Saving Money and Building Wealth

Image source: https://www.dnaindia.com/business/report-use-credit-card-as-emergency-lifeline-2280766

1: Accept that you’ll need some credit cards.

Otherwise, you’ll basically have no credit and limited access to other ways of establishing credit. Without credit, things like real estate and mortgages will basically be off limits, and things like car loans will cost you an insane amount more. Having credit cards in your name is not about needing or even using them — it’s just about playing the system.

Image source: https://www.cnet.com/news/tv-vs-projector-which-big-screen-makes-the-most-sense-for-you/

2: Avoid consumer debt.

Consumer debt is debt that doesn’t make you money. Debt used incorrectly can destroy your life. Only buy things you can afford when you can afford them.

Image source: https://wellkeptwallet.com/how-to-start-living-below-your-means/

3: Live below your means.

Living below their means is a personality trait of everyone who has ever built lasting wealth. Whatever you make, you need to live on significantly less. Most things won’t make as much of a positive long-term impact on your life as just saving and investing. Living cheaply in your 20s will set you up forever.

Image source: https://medium.com/comistar/introducing-bankapply-bank-account-opening-in-europe-simplified-76e3d5317c99

4: Have a bank account solely in your name.

This is by far the easiest thing to do on this list. This shows potential lenders and other agencies that you’re an independent adult. However, this isn’t about opening an account “just anywhere” simply to have one.

Image source: https://www.forbes.com/sites/financialfinesse/2020/07/13/why-you-might-want-to-contribute-to-a-roth-ira-by-july-15th/?sh=2df2e0605611

5: Open a Roth IRA.

This is a retirement account for “post-tax” money. That means you should invest money you’ve already paid taxes on there, which is going to be almost any money you get from a normal hourly/salary job.

Image source: https://motto-jp.com/media/work/how-did-i-get-a-job-part-2-of-5/

6: Get a(nother) job.

Get a job or create a “side-hustle” even if you don’t need it. It doesn’t matter what it is or if the pay isn’t great. Do anything, even if it’s just a few hours a week, for extra investment money. If you’re investing in your 20s, a rough mental note to keep is that every $1 you invest now is $15–25 in future growth.

Image source: https://news.tradimo.com/how-to-invest-in-stocks-beginners-guide/

7: Learn how to invest for the long run.

It might be tempting to chase the latest buzz on the streets. You see Tesla go parabolic, Amazon’s monopoly seems like it can never fail, and that weird guy from high school is posting pictures of the car he (allegedly) bought with Bitcoin money.

Image source: Alex Kormann/Charlotte Observer/Tribune News Service via Getty Images

Bonus: Don’t forget you can also invest in yourself!

Investing doesn’t just mean corporate giants. If you want to take a risk, it’s best to risk young. If you want to start something like a Twitch channel or small business, try to do it early and give yourself a reasonable time limit. Decide something like, “Okay, I’m going to give this YouTube venture two years, and if it fails, then at least I gave it my all and don’t have to wonder about what could have been.”

Image source: https://www.nydailynews.com/life-style/university-tosses-mortarboard-throwing-unacceptable-risk-article-1.2641164

8: Reconsider college.

Saying this as a former teacher doesn’t get me many points in the education community, but I’ll keep saying it: college isn’t for everyone.

For more finance, TA, and life in Japan, visit me on twitter @Nikadesh

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Nikadesh

Nikadesh

12 cats in a man suit. Finance and Japan. May your bags be full and your candles green.