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will be the engine of your personal economy – the job market.

       Chapter 5 is the millennial handbook for getting ahead at work: how to interview for and negotiate your first salary. Does the thought of a nine-to-five job at an office of gen x-ers and baby boomers terrify you? How do you start your own company and make work work for you? Should you “lean in” or “lean back” at work? We will explore the subtle gender differences in the workplace, with advice about the different ways men and women negotiate. Remember, the salary you accept at the beginning is the starting line for a 40-year career. Where you start is critical.

      Will you buy or rent? Chapter 6 offers strategies for the biggest questions in real estate, including how to survive living at home with your parents, how to split the rent bill with your roommate, and how to get your roommate's ubiquitous boy/girlfriend to kick in some of the rent, too.

      Couples and families are more likely to talk about religion, politics, or sex than money. Chapter 7 explores how to frankly talk with your parents about money (and borrow some from them). And it discusses the right questions to ask early in a relationship to make sure you are a good money match. Is it appropriate to ask how much the other person owes in student loans on the third date?

      Some of you may want to skip ahead to the investing chapter – of all the money moves you make, investing early will have the biggest impact on where you end up. Most of your grandparents could rely on a pension for their retirement, and your parents lean on a 401(k) for life after work. But you millennials will have even fewer investment tools handed to you when it comes to securing your financial health and wealth. So it's up to you.

      Consider this: If you save $5,000 a year for five years in your twenties and then never invest a dime again, you'll have more money in your retirement than someone saving $5,000 a year all through their thirties and beyond. Chapter 8 shows you the common traits of 401(k) millionaires. (Hint: Time is on your side again.)

      There's good debt – mostly student loans and mortgages – and bad debt – almost always credit cards. Chapter 9 offers valuable help for keeping your debts in perspective, with tricks for paying down the good debt and obliterating the bad debt, and how that will affect your credit score. The credit score is your money IQ. We look at how to keep it high and what to do to fix it if it is low.

      My hope is that, whether you read this book straight through or choose the chapters that mean the most to your own personal finances, you'll find advice and information in these pages that will empower you to start planning your financial future now.

Christine RomansSeptember 2014

      Acknowledgments

      This book would not be possible without the considerable efforts of my husband, Ed Tobin, whose encouragement made me think I could actually write a third book while raising three young boys and working a full-time job, and whose news judgment and editing made it actually happen.

      I'm so fortunate to be surrounded by the phenomenal reporters and editors at CNNMoney, who peel back the economic statistics and show how they matter to our readers and viewers. For any of you settling down with this book, make no mistake, CNNMoney.com will be a valuable resource as you use the building blocks within these pages to grow your wealth.

      Special thanks to certified financial planners Ryan Mack from Optimum Capital Management and Doug Flynn from Flynn Zito, who entertained my endless questions about retirement planning, budgets, and investing. To Mitch Tuchman of Rebalance IRA for tailoring an investing plan precisely for Smart Is the New Rich readers and to Stephanie Genkin for sharing in these pages the aspirations of her millennial clients.

      To the many millennials we interviewed for this book, and whose anecdotes are within these pages: Thanks for your honesty and, no, I didn't use your last names!

      A special thanks to my producer, the brilliant Logan Whiteside, who loves numbers as much as I do and scours the monthly labor market reports with me with equal glee. To my coanchor, John Berman, who makes a 3:00 a.m. wake-up (almost) fun. To CNN president Jeff Zucker, thank you for making Berman and me wake up before 3:00 a.m.! But more importantly, thank you for the encouragement to follow my passion for education and economics coverage.

      To CNNMoney's Laurie Frankel and Mike Tarson, thank you for your wonky love of tax-deferred versus taxable retirement strategies and dogged reporting on education and real estate, respectively!

      Special thank-you to the folks at Wiley and NS Bienstock for your support.

Chapter 1

      How to Think About Money: Budgeting Basics

      I think the best advice I've ever received is to plan for the future and to save your money. To plan for the future in a way you can have the same lifestyle after you've finished your job? That takes some planning and saving.

– Danica Patrick1

      The common denominator of so many successful people I interview is an urge to save money and build for the future. Danica Patrick is the most successful woman in U.S. auto racing – a race car driver, fashion model, and marketing maven. The best advice she ever received? How to take the last turn, how to navigate the pit, how to get the most out of the last drop of fuel? No, the best advice she ever received – and gives to others – is simple and classic. Save your money.

      It's really not complicated at all. Money saved today and invested properly – amplified by time – means wealth in the future. It's the little black dress of prosperity. It never goes out of style. Among the many gems from legendary investor Warren Buffett, this sums it up best: “Someone is sitting in the shade today because someone planted a tree a long time ago.”2

      No one is going to plant that tree for you. The key words here are you and time. Unless you win the lottery (you won't) or have a trust fund (nice, but unlikely) or have the brain of Mark Zuckerberg (don't we all wish?), you will grow wealth only one way: by spending less money than you earn. Investing your savings over time grows wealth.

Prosperity Formula

      There is a surefire, can't-miss way for millennials, loosely defined as young adults ages 18 to 35, to become millionaires. Call it a get-rich-not-so-quick scheme. Fidelity Investments studied the habits of people who earned less than $150,000 a year but had retirement account balances topping $1,000,000.3

      What's the secret of these 401(k) millionaires? They started saving young, and they socked away a big part of their paychecks. How big? Fourteen percent of their pay each year – before any company match in a 401(k).

      They started young, maxed out their savings, and took the “free money” that is the 401(k) company match – that is, the money your employer offers to contribute to your 401(k) plan. They weren't too conservative in their portfolios. The younger you are, the more stocks you should own. In fact, on average they had 70 percent of their retirement savings in stocks. (Bonds and savings accounts yield very low returns for savers and conservative investors. More on this, and alternative investments if your employer does not offer a 401(k), in Chapter 8.)

      Bottom line: They started early. And you can, too.

      Let's make something clear from the start if we are to spend the upcoming pages together. I don't believe you are a generation of lazy, narcissistic, reckless-spending, entitled tech junkies. (A Google search of the term “millennial” or “gen y” is entertaining.) In fact, I'm incredibly optimistic about the innovation and open-mindedness you're already bringing with you to the workplace. As I have crossed the country speaking with students and graduates and reporting on companies and economics, I have found that, despite the pile

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