In your 20’s and need some money motivation? In this video I’ll share 6 tips to help you get your money right in your 20’s and set yourself up for the rest of your life.
[Money Tips For Your 20’s & Financial Mistakes To Avoid Before 30]
It’s not all about being frugal in your 20’s, but with some smart decisions you can have a lot of fun AND start to build a solid foundation for your future finances.
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Transcription:
Yeah, hey there, Ray Corcoran here. In this week’s video, we’re going to be going over money tips for people in their 20’s. I’m 33 now. And, I was thinking the other day about some of the things that I did and didn’t do during my 20’s. And if end up liking the video, please give it a like. It helps it, push it out to other people. And, if you’re interested in other content on making money, investing money and saving money, please consider subscribing.
So your 20’s are a really interesting time period. You’ve got… Obviously, everyone’s different, so this may vary from person to person, but generally, most people spend their 20’s, or at least their early 20’s, with no kids, heaps of time, heaps of freedom and no real heavy commitments yet. That’s what makes your 20’s quite unique, compared to the rest of your life.
In this video, I really want to talk about what can we do to ensure or increase the chances that you’ll have a really, really great life, with lots of money and all that stuff, and lots of comfort and freedom.
So tip number 1 is invest in your skills. So, one of the things that I was taught by one of my mentors was the concept of learn, earn, and then return. Everyone’s different, but generally, he told me that 20’s is for learning, 30’s and beyond is for earning, and 40’s maybe onwards is about returning, so giving back. In your 20’s, you’re building a load of your skillset that will form the basis of what you get paid for in your 30’s. Now that might happen earlier or later, depending on your own situation, but generally, this is how it typically flows. And then as you get older, you want to help the next generation out and teach them all the things that you’ve learnt along the way. So in the midst of having a bunch of fun in your 20’s, which I highly recommend, you really want to start thinking about, “What skills am I actually developing?” And are they skills that are going to be valuable to potential employers down the track, or valuable if you choose to start a business down the track.
One thing I would do here is really start to think about what I would call evergreen skills. So, the world’s a massively changing place. And, what you want to make sure that you do is make sure you build a lot of skills that are evergreen. So, regardless of what industry or what career path you choose, that these skills will always work with you. One good example of an evergreen skill would be communication. So, just being able to communicate with people clearly is going to be a huge advantage to you, regardless of what career path you choose. The next one would be sales and/or marketing. Being out on this, and obviously, sales doesn’t just apply to literally selling stuff, it applies to selling people on a concept, selling investors on investing in you, selling your boss on a promotion. Being able to persuade people ethically and craft a message in a way that’s appealing is extremely valuable.
And that’s something that I was taught and I learned in my 20’s that… I realised that sales and marketing… For me, I have a marketing agency now, and I realised that those skills, being able to attract attention and turn that attention into sales is a huge skill. And it pays very, very well once you master it. And with the world being such an unpredictable place these days, one of the best things that you can do is secure your own financial future, regardless of what’s happening in the world. Lots of people blame the government, and they blame this and blame that. The best advice I could give is really, if you can make a lot of money, you start to become a bit disconnected from that, because you’re building, you’re creating your own economy, so to speak.
So, the more money that you have, the less affected you are by government changes and all that sort of stuff. You’ll still be affected, but you’ll be less affected, which is why it’s really, really important that you start to build a strong skills base, so that you can get paid really, really well, well into the future. So, start to have a think about what kinds of skills are you going to need to be successful in future roles? One thing to keep in mind as well is, leadership skills is a pretty crucial one. Regardless of what you do, whether it’s a job or a business, leadership skills, the ability to lead people and get them to follow you, and not by like cracking the whip, but make them genuinely want to do what you’re asking them to do, and influence people, skills like that are crucial and typically happen. You need to have leadership skills for higher paying roles, generally, because it’s not just about being a great technician, it’s going to be about being a great technician and being able to manage people and maybe have other technicians under you potentially.
And this flows into my second tip, which is pick a lane. Now, it doesn’t need to be forever. So, it could be pick a lane for now. But, start to think about what are you going to commit to. A lot of people spend their whole 20’s, or whatever part of their early life, jumping from thing to thing. Now, if you don’t know what you want to do with the rest of your life, that’s fine. Nobody’s expected to. I didn’t know that going into university. I had no idea. I picked marketing because I kind of liked the combination of creative stuff and numbers, which marketing has. It has a bit of an overlap of that, and that tailored to my strengths. But I wasn’t fully set on that. So, don’t worry if it’s not something that fully lights you up. But start to think about, what are you naturally good at? What are you naturally better at than maybe your friends? You don’t have to be the best in the world at it. But, I would start to think about, what kind of role would really align to your strengths, because we want to play to our strengths. We don’t want to just try and do something because it pays well, but when it’s not really in line with our area of genius.
When I was in my early 20’s, I made a commitment and, I guess, I made a clear decision to stick with marketing. And I was going to learn digital marketing, and I was going to learn everything to do with it, and just even more general marketing. And that’s something that paid off, majorly, for me, in the years following that, and that’s still what I do today. Don’t overpsych yourself out, or anything like that, if you don’t know exactly what that is now. But start to think about, what are you good at? What do you enjoy doing? And what does the market need? Try to find that combination where it overlaps where you like it, you’re good at it and the market likes it.
The third thing that I would do is start to set aside some money for your future. Now, this one seems obvious, but it’s probably that one of the things that I wish I did a little bit sooner. I got very, very good at that, probably mid to late 20’s. I got very, very strict with it, and it worked out fine. But, if I had my time again, I would’ve just started earlier. And, I don’t think people in their 20’s, personally, should be extremely strict. Unless you’re trying to become a bazillionaire or something, I don’t think that… It’s a great time to enjoy your life, because realistically, you have time on your side. If you’re in your early or mid 20’s or whatever, you’ve got time on your side. So, I would focus on… You just pick a percentage or a dollar amount that comes out of your pay each week or each fortnight or each month, and just start with that.
And, I think it’s more important that you just take… You get used to taking a chunk of whatever comes in, and it get shipped off. And that’s the concept of paying yourself first. Just get used to taking a chunk out, putting it away, taking a chunk out, putting it away. That habit is more important than the dollar amount, in my opinion. You start with 10% if you want. You can move up to 20%. You can move up to 50%, if you were more ambitious. The main thing is that you get into the habit of whatever comes in, you don’t spend it all. You take a chunk, put it away, take a chunk, put it away. That habit is crucial, and the sooner you can get that habit, the better. And that still means you can have a lot of fun. But it means that you’re handling your business first, and then you have the fun with what’s leftover.
Number 4 is start to establish your cash buffer. So, regardless of what your circumstances, you might start with making your first $100 or your first $1,000 or $10,000 or $50,000 or a $100,000 even. Wherever you’re starting from, start to get to a point where you have a cash buffer that you don’t touch for any reason. That’s going to be your financial fortress. I can’t remember where I heard that, but I love that phrase. It was in a book somewhere. But basically, that is your safe cushion for, if anything goes wrong, you’ve got that money there. That might be it for many people. It could be three months, six months, 12 months of living expenses. And that’s up to you. But, pick the amount, save that up, and have that buffer there. And then from that, we kind of just forget about it. That’s the buffer, and we just leave it where it is.
Number five is, once you’ve saved up a solid buffer, anything beyond that, next step for you is to start making some initial investments. Now, for someone that, in their 20’s, most people in their 20’s… I was like this. I didn’t know anything about investing. I knew I needed to make my money work for me. And I knew that in a savings account, it was not going to make anything. So, I needed to start making some early investments. I think for a lot of people, early investments can include things like index funds, ETFs, so exchange traded funds, and potentially looking at maybe a cheap regional property, for example, that doesn’t cost too much, and the deposit is a lot lower.
There’s some common options for people. You can try stuff like crypto and all these other stuff. For me personally, I believe in preserving your capital and not taking… You can take risks. At that early stage of your life, you can actually take a lot of risks, and it’s going to be okay. But for me, I think, if I had my time, again, I wouldn’t try and make that quick money. Because if you’ve got… Say you’re 20 now, and you’ve got all this time to build up a buffer. Even if you’re making 10% on that money every single year, that’s going to compound pretty crazy over time, if you just keep adding, keep adding, keep adding, keep adding, especially over 10 years. And you can put that into a compound interest calculator to see exactly how that could turn out.
And realistically, you can stop here. If you just keep rinse and repeat, and you keep doing that for the whole part of your 20’s, you’ll end up with tens of thousands, hundreds of thousands, even a million dollars spending, if you’re a higher earner by the time that you’re 30. So, it’s really, really important that you make sure that you just keep investing consistently. Always remember the golden rules of personal finance, spend less than you earn, invest the difference and invest early and often. If you follow those golden rules, you can never go wrong.
Number six is an important one. And what I really, really recommend is starting to look at what types of people are on the bus and onboard with what you’re trying to do, and which people are maybe holding you back or not really in line, and maybe not going in the direction that you want to go.
What you find is… Well, at least in my experience was, everyone kind of drifts, and they start heading towards whatever they were going to become. So, if people were going to be successful, they start heading that way. If people are going down the gurgler, they start going that way. But either way, whatever was naturally going to happen, it starts playing out as the years roll by. You really need to have a look at your own friendship circle. I’m not saying just drop everyone all of a sudden, and everybody’s a [high-dollar 00:10:17] or nothing like that. I’m not saying anything like that. But, what I’d really recommend is start to look at, who do you hang out with, because they really affect the trajectory of your life. If you’re hanging out with people that aren’t on board with that, and you really, really want to create something quite special… And you don’t need to expect them to do the same thing, but it’s more like, are they on board with it? Are they positive? Do they want to head in a positive direction? Or are they the kind of people that just want to stay wherever they’re at and never really do anything?
And just have a think about, who do you need to cut out, or who do you need to reduce the amount of time that you spend with, to make sure that you can go to where you want to go. And the people that are cool with that, come along for the ride. And the people that don’t, that’s fine, no ill will towards them. But, there’s just a disconnect.
Number seven is just to relax. So, this one’s a pretty simple one, but a lot of people have a bit of maybe anxiety about what pace they’re at, and are they going too slow or too fast, or so-and-so has got more stuff or so-and-so seems to be killing it, and you’re not or whatever. One thing I would say is, run your own race. What they do, literally, has no bearing on what you do. What they do may look really good, but maybe crap underneath the surface. You see all those stuff on social media. There’s lots… I’ve seen under the hood of thousands of businesses over the years. And, some of the most successful looking businesses don’t look that good under the hood. I’ve had times where I’ve known two competitors, and I happen to know both of them. And one of them thought the other one was doing really well, even though their business was in a shambles. And the other one thought the exact same thing. So, both businesses were terrible. Both were good at putting on a front. But it’s just really interesting, the truth of that situation. So, I wouldn’t worry too much. If you assumed that most people’s lives are going worse than they look on social media, you would probably be right. And just take your own pace.
Realistically, what they’re doing doesn’t really, in a day, affect what you’re doing. Stay in your own lane. Focus on your own stuff. Focus on bringing and more cash, being tight, not letting any cash go out the door unnecessarily, and taking those bulk amounts of money, and dump it in investment, dump it in investment, dump it in investment, over and over and over again. You don’t have to be smart or clever or a genius or sell a massive startup for a billion dollars. You don’t need any of those things. If you can do that stuff, you’ll end up with a lot of money. It’s just simple maths. And along with that, make sure you have heaps of fun.
Your 20’s are unique in the sense that you can travel anywhere. You can do anything. You don’t have maybe a massive family home mortgage to pay off. You may not have kids. All of your friends have free time. That stuff, in your 30’s, doesn’t happen as much. You still can have fun, but it needs a bit more planning. Enjoy yourself. I thought about this the other day. If I got hit by a bus tomorrow, I wouldn’t think about any money that was ever made. I’d be thinking about all the awesome memories or all the travelling I did, all the countries I saw, all the fun moments I had with my mates, drunk night out, all that sort of stuff. All the experiences you have with friends, all the experiences you have with family and kids and all that sort of stuff, they’re all the things that make a big difference. So, don’t not do all that fun stuff through your 20’s just to make a few dollars. There’s always going to be lots of money to be made, and you’ll always have time to make money.
And the last thing I would say, just to wrap this all up, is really make decisions that lead you to where you want to go. You’re going to have people in your life that don’t want to make zillions of dollars, and that’s totally fine. But just make sure that your actions are aligned to someone that does want… If you want to achieve certain things, or you want to make certain amounts of money, your lifestyle is going to look different to someone that doesn’t want those things. So, you may have situations where you’re working every week, or on the weekends, or at night, or early in the morning or whatever. You’re not going out to certain fun things, because you need to save money or whatever. Just understand that your lifestyle should look different, if you have different objectives to other people.
So, I hope you enjoyed that video. If you liked it, please give it a like. If you enjoy videos like this, please consider subscribing. And yeah, I’ll see you in the next video. Cheers.