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7 Finance Tips for Young People From a Financial Advisor

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When you get your first real paycheck after college, it feels for an instant like you have all the money in the world. But between student loans, rent, utilities, groceries, and a social life, it doesn’t take long for those funds to vanish from your bank account.

It’s normal for young adults to feel lost when it comes to money matters, but now’s the best time to form those smart habits that’ll last throughout your lifetime. mental_floss spoke with a financial planning professional about the best ways for young adults to navigate their newfound financial independence. 

1. START SAVING FOR RETIREMENT NOW.

It’s hard to imagine reaching retirement age when you’ve just started your career—most young people don’t know what they’ll be doing next weekend, let alone 40 years from now—but the sooner you start planning, the better off you’ll be. “When I talk to people even in their late 20s and early 30s, the first thing they’ll say is, ‘We should have been saving for years,’” says Scott Stencler, vice president of Wealth Advisory Services in Doylestown, Pennsylvania. “That’s everyone’s biggest regret.”

Not everyone just starting out can afford to put $100 of every paycheck into savings, but according to Stencler, what’s important is not how much you’re saving but that you’re saving at all. “Think of it like a bill,” he said. “Even if you’re putting $25 a month away, do it automatically out of your paycheck so it’s like forced savings.”

2. CHOOSE THE RIGHT HEALTH PLAN FOR YOU.

When you can stay out drinking until 3 a.m. and still feel fine the next day, it’s easy to feel invincible. That doesn’t mean you shouldn’t be covered in case the unexpected should occur. Stencler recommends choosing a healthcare plan that works well with your budget and fits your specific needs. “You have a plan in case something happens— you break a leg, you are in an accident,” he says. “So sometimes having the Cadillac of plans and paying for it when you barely use it is not always to the best of your advantage.”

Under the Affordable Care Act, young adults are eligible to stay on their parents’ plan until age 26, but even if your parents are cool with it that doesn’t necessarily make it the smartest option. “[These young people] are paying more than what they really need to, so sometimes going on their own plan and having that reduced price-wise isn’t so bad,” Stencler says.

3. REVIEW YOUR BENEFITS PACKAGE.

It’s hard to find the time to review your benefits amidst the chaos of starting a new job. Many companies offer their employees a whole lot more than just health, dental, and a 401(k), and if you’re not taking the time to look over those smaller benefits as well you’re passing up free money. “A lot of times we get this nice little booklet and that gets thrown in the corner and you don’t realize all the great benefits that are in there,” says Stencler.

Some businesses have agreements with gyms, cell phone providers, and cable companies that allow their employees to receive automatic discounts. Benefits like reimbursement for parking or commuting expenses are also included in most comprehensive packages. And if you’re feeling overwhelmed by the pages and pages of information, don’t be afraid to reach out to your HR department—that’s what they’re there for.

4. BUILD AN EMERGENCY FUND.

If you’re working at a low-paying job in an expensive city, living paycheck-to-paycheck may feel like your only option. But if you should ever lose your job unexpectedly, it’s vital to have a security net that will last you until you get back on your feet. Having enough in savings to cover you for six months to a year is ideal, but Stencler realizes this isn’t something everyone can achieve right away. “It’s not something you can expect someone to do in a month or two,” he says. “It does take time to do it and that’s a goal to work towards.” Getting laid off is just one complication you should be prepared for—theft, emergency repairs, or injuries that keep you from working are all situations in which it’s good to have a little extra in the bank. 

5. START BUILDING CREDIT.

Even if you don’t necessarily need a credit card, it’s important to start using one early on. “Sometimes the worst thing we can do is pay for everything with cash or right out of our checking accounts and never show any type of credit history,” Stencler says. “You’re making good income, you’re paying your bills on time, but nobody knows.”

By using a low-limit credit card to pay for minor expenses and paying it off at the end of each month, you’re showing banks that you’re using that credit responsibly. That good credit history will come in handy when you need to take out a loan later in life.

6. MANAGE YOUR STUDENT DEBT.

One huge financial burden many young people face right out of college is student debt. If you have multiple loans to pay off it’s easy feel overwhelmed, but doing some quick research can make tackling those bills (relatively) painless. Stencler recommends looking into which of your loans have the highest interest rates and taking care of those first. “A lot of people will pay off a smaller loan first thinking they can knock that out, but the interest rate may be lower,” he says. It may also be worth seeing if you can consolidate your loans into one bill at one low interest rate.

7. AVOID GETTING INTO MORE DEBT.

You may not be able to escape the debt you’ve already accumulated, but you can prevent yourself from digging the hole any deeper. The simplest way to do this is to avoid spending money you don’t have and stay one step ahead of any bills you’re paying. “Debt is a major factor that really cripples young people,” says Stencler. “The biggest thing with any debt, whether it’s credit card debt, or car loan payments, is once you get behind it’s very hard to catch up.”

Young adults have enough to worry about: Don’t let avoidable financial woes add even more stress to your life.

This material is for general information only and not intended to provide specific advice or recommendation for any individual.

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Man Buys Two Metric Tons of LEGO Bricks; Sorts Them Via Machine Learning
May 21, 2017
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iStock // Ekaterina Minaeva

Jacques Mattheij made a small, but awesome, mistake. He went on eBay one evening and bid on a bunch of bulk LEGO brick auctions, then went to sleep. Upon waking, he discovered that he was the high bidder on many, and was now the proud owner of two tons of LEGO bricks. (This is about 4400 pounds.) He wrote, "[L]esson 1: if you win almost all bids you are bidding too high."

Mattheij had noticed that bulk, unsorted bricks sell for something like €10/kilogram, whereas sets are roughly €40/kg and rare parts go for up to €100/kg. Much of the value of the bricks is in their sorting. If he could reduce the entropy of these bins of unsorted bricks, he could make a tidy profit. While many people do this work by hand, the problem is enormous—just the kind of challenge for a computer. Mattheij writes:

There are 38000+ shapes and there are 100+ possible shades of color (you can roughly tell how old someone is by asking them what lego colors they remember from their youth).

In the following months, Mattheij built a proof-of-concept sorting system using, of course, LEGO. He broke the problem down into a series of sub-problems (including "feeding LEGO reliably from a hopper is surprisingly hard," one of those facts of nature that will stymie even the best system design). After tinkering with the prototype at length, he expanded the system to a surprisingly complex system of conveyer belts (powered by a home treadmill), various pieces of cabinetry, and "copious quantities of crazy glue."

Here's a video showing the current system running at low speed:

The key part of the system was running the bricks past a camera paired with a computer running a neural net-based image classifier. That allows the computer (when sufficiently trained on brick images) to recognize bricks and thus categorize them by color, shape, or other parameters. Remember that as bricks pass by, they can be in any orientation, can be dirty, can even be stuck to other pieces. So having a flexible software system is key to recognizing—in a fraction of a second—what a given brick is, in order to sort it out. When a match is found, a jet of compressed air pops the piece off the conveyer belt and into a waiting bin.

After much experimentation, Mattheij rewrote the software (several times in fact) to accomplish a variety of basic tasks. At its core, the system takes images from a webcam and feeds them to a neural network to do the classification. Of course, the neural net needs to be "trained" by showing it lots of images, and telling it what those images represent. Mattheij's breakthrough was allowing the machine to effectively train itself, with guidance: Running pieces through allows the system to take its own photos, make a guess, and build on that guess. As long as Mattheij corrects the incorrect guesses, he ends up with a decent (and self-reinforcing) corpus of training data. As the machine continues running, it can rack up more training, allowing it to recognize a broad variety of pieces on the fly.

Here's another video, focusing on how the pieces move on conveyer belts (running at slow speed so puny humans can follow). You can also see the air jets in action:

In an email interview, Mattheij told Mental Floss that the system currently sorts LEGO bricks into more than 50 categories. It can also be run in a color-sorting mode to bin the parts across 12 color groups. (Thus at present you'd likely do a two-pass sort on the bricks: once for shape, then a separate pass for color.) He continues to refine the system, with a focus on making its recognition abilities faster. At some point down the line, he plans to make the software portion open source. You're on your own as far as building conveyer belts, bins, and so forth.

Check out Mattheij's writeup in two parts for more information. It starts with an overview of the story, followed up with a deep dive on the software. He's also tweeting about the project (among other things). And if you look around a bit, you'll find bulk LEGO brick auctions online—it's definitely a thing!

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These $425 Jeans Can Turn Into Jorts
May 19, 2017
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Opening Ceremony

Modular clothing used to consist of something simple, like a reversible jacket. Today, it’s a $425 pair of detachable jeans.

Apparel retailer Opening Ceremony recently debuted a pair of “2 in 1 Y/Project” trousers that look fairly peculiar. The legs are held to the crotch by a pair of loops, creating a disjointed C-3PO effect. Undo the loops and you can now remove the legs entirely, leaving a pair of jean shorts in their wake. The result goes from this:

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Opening Ceremony

To this:

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Opening Ceremony

The company also offers a slightly different cut with button tabs in black for $460. If these aren’t audacious enough for you, the Y/Project line includes jumpsuits with removable legs and garter-equipped jeans.

[h/t Mashable]

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