Investing

Millennial in Debt co-founder who paid off over $100,000: Here's the worst money advice I ever got

“I missed out on a lot of investing opportunities in my 20s.”

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Melissa Jean-Baptiste is the co-founder of Millennial in Debt.
Courtesy Melissa Jean-Baptiste

Melissa Jean-Baptiste learned about money the hard way. As the oldest sibling in her family and a first-generation college student, she had to figure out a lot of new financial skills on her own. "I pretty much had to do everything," she says. "Apply to colleges, experience adulthood before my younger siblings, and kind of learn to navigate through it all."

In order to become more comfortable with her finances, she'd sometimes lean on the advice of her professors and the people around her. But the guidance she got wasn't always perfect.

"The worst piece of advice I received was when I was 25," she says. "I was told not to invest my money while I'm paying off debt, just to focus on paying off debt, and that I could invest later."

Heeding that advice turned out to be a mistake. "I listened for a few years and I was annoyed with myself because I didn't dive into the different options that I could do while paying back," she recalls. "I missed out on a lot of investing opportunities in my 20s, which can be so beneficial for when you get to your 40s and 50s."

Jean-Baptiste is now a seasoned investor and knows about letting your money grow. With that knowledge, she was able to pay off $102,000 in student loan debt on a teacher's salary. She's the co-founder and content creator of the Millennial in Debt brand and spends her time teaching young people how to get out of debt, build wealth, and earn financial freedom.

"It is possible to invest while paying debt," she says. "Your life doesn't have to just be one thing."

On starting to invest: 'Why didn't I do this 5 years ago?'

Juggling debt repayment with investing for long-term goals can feel next to impossible, especially now as millions of Americans struggle to keep up with their finances in the pandemic.

There are some financial silver linings, like people saving more and planning for their futures, according to a 2020 report from Charles Schwab. But 30% of the 1,000 adults polled still had some apprehension and only one in five said they were more likely to invest more in the market.

Overall, just 55% of Americans say they have money in the market, a figure that has held fairly steady for years, per Gallup data.

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Experts recommend that if you have high-rate debt, such as personal loans or credit card debt, you should prioritize paying it down. But even then, it's smart to build your emergency fund and contribute to your workplace retirement account.

Getting an early start and making regular deposits over time helps you harness the power of compound interest, meaning you earn a return on your money and on the interest it has already accrued. 

"Every year I got a raise, I would increase [my contributions] and watch the compound interest work off that small percentage," says Jean-Baptiste. "I was like, 'Why didn't I do this five years ago?'"

For example, someone who starts saving $5,000 a year for retirement at age 25 will have more than twice as much at retirement than someone who starts at age 35.

Create a plan to get you through 'days where you lose'

When the pandemic started in March, some investors panicked: Almost half, 42%, sold at least one stock and later regretted it, according to a MagnifyMoney survey of nearly 1,000 Americans.

While the market has a proven long-term track record, dips and drops are a normal part of the market cycle. So it's important to have a plan, and a portfolio, that can help you stay the course and avoid making impulsive moves.

"No matter what you're investing in, no matter what your strategy is, there are going to be days where you win, and there are going to be days where you lose," says Jean-Baptiste. Shore up your portfolio with a diverse mix of stocks, bonds, and other vehicles so when the market tumbles in one area, you can remain invested in other sectors that are performing well.

Remember that everyone's money situation is different, she adds. Whether or not you lost income because of the pandemic, her advice stays the same: "Personal finances are personal," but not investing is a mistake. If you get started early, even if you can't afford to put aside much, you can reap rewards for your financial future.

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