Another excellent post from Dan Cuprill.
Since I’m no longer considered a young adult (and thank goodness for that. I never liked being asked for my ID), I am now in a position to offer advice to those who are. Specifically, those under the age of 35. If I haven’t lived it, I’ve seen those who have. Here’ goes:
1. Don’t Buy a House: Or if you do, don’t for one second think it’s a good investment. Home ownership is a luxury, much like a boat or a sports car. After interest, taxes, and upkeep, you will not get wealthy by owning a house. That’s not to say that home ownership doesn’t have some advantages, but increasing your net worth is not one of them. I strongly recommend renting for as long as you can find an adequate home. You’ll save more money than you can imagine.
2. Dump Your Friends: Okay, maybe dump is the wrong word. But too often the friends we grew up with are not always the best of influences. Desire to keep up with them financially can lead to some bad decisions. If your best friend’s family is better off financially than yours, don’t try to compete. You can’t win…at least not in the short run. Be glad they have a nicer car or home. It just shows what is possible in this country. But you won’t out do them overnight. It’s like trying to play one on one vs. Shaq. Why bother? If that causes you stress, find friends who have less. You will learn in time that nothing is more meaningless than possessions.
3. Pay Cash for Everything: If you can get through your 20′s without debt, you have succeeded far beyond the guy who makes $200K a year and owes $300K. Life is a marathon. The one who learns early to live within his means ALWAYS wins the race.
4. Save 10% of what you earn: Do the math they taught you in high school. At 6% over 30 years, you will amass a lot of money.
5. Learn to Hate Cars: Cars are worse than homes. They depreciate quickly and have a limited shelf life. Never fall in love with a car. It will break your heart. Buy cars of good quality, modest cost, and drive them into the ground. At 15,000 miles a year, that means you should own a car for at least 10 years…probably longer.
6. Exercise: Gym memberships are acceptable. But use them. At the very least, they can be great places to find your future spouse. In the end, good health will save you money and help you to earn more.
7. Find your faith: Judaism and Christianity are full of great lessons about using money wisely. The Man upstairs knows what He’s talking about.
8. Skip the 10 Year High School Reunion: The 10 year reunion is all about being shallow: Your job, your car, your house. You’ll leave it convinced you are a failure. The 30 year is all about what really matters in life. And sadly, not all of your classmates will be alive at that reunion. That is the one to attend.
9. Find a job you love, regardless of what it pays: If you hate it now, imagine how you’ll feel at 50. Money is not a good reason to hate getting up every morning.
10. Read: A smarter brain makes better decisions. Two books a month. If you hate to read, you won’t after you do it a while. It’s addictive.
