How can millennials get ahead?
I’ve been learning about money for years, reading about it, learning from others, and personal experience in life from decisions I’ve made. Here’s some truth I can share: Building a financial foundation in your teens and 20’s takes hard work, sacrifice, and time. Here are some steps to consider:
(1) You should find work that pays well
In order to get ahead, you have to make money and make enough money to cover your expenses. You may have to take on part time jobs to supplement another job for a period of time to boost your earnings until you get a promotion or raise. You also may have to take on work that you feel is beneath your skill level or ability while you are still looking for that high paying job that suites you.
(2) Invest in Yourself
What is the largest asset you possess? Your mind.
If you grow your knowledge and sharpen your skills, companies will see more value in you.
- Read books written by the world’s most successful people. Get inside their minds and learn how they think. How did they become so successful
- Watch YouTube videos on important career and personal development topics
- Stay motivated and aggressive in seeking promotions
(3) Sacrifice: Stick to a strict spending budget at first
You’ll have to live below your means for a while to increase your cash flow that you can save up or invest. This may mean giving up weekend parties or expensive meals out at restaurants.
(4) Build a safety buffer aka the emergency fund
Nobody enjoys living paycheck to paycheck, but yet so many Americans do. Set aside some your income to build up an emergency fund so that you have a safety buffer to weather the ups and downs in your cash flow.
(5) Keep large expenses as low as you can for as long as you can
What are the three biggest expenses you’ll likely face in your 20’s?
For most recent young hustlers, rent and transportation will deplete the majority of your income. This goes along with sacrifice because you may need to go with the cheaper apartment that may not have as nice of amenities or walk and bike to work to save gas money if you live nearby the office.
(6) Take advantage of the magic of compounding interest.
Start allocating a portion of your income to be invested at a young age and your money will earn interest.
Then your interest will earn interest and over time you’ll make more money from interest than you will from what you contributed in capital.
The power of compounding is a huge strategy to employ when you’re young. Don’t wait to get your wealth snowball rolling if you can afford to set aside a sizable chunk of income.
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