The Missing Semester: Your financial choices have consequences. Will you choose wisely?

By Gene Natali

The 2013 EIFLE Book of the Year! Selected as a finalist for the Best Book Awards by the USA Book News!

Visit www.themissingsemester.com to read more testimonials from academic and financial professionals.

Choices we make every day have financial consequences—in some cases, BIG financial consequences. Understanding these critical decisions requires understanding their long-term effects.

The Missing Semester provides a short course on the essentials for making wise financial decisions and gaining financial freedom. Although designed with the recent college graduate in mind, The Missing Semester is relevant to a much wider audience. Those who bypassed college, or who are already in the working world, may better relate to some of the topics discussed. For those still in college or high school, this is a chance to get a head-start on peers and an independent life.

The Missing Semester is based on the principle of ownership—ownership of your financial future. It begins with the premise that your financial future is your responsibility, and that you cannot plan for or expect help. The book shows how to build a strong financial foundation, prepare for the unexpected, and confront challenges.

• Language: English
• Publisher: Harriman House
• Release date: Apr 26, 2022
• ISBN: 9780857199812

Gene Natali

Gene Natali is an award-winning author (The Missing Semester) who brings a unique blend of experiences to his writing. Following the success of The Missing Semester, he regularly keynotes investment and education conferences across the country and has spoken in over 600 high school and college classrooms. The Missing Second Semester, sequel to The Missing Semester, was written largely from these student and teacher interactions. In 2019, Gene founded Troutwood out of the Carnegie Mellon University Swartz Center. Troutwood develops financial planning and investment education tools for individuals. Prior to Troutwood, Gene spent 17 years personally working with some of the largest institutional investors and retirement plans in America. Gene is a part-time lecturer at the University of Pittsburgh where he has taught Personal Finance since 2015. He is a Chartered Financial Analyst, and board member of CFA Society Pittsburgh where he serves as chair of the Society’s financial literacy efforts. Gene holds an MBA with a concentration in finance from Carnegie Mellon University and a bachelor's degree with a concentration in economics from Allegheny College. He, his wife, four children and chocolate lab, live in Pittsburgh, Pennsylvania.

Book preview

CHAPTER 1

WHY THIS FINANCIAL STUFF MATTERS

Are you ready?

This book is about money stuff—financial matters and financial decisions that will have a profound effect on your life. You can learn about this stuff and reap the considerable benefits . . . or skip this semester and suffer the consequences. You might not get these subjects in school, and they don’t usually make for locker-room or water-cooler conversation. But they affect critical decisions almost all of us face. Still, there are topics here many people hesitate to discuss—maybe because they don’t know the right questions to ask, or because they don’t realize they are already making choices with potentially big consequences.

If this applies to you, you are not alone. What we talk about here is based on our personal experiences as well as the real-life experiences of many others, people probably just like you. We can’t promise to rid you of worries about issues like debt, income, and financial obligations. We can help you avoid pitfalls and see opportunities. Start today. Why today? Because it’s expensive to wait, as you’ll see.

Consider a few facts about our collective financial life:

77% of Americans are stressed over finances.¹

69% of Americans live paycheck-to-paycheck.²

54% of American households spend more than they earn each year.³

Student debt increased to an estimated 1.5 TRILLION dollars in 2020.⁴

The sticker price of a college education has increased 370% over the last thirty two years.⁵

Total credit card debt is approaching one TRILLION dollars.⁶

Much of our education system is designed to prepare us for careers in specific fields, and most institutions do an exemplary job of that. But few, if any, teach us how to live in relation to money. Take the plight of a physical therapist whom we interviewed for this book. After seven years of school to gain hard-earned undergraduate and doctorate degrees, her starting salary limited her ability to live on her own and repay her student loans. Anyone with a modest salary facing seven years’ worth of college debt would be similarly challenged. This problem should have been addressed seven years ago! The flaw in this case, or in the curriculum, was in the lack of preparation for life after school. But don’t panic. Your education might not have prepared you for life’s financial challenges, but it doesn’t prohibit you from making good, disciplined decisions. We can grumble that school hasn’t prepared us for financial life, or we can do something about it. Remember, hope, while important, is not a plan. A course of action is.

Begin by briefing yourself on the basics. Take control of your financial life today. Ignore the financial basics and risk paying the future consequences (you’ll only be able to blame yourself).

Consider this a book about how to avoid big problems. It starts with a short course on managing spending and earnings. Postponing discussion of a job, it digs first into debt, since most graduates, with or without an income now, left school with debt of one kind or another. In any case, this book isn’t a job guide. Although, after discussing debt we’ll address financial decisions about your job and your income, then go on to investing, housing, and finally, preparing for the long term, retirement.

The missing semester that follows is not a tough one, but it’s arguably the most important semester of all. We hope it helps to prepare you for what’s ahead.

CHAPTER 2

THE REST OF YOUR LIFE STARTS NOW

Are you prepared for life after college?

Authors’ note: If you chose to bypass college in favor of trade school, military service, or any number of other

possibilities—please read on. The information that follows still applies.

Over 1.9 million students graduated with bachelor’s degrees from U.S. colleges in 2020, and for many of these now young professionals, the world just got narrower.⁷ This might seem counter-intuitive; and to an extent, it is. Most of your school life you heard that the world would be at your fingertips after college, and that you would be able to do what you want. This sounds nice, but the reality is that responsibility takes precedence—responsibility to provide for yourself and to fulfill past promises. College is over, and the next semester of your life begins now.