Should you focus on increasing your income, reducing your expenses, or both? What are strategies that actually work for building wealth? Grinding in your 20s seems to be a popular option that most financial advisors and motivational gurus recommend for building wealth. And it is no surprise to see why. The effect of compound interest and physical & mental strength in your 20s will be 4 fold more effective than grinding in your 30s. Learning the fundamentals and what to do in your 20s is extremely important. Hence, here are 5 Tips for Creating & Building Serious Wealth in your 20s.
Stay Focused on your wealth goals
A well popularise rule by Malcolm Gladwell’s blockbuster book “Outliers”. As Gladwell tells it, the rule goes like this: it takes 10,000 hours of intensive practice to achieve mastery of complex skills and materials, like playing the violin or getting as good as Bill Gates at computer programming.
Learning not to be swayed by the next shiny object. Oftentimes you will hear news from your friends or watch the news media that people here and there are making large sums of money. You need to learn to position yourself to catch the wave and not chase after the wave. Trends and hype die off quickly. However, if you are working on something with strong fundamentals and structure. You are more likely able to do alright.
Learn to build an obsession with growing your income and Investment
The simplest way to build wealth in your twenties is to buy assets and avoid liabilities. An asset is anything that grows in value over time or pays you money just for holding it. Real estate, stocks, bonds, websites, and enterprises are some examples. There are plenty of ways you can make money. And you will need to learn to build it by growing your income and investment.
Never stop learning how to build Wealth
Learning does not end once you have received your diploma, degree, or license. The world of investing changes drastically as the years go by. What you find creative today may become simply another everyday tool utilized by people tomorrow, only to be replaced by another invention. Take for example Google maps. Back in the early 2000s, taxi drivers are the only experience people on the road who had the knowledge to drive all around their country. Now, nearly anyone who has a Google Maps can navigate their way around the world.
To have the ability to keep learning, one must be open to continuous learning and the rising changes. Books, courses, and even traveling around the world can be a great learning opportunity for you. That’s because as a person aiming to create and build serious wealth, you will need to keep learning and finding problems to solve. This problem can either be solved by inventing a new product or service.
Don’t be tempted by lifestyle Inflation
Lifestyle inflation refers to our proclivity to spend more as we earn more.It’s also known as “lifestyle creep” since these changes can sneak up on us. For example, we could spend our raise one year eating out more, taking an extra trip, and purchasing new clothing. To prevent lifestyle inflation, the FIRE movement activists practice living a minimalistic lifestyle
To build wealth in your 20s, invest everything you have either in yourself or assets. If you invested $1 in the stock market every day for 30 years, you would have invested $10,950 in the stock market. However, assuming a ten percent yearly return, your account balance might be worth a whopping $66,044.
Willing to take failure and move on
Failure is a learning experience. It’s an opportunity to reconsider and return stronger with greater rationale. Failure does not result in death. No matter how difficult it may be, remember that failure only means you get another chance to try again.
Like the company SpaceX which created the first reusable rocket. The company had failed 4 attempts to perfectly land their rocket, causing it to go down in flames. The founder Elon Musk was close to bankruptcy due to this incident. However, the founder preserved and work hard to achieve his dream. For the 5th launch that happened in December 2015, the rocket landed successfully. Presently, the company is now the most valued private space company in the world and is making positive changes to the world.
Elon Musk remarked in a brilliant quote regarding his failures that “if things aren’t failing, it implies you’re not innovating enough.”
In conclusion, focus your 20s honing your craft by working and practicing that 10,000 hours. Serious wealth is created when you devote your time and effort to creating something that yields little or no results at first. Be willing to accept failure and mistakes. Learn from it and find ways to solve the problems. In addition, having the ability to cut down on distractions that will affect your goals in the future will allow you to focus on the task at hand better.
Sacrifices need to be made to create and build wealth. Yes, it is true that money doesn’t buy happiness. However, money does solve any problem and it allows you to have the financial capability to do whatever you want in life.
If you would like to know more about how to build wealth, you can read “Early retirement strategies“. You can also check out our page at Money talks. For daily updates to your feed, you can follow us by adding your email to subscribe or follow our other social media.