Building Wealth In Your Twenties: What Complete Beginners Need to Know
If you’re reading this article as a twenty-something, congratulations!
By the time you’re done, you’ll know more about building wealth than many of your peers—and even people older than you, too.
Here are a few actionable truths for the start of your financial journey…
Your future depends on your financial education.
Until you understand how money actually works, you’ll lack both the knowledge and motivation to seriously build wealth.
Read How Money Works: Stop Being a Sucker to discover the basic concepts that you should have been taught in school.
Before long, you’ll know how you can put what you learn into action.
The time to start saving is NOW.
It’s simple—the longer your money grows via compound interest, the greater your potential for building wealth.
Collaborate with a licensed and qualified financial professional you can trust to find the right growth vehicles for you. Then start saving.
Speaking of saving…
Save whatever you can—even if it doesn’t seem like much.
You can only save $25 per month? That’s not too little to make a difference—time, consistency, and compound interest can transform even small monthly savings into a foundation for your financial future.
As your income increases, scale up your savings to match.
Take ownership of your income.
If you’re in your twenties, the skyrocketing cost of living is among the greatest threats to your ability to build wealth. As prices rise, the less income you have to save.
So what can you do if your paycheck is lagging behind the cost of living?
A common solution is to create a tight budget. But you can only cut back costs so much, especially if prices keep inching up.
That’s why it’s also essential to find ways to increase your income. Asking for a raise, finding a new job, and using your skills to start a side hustle are all strategies you might leverage to boost your earnings without launching a new career or going back to school.
Manage your debt before it derails your finances.
Make no mistake—ignoring your debt is dangerous.
It doesn’t take long for those monthly payments to completely consume your income—and your ability to build wealth.
Manage it now, before years of interest payments cost you a potential fortune.
Now is the time to secure proper financial protection.
Few young people realize that their twenties can be the perfect time to buy affordable life insurance.
That’s because the premiums for life insurance are based on risk of death, which, on average, tend to be lower in your twenties than later on.
Meet with a financial professional and explore which options are best for you. You may be surprised how much protection you can secure at a price that fits your budget.
If you take one thing away from this article, let it be this—you’ll likely never be better positioned to build wealth than in your twenties. Implement just two of the ideas in this article, and you’ll be miles ahead of your peers. Implement them all, and you’ll be well on your way to a prepared financial future.