Robert Friedman’s freshman and sophomore business and finance students kicked off a series of lectures last week with Aaron Safier ‘01, founder and CEO of Sapphire Wealth Management Group. In his sessions, Safier conducted lively discussions focused mostly on personal finance issues that students face today and will continue to deal with in the future. The most important lesson, he stressed, was that securing financial stability and growth requires early and advanced planning. He emphasized that saving money and investing it wisely are critical and that there are different tax-free accounts (401k vs. Roth IRA) to choose from. He explained how putting aside even a modest amount every week or month can help you build a large portfolio 30 years later due to compounding interest. He also emphasized that having a mix of investments to balance risk and reward is essential. Why? Because there will always be things that come up, some you can anticipate and others you may not, that will require you to have cash available.

Safier also talked about how it is important to avoid going into debt (especially on credit cards) but, at the same time, acknowledged the wisdom of using leverage to make money without actually having to take the capital out of your pocket. He explained the difference between deficit and surplus and why it’s important to always have a surplus by living within your means. Finally, Safier talked about how the difference between the top line on your paycheck (the “gross” pay) and the bottom line (the “net” amount) is because of taxes and you must plan accordingly. Too many people think they are making $X per year only to see $Z dollars at the end of the year because $Y was taken out as federal, state and local taxes. The students look forward to hosting their next guest speaker.