Our school had this line painted in the school wall in our mother tongue “Eat half in youth, and save half. The savings of youth are the means of old age.”
So far, I’ve been just saving half of my money(tuition income as a student , job income) in bank account. (the bank which gives highest interest rate in my country)
The rest I spend on hobbies , other necessary costs etc.
Do I need to change this approach and save more? On one side my mind says, saving more means you could buy some lands in future which could be used as making a building and renting that to earn money. Other part says “life is short, enjoy it”.
Also, I don’t think just saving money won’t be a prudent choice.
I had the thought of investing in share market but the thing is politico dogs are notorious in my country for influencing share market , where middle classs share holders suffer. Share market investment feels risky. But I’ve noticed those who have social connections with higher ups in the broker house earn a so-so / good income from investing in share market.
Looking for new ideas, approach , outlooks on money making .
I’m 25.
15 comments
10% of your salary pre tax should be invested every month. Your lifestyle should be adapted to make that possible. If you cannot due to living costs being too high try to find a location with lower costs or increase your income options. If neither is possible, I have no idea what you could do other than try to get educated through freely available information.
If you can invest that 10% for now a portion should absolutely go into physical gold as a hedge against the pretty unstable monetary system. Anything beyond that is up to your personal risk preference and goal – which you should at all times be keenly aware of.
And understand that the risk is 100% yours. Especially when you watch content online, if any of their tactics fail for you, they are not liable. So look where people have actually skin in the game. If someone is not betting their life savings on something – you shouldn’t either. If the CEO of a company has no shares of the company, don’t buy it (since the person who is supposed to know it best isn’t willing to do so).
It is worth remembering that huge nominal gains require huge capital being put on the table. Usually steady investing with a portfolio that has a good risk management will perform much better than most investors ever will – Investing is NOT a casino unless you treat it like it. And if you do, the house wins.
I’m no genius….. But do not get sucked to buying new toys to keep up with the Jones’s. The housing market is taking a dive. You’d be smart to buy property in areas that will have a future and don’t worry about the interest rates. You can always refinance. I spent most of my 20s chasing women, drinking and buying shit that I know I didn’t need. Since then, I’ve quit drinking, workout regularly, eat healthy and try to get decent sleep. I know it sounds boring but everything else seems to fall into place. Your mental health will thank you.
My approach is high risk high reward. I have the rest of my life to make money so I am taking risks to make more money to live comfortably.
Gambling with crypto, betting on sports, reselling clothes/shoes etc. There is luck involved but you can increase your chances of success with research. So far it has worked out for me. I’ll be investing my profits in a proper more responsible/reliable way once I deem fit.
Cut spending as much as you can stand.
Invest in index funds and blue chip stocks and hoooooold!
Also build your credit score
My money philosophy is based on following fundamentals.
1. You always have two jobs.
Working for your present self (food on your table, roof over head, some fun). And work for your future self (better future, dreams, risks, retirement).
2. The most valuable thing you can buy with money is financial security.
3. Stuff gets old. And require maintenance. If you plan to buy happiness by having stuff, expect having to keep making money forever to replace stuff when they get old and also to buy new fsncy stuff.
4. Memories never get old. Therefore, every time you gain a good memory, you are rich by that much forever. It makes more sense to use fun money to buy experiences than stuff.
What you should do depends on your income level.
If you are a student or low income, your goal must be to avoid getting into debt as much as possible and work on improving your income earning potential.
At 25, the most important investments you should be doing is investing in yourself.
Once you are into a good income stream, the most important thing to do is to not base your expenses on your income. Instead, spend on what you need and have a sufficient fun budget and a growth/education budget.
This will help you to avoid lifestyle creep as your income grows over the years, and the income growth should be used for increasing savings percentage and investments.
A few books you can read:
Ruch Dad, Poor Dad (There is a 3 boook series).
Millionear Next-door.
Richest Man in Babylon.
https://youtu.be/yNxPVj0hejg
There are two avenues you can go down. One where you chase the dollar or one where you try to do all the work yourself.
If you learn how to do things yourself then you won’t spend a lot of money which cuts your expenses. I’m talking from basic stuff (changing out locks on your doors) to something moderately difficult (remodeling a room) to something a bit more skilled (roofing a house).
There are a lot of videos out there that help walk you though something online. Those skills might be helpful in the future if/when the economy/government falls. The more skills you know the better.
Take advantage of investing in your 401k. Especially make sure you get full match from your company if you can
Be very careful with credit and long term buy now pay later things.
If you are going to do a buy now pay later / pay in 4, only have one going at a time.
It’s very easy to get over your head. Don’t ask me how I know.
>Eat half in youth, and save half. The savings of youth are the means of old age.”
*You will never, ever, save your way to wealth. It must be created.*
What’s missed here is that those savings need to be used as capital for ventures and investments. Currently, you need more than just your usual retirement plans, more than just a pension or RRSP/401K/etc. You need to have multiple streams of income across multiple industries that perform better than the rate of inflation + the cost of maintenance.
Get into rooms with people who go in on apartmemt complexes, strip malls, developments, crude, etc. And show that you provide value and can bring funds and go in on projects with them.
You can also invest in indexes, futures, securities, etc. They require more different research, and you need to diversify your investments again, as with all things here. You can do this through almost any bank and 3rd party brokerages/wealth management groups.
Start a small business if you are able to have the time. Turn something you are passionate about or good at into a way to generate revenue. Lots of banks have programs and preferential rates for small businesses.
Now you can also watch what you spend your money on.
>So far, I’ve been just saving half of my money(tuition income as a student , job income) in bank account. (the bank which gives highest interest rate in my country)
A bank account is not a place to save or store money. It is a place that let’s you access your fund at any branch they service without needing to carry your wealth around with you. Don’t treat it like a place to grow your wealth.
>The rest I spend on hobbies , other necessary costs etc.
The point I’m about to make has and will get people upset, but at 25, you probably shouldn’t be pursuing a number of hobbies. Have one, sure, that’s great! You could do two even, but one one should have a repetitious cost associated with it. If you’re splitting your time between two hobbies that you’re spending on, you end up doubling your budget and spend less time with the one that more deeply affects your happiness.
Even if you disagree with my last point, eventually you won’t have the time for both either, so may as well start now and make that money work for you sooner than later.
>Other part says, “Life is short, enjoy it.”
Life is short, and you most certainly enjoy it. You’ve got the rest of your life ahead of you, and because of that fact, you should work harder to set yourself up now when it’s easier for you to take risks and recover than when you’re 45 with a mortgage and kids.
Those trips to Thailand, Ibiza, Monaco, and the Dominican all your classmates are going on are kneecapping themselves in the pursuit of “finding themselves” or “trying to live life”.
You can do that, but I’d recommend putting the work in and becoming functionally retired in your 30s/40s than actually retiring in your 70s after you’ve worked your body to the brink.
When you get a fancy redundancy payment at 19 don’t blow it on your dream car. You will soon find that you can’t afford to run it
If you have no financial responsibilities, find a hobby of an activity you enjoy and spend some money on it. Become better at it, refine your skills. You never know. It may end up providing for you in the future.
pick a better zip code to be born in
Pay yourself first, start saving NOW, not when you are 50, and I would put it in an IRA. If your job has a matching 401k, contribute up to the point that they don’t match – that’s free money.