Your 20s: The Foundation of Your Life

Your 20s: The Foundation of Your Life

The majority of my audience is either approaching or in the midst of their 20s, and few realize how important this decade is.   

For the ones entering your 20s, what do you expect? What’s your two, five, ten year plan?

If you’re already in your 20s, what have you done? What goals have you accomplished? What’s next in line?

Before entering your 20s, you, like I and most young folks, believed you’d move away from your parents, party like a rock star, turn that expensive collegiate tassel, land your first job bringing in six figures, and last, but not least, become a millionaire before thirty.   

Sounds familiar?

Unfortunately, these are the expectations everyone, including I, have or had when entering their 20s, and the odds of them occurring are astronomically low.

Let’s make this more realistic. How can I create a strong foundation in my 20s that’ll propel me to greater success for the remainder of my life?

Easy:

1.) Learn Personal Finance

2.) Get Out of Bad Debt

3.) Assets Over Liabilities

4.) Creation Over Consumption

Learn Personal Finance

If there’s one class, curriculum, or course I wish public and private education would teach us all growing up is personal finance. Not getting into why this is the case, but individuals who put in hours to learn and apply personal finance in their 20s get a head start in life.

Most people are just unaware, so let this be your wake up call. 

Start with books. Not only will you learn personal finance by reading related topics, but you’ll also improve your speaking and writing abilities. My go-to entry level personal finance books are currently “The Millionaire Next Door”, “Rich Dad, Poor Dad”, and “The Compound Effect”.

These are just a few, and with so many personal finance books out there, information gets repetitive after roughly five to ten books.

Not a book person you say, no problem. Check out YouTube, podcasts, newsletters, forums, anything to get you started and hooked on personal finance.

And lastly, apply it. No point of having all this knowledge and not using it your advantage.

Get Out of Bad Debt

First off, what’s good debt?

Good debt is any debt that brings you income. For example, a mortgage on a rental home that’s leased out is a classic example of good debt.

Then what’s bad debt? Nearly everything else involved with debt: student loans, car loans, credit card debt, etc.

I’ll discuss credit card debt and car loans in the next portion, but the remainder of this section is dedicated to paying off student loans.

You need to make it a priority to pay off your student loans within the first 2-3 years of graduating. Live with roommates, even parents, be cheap, be frugal, work multiple jobs, and pay off as much of your student loans as possible in this time frame.

You’ll hear people say, “If you have low interest rates, then don’t worry about it.”

Being in student loan debt keeps you tied down to jobs you don’t like and deters you from taking risks. Your 20s are your risk taking years. Don’t let student loans prevent this.   

Assets Over Liabilities

There’s two types of people in this world. People who prioritize collecting assets, and others who prioritize amassing liabilities.

Twenty year old’s rack up on liabilities. And to make matter worse, we tend to rack up liabilities all while paying off debt. Not a good combination to have.

Liabilities:

The first liability to avoid is financing a brand new/luxury car in your 20s. You’ll never make any money off of this vehicle and the value steadily declines as soon as you’ve driven it off the lot.

If your vehicle works just fine, then no need upgrading. If you absolutely need a new vehicle, buy a slightly used one with cash, no exceptions.

Next is credit card debt. The only reason this wasn’t mentioned first is because credit card debt tends to be more popular with 30 year old’s. But, if you find yourself leaving your 20s with credit card debt, then you’ll have rough financial times coming to you.

Payoff your monthly credit card bill entirely, or just use straight cash if you don’t have the discipline.

Assets:

The baby steps taken in your 20s to add profit making assets sets people apart when they reach their 30s and 40s.

No one want’s to work your standard 40 work week until retirement at 65. One way to lower your retirement date is by creating multiple streams of passive income, and this starts in your 20s. Increase your 401(k) contributions, start maxing out your yearly Roth IRA, and look into real estate investing. It might not amount to much money now, but these passive assets leads to indefinite freedoms.   

And for all my entrepreneurs out there, your 20s are your time to build your brand or start your = business/side gig. Make this your side hustle to your current job.

Creation Over Consumption

For the majority of people in their 20s, true success and happiness derives from what they do after hours.

What fills your spare time?

You have two options: create or consume.

The ones that create win at life. Write, start a podcast, work on cars, start a side business or personal project, anything to spark creativity.

The ones that consume waste their valuable time away. Consumption of Netflix, television, alcohol, unhealthy food, social media, all slowly but surely lowers your quality of life. 

The person who’s been creative for a decade has a lot more to show and offer at the end of their 20s. Put away the phone, put away the laptop, turn off the TV and create something worth wild.

Hope you all enjoyed this week’s blog post! If you’ve missed last week’s post on the inevitable lifestyle creep, click here. As always, don’t forget to like, comment, share, and subscribe!

“It’s never too late to be who you might have been.”

Book of the Month: “You Need A Budget” by Jesse Mecham

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