding interest to create a comfortable financial future. What are you waiting for?
Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content
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Goldman Sachs-backed Even Financial, a digital matchmaker between banks and customers, just bought an insurance startup as life insurers are seeing policy applications boom
Even Financial has acquired LeapLife, a leading insurtech platform. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Business Insider wrote an article about it, interviewing our CEO and Founder Phill Rosen.
Even Financial Launches Insurance Offerings With Strategic Acquisition of LeapLife, a Leading Insurtech Platform
Pioneering B2B Fintech Expands its Industry-Leading Financial Services Monetization Platform to Help Insurance Carriers Find and Connect with Consumers New York, New York – April 22, 2020 – Even Financial (Even), the leading API for financial services search, acquisition, and monetization, announced today that it will be launching services for the insurance industry through the acquisition of LeapLife, an insurtech platform and digital life insurance agency. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Even and LeapLife now offer the only full end-to-end, multi-carrier digital life insurance marketplace experience. Over the coming weeks, Even will further integrate LeapLife’s technology and insurance offering into its industry-leading API, making turnkey insurance marketplaces programmatically available to a vast network of channel partners — when and where their consumers are most in need — while also enabling the company to expand to other insurance sectors, including homeowners, renters and auto insurance. This adds to Even’s peerless breadth of real-time, personalized financial product offers — an expansive suite that already includes loans, savings, credit cards, and more. “Even’s goal to evolve how financial institutions find and connect with consumers is not limited to loans or credit cards, but applicable to all financial products and services, including insurance,” said Phill Rosen, Even Founder and CEO. “Despite its importance, purchasing life insurance is often an overwhelming and inconvenient experience. With more than $600 billion in premiums paid each year, and only 6% of policies sold completely online, we see tremendous opportunities to help modernize the life insurance industry and offer solutions that solve challenges for consumers and carriers alike.” LeapLife is an established insurtech platform and digital life insurance agency that utilizes data science, deep underwriting knowledge, and proprietary technology, enabling consumers to apply for instant-decision life insurance policies with real-time quotes. LeapLife works with many best-in-class insurance carriers to offer consumers a seamless experience from beginning to end. This approach made Even and Leaplife a perfect match. As a digital insurance broker, LeapLife offers personalized life insurance recommendations based on a consumer’s unique needs. Paired with the Even API, which enables customer acquisition for insurance to be native and programmatic, consumers benefit from a more streamlined, transparent, and highly personalized experience when shopping for life insurance. Just as Even’s 2018 acquisition of Birch (the award-winning credit card rewards app) allowed the company to accelerate its expansion into credit cards, the addition of LeapLife will similarly put Even at the forefront of consumer insurance offerings. Charles Svirk of MassMutual Ventures, an investor in Even, said “The Even and LeapLife teams share a vision that the future of insurance acquisition will rely on the power of data-driven, programmatic distribution. We are thrilled to support them as their industry experience, impressive technology, and trusted relationships will help scale Even’s insurance offering and build partnerships to provide these critical innovations in insurance acquisition.” The Even API and platform solve significant, long-standing pain points in financial services acquisition by seamlessly connecting supply and demand. Even has continued its rapid growth trajectory in 2020, surpassing over $1.5 billion in credit issued through its API and expanding its platform to over 400 partners. Even has secured over $55 million in funding from major financial institutions, venture capital firms, and fintechs to back its goal to evolve the financial services acquisition ecosystem. About Even Financial Founded in 2015, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. By seamlessly bridging financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as TransUnion and The Penny Hoarder) via its industry-leading API, Even turns any consumer touchpoint into an ROI-driven, fully customizable, programmatic acquisition source for financial product offers with full compliance, security, and scale across loans, savings, credit cards, insurance, and more. Even is backed by leading financial services firms and VCs including American Express Ventures, Canaan Partners, Citi Ventures, F-Prime Capital (Fidelity), Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Even is the leading search, comparison, and recommendation engine for financial services. Media Contact: firstname.lastname@example.org
Even CEO/Founder Phill Rosen quoted in Protocol Braintrust Newsletter
Our CEO and Founder Phillip Rosen was included in the most recent Protocol Braintrust newsletter along with answers from some thought leaders from Plaid, Slack, and DuckDuckGo!