Note: this is a guest post from Martin over at Studenomics.
- Setting aside at least 10% of our income towards retirement. Preferably more.
- 3 to 6 months worth of living expenses saved in an easily accessible emergency fund.
- No debt – other than a mortgage or student loan.
I wanted to write about what I’ve been doing recently to ensure that I beef up my net worth so that it’s as high as possible by the time I hit 30.
Invest in yourself.
This goes without saying. I truly believe that your 20s are the best time to invest in yourself. The more that you learn, the more valuable that you’ll become. Whenever anyone asks me anything about investing money, I ALWAYS suggest that they invest in themselves.
How can you invest in yourself?
- Formal education. This is anything related to college. You can earn a new degree, attend graduate school, or earn certificates.
- Attend conferences. I’ve gone out of my way to attend as many conferences as possible so that I could meet successful people in the field. This has greatly helped me with spotting opportunities and trying new ideas out.
- Buy books, courses, and anything that allows you to learn. Learning is key. There’s nothing I enjoy more that a good book and a cold beer. A book will go for $20 and it comes with thousands of dollars of information.
I’m trying to enroll in a few fitness-related classes coming up just so that I can improve how I approach training. If you invest in yourself in your 20s you won’t regret it.
Invest in income generating assets.
Do you have any assets that generate an income? I invested my money into a rental property at an early age because older friends always told me that it helps to have income generating assets. You don’t have to start off with a rental property. You can try to build a business or work on anything else that can help you make more money in the future.
Work harder to make extra money.
How hard are you working? Could you work a little harder? Are you blindly chasing passive income?
Too many of my friends are blindly going after passive income without actually increasing their real income. You could easily score a part-time gig or try to ask for more hours at your current job. Every dollar counts. When you make more money, you can really dent your debt.
Master your spending.
It’s not easy to be good with money. Trust me. After blogging about personal finance for over 4 years, I still make foolish mistakes. My only suggestion is that you take the major expenses (cars, insurance, monthly subscriptions) first and then you go after the daily battles. Just to combat my spending on food, I took the whole month of November to track how much money I spend on food.
If you can slowly improve your spending, it’ll benefit you in the long run because that’s going to mean more moolah in your savings account.
That’s what you can do to get the most out of your 20s and increase that net work. When I talk to older buddies, they often regret not taking their 20s seriously enough. It’s when you have the most energy and feel on top of the world. The only thing that can hold you back is you.