There are some very important mistakes to avoid in your 20s.
Oh to be in your twenties how marvelous and fun and enjoyable it can be and should be however, there are so many pitfalls to not fall into financially in your 20s and here are a few mistakes that I've made and many others have made worn from my experience. Don't make mistakes and be better. Here we go.
The first one is not knowing precisely what you want in life. And the cure to this is knowing exactly pinpoint what you want to accomplish be and become in this life. Oh man, this is crazy. Recently. I ask somebody. Why did you marry your spouse? And usually that the answer. As with about how they how they act who they are their character traits what they do for them things like that, right?
When I asked why did you marry your spouse the answer was?
crickets, absolutely nothing. Wow, now it's bring it even a little more to home. If I were to ask you tell me exactly the lifestyle. You want to live on a day-to-day. What is it? if the answer is. Crickets, then I would encourage you to figure that out and really spend some time figuring out what you desire because we don't know you're going to hop in the car with somebody else and they're going to drive you around your whole entire life.
And at the end you're going to resent people and you are going to regret my thing in life is to not regret anything. So again, the driver seat here is my positively. Perfect life the life that I want exercising every single day receiving monthly rents from Real Estate. Living in the smallest structure possible, which I am doing currently.
Choosing who when where how and why I spend my time not having to answer to something to someone. And infusing positivity wherever I go in every single environment and reaching encouraging and empowering others every single day in every single situation and that can only be done if I work on myself all the time every single day.
I'm a definite work in progress. That's for sure. So that's mine. What's yours? You can be the type of car. You want to drive type of home you want to own but those are just physical things those can burn down people think those things can be destroyed. So I'd encourage you to make it a little more under the surface like mine is infusing positivity and everybody and helping people achieve their full potential, but what's yours?
That's the question and figuring out the answer sometimes takes a lifetime, but nonetheless, it's a really really enjoyable journey, and I'm very happy. I'm on. Next mistake being ignorant. and not managing money effectively Jim Rohn the great Jim Rohn great late, Jim Rohn rest in peace always said ignorance is not Bliss what you do what you don't know can hurt you and quote and I'll even end a little bit can hurt you and.
Potentially and most likely will hurt you ignorance is not a good thing to become an absolute expert in the difference between necessity want and desire. I need to eat every single day. I want to have to pull a every single day to the difference there. I can't eat rice and beans. Which doesn't taste as good as Chipotle, but it accomplishes the same feet of satiating myself.
So you got to break it down between what you need and what you want and that my friends is very difficult, but very worthwhile over the trajectory and long-term of your life next mistake procrastinating and sinking funds. And no, I'm not talking about the Titanic here. I'm talking about a known expense that you prepare for in the future.
So for instance, if you plan on buying a vehicle in the next 3 years, let's say then you stay up a certain amount every single month putting into a fun. So when your vehicle is ready to be replaced by it another example buying pretty much anything, you know, you're going to need this is not for something like food.
You don't do Sinking funds for. You know unless you're going out for like a special meal or something and you can put money aside the putting a certain amount every single month preparing for when these things happen like home repair. I pretty much know every single year. I'm going to have to spend about 2000 to 2500 dollars a year on repairing maintaining doing something to the home.
So every single month 200 bucks goes right into the account. I don't touch it. However. I don't need the stress about it because now I know when there's something needed paint anything. I don't care what it is. I'm ready for it. And there's no reason to be stressed out about it next mistake not having a plan be financially thinking that the best case scenario is going to happen newsflash.
It usually doesn't and that would be having an emergency fund an emergency does not mean vacation. Very different. Go back a step. That's a sinking fund. If you want to stay for a vacation. This is an emergency fund. You're murdering. Her car goes out. Someone smashes one of your windows something of an intern actual emergency.
The real simple calculation here is to add all your fixed costs all your variable costs. Multiply them I get them onto a monthly. I do still do a 12-month average. So add every the last 12 months up to my by 12 figure out where your average is now multiply that by between three and six depends upon how safe you want to feel I usually do about four or five months just to be prepared in case something drastic were to happen to my life.
Let's say it's $6,000. for instance. For three months of your life. Well, now you have a goal to $6,000 and prioritize all of your decisions until that is fully funded that will make you have a safety net and make you feel way more app to make risks and make decisions that you wouldn't usually make when you're in a survival mode.
We're going from survival mode to thriving thriving is a lot better place to be and yes, that might mean that going out a couple weekends that might mean not buying a super expensive gift for someone's wedding. These are decisions. You have to make again needs desires and wants which one is it figure it out and make the appropriate decision and prioritize what your future self wants not just what you want right this moment.
Because if I did everything I want want to read this moment. You guys it would not be a good thing. Next mistake is looking at the dollars and sense of everything always looking at the financial perspective. Yes. It's a mistake because not everything. We do can be knocked up and scratched up to Dollars and cents to money to how much it costs.
There are some things in life that. Money should not be in the equation. They say that and you're probably like why Max you just said last time, you know, get your budget, right? Yes. Get your butt. Right but does that does not mean you have to stop or eliminate everything that's enjoyable or really necessary in life.
It's simply means to look at the little more prudently like myself. For instance. I spent over $100 a month to go to what people would probably call a luxurious Jim. Yes, it is very very nice. They have tell service. They're warm towels. It's nice. There's a massage parlor in sight and hair studio in the gym.
Like that's awesome. It is and that's something I don't look at complete economically because I could probably go to a $15 a month him and get the same workout. However, not everything can be edited dollars and cents the high and the emotional and mental and physical. Benefits I have from going to this place far outweighs the cost and it probably could find a less expensive Jim and I have been a part of os.
It's less expensive gym. Here's the thing. I'm being consistent and I committed myself to exercising often and that's preventative maintenance. That's actually going to save me in the long run for health care. Hopefully hopefully hopefully there's no bus that it's me next week. However, I'm doing my best to have preventive care and preparing for the future because I think when I live a long time as I say that who knows.
Appropriate preventive care is so much better than reactive care reactionary stuff just doesn't work and you have to really discriminate on what you believe is a good value and what you actually want to more or less put your blinders on when it comes to finance because I put my blinders on and actually is a very very good.
To the gym, I go tell you got to figure out which ones and what things in your life are worth more than economic value. Next mistake is going hands off and letting someone else handle your retirement accounts. I've had this conversation so many times. So tell me about your retirement accounts, you know, that's a financial coach perspective and people usually say, oh my employer takes care of that and I what I think of my head does that mean the employers investing in?
Crappy mutual funds does that mean they're investing in? And fill in the blank and they have no idea just not knowing is the issue if you know great at least you a little bit of autonomy over that but if you just told to go hands off. You're in trouble. So I'm really saying here take some agency take some responsibility on that because it really is your future.
We're talking about not your employer like for me for instance. I do not participate in the employer 401k and let me tell you why this is a very unpopular opinion. Most personal fan of people would say invest in the 401K get your free Match do the tax advantage plan. Great. I can go for that. I can definitely go for that.
Here's the thing though. Have you guys ever heard of depreciation Big D word? On real estate you can depreciate a certain amount of the purchase price of a piece of real estate every single year for a certain amount of years now. That takes away from taxable income which actually does the same exact thing as a 401k does.
So I'm just doing it from a different angle and I've never been a fan of things. I can't hold the things I can't touch now because I don't like them. Because I'm not extremely familiar and extremely well-educated about it. Do I understand how stocks and bonds work to an extent? I'm by no means an expert.
However, I know hell of a lot more about real estate and actual physical stuff. And that is what gets me really excited about finance and the cash flow that comes from Real Estate is something that is I believe a far greater investment over my trajectory personally my purse my trajectory because it's a monthly thing recurring over and over and over and over again.
I love the stock market. I love United States. I love the New York Stock Exchange. I love all of those. However. For my trajectory I've realized that this is my best way of Building Wealth in the future because at some point the home going to be paid off and guess what that is free cash flow coming in every single month.
And unless you have a really good dividend portfolio that does not happen and I'm receiving the cash flow while still being a depreciate the asset. That's the double whammy we're talking at all and that's why people who have owned a lot of real estate and unrealistic companies pay almost no tax they pay very little in taxes because they understand this depreciation thing and not many young people understand that they think there's only one way and that's through the stock market.
And I'm here to encourage you there are many Avenues and this is one that I have committed towards and the last point there is I'm very cynical when it comes to the stock market. There are too many corporate buyback programs. There are too many asset Bubbles. And yes real estate asset Bubbles as well.
However, if I hold on to real estate, I don't actually see those asset bubbles because I'm going to get back on back on the up permit some point. I just have a very little faith and when that stock market bubble ends up popping. Or crashing or whatever in the future in 2020 is going to happen. I feel very insulated by physical space literally and physically or figuratively and physically because I know this house is not going anywhere unless it burns down.
I guess anyway, I feel more comfortable here and then lastly in this is truly the most important. One out of everything I've talked about and that is not investing in yourself in your personal development. I read between two and four books a month. Now are they Jr. Token huge books know they're more so personal development self-help personal finance books that really helped my mind grow because the reality is if you don't invest in your own development, if you don't invest in your own learning, especially after college after University, Your brain becomes very dormant and your routine becomes very very stale is life.
Just about waking up going to work going home eating some dinner and waking up again. No life is so much greater than that and I encourage you to read often and daily one of my daily things as I read about 30 minutes or more every single day and it helps me learn something new because the reality is if you don't learn something new often,
In my opinion you begin to die. You begin to atrophy your brain and you know, I'm brain atrophy and this is the greatest gift you can give to the world yourself developing into the best version possible to Serve Yourself your family and your fellow man. Mankind your family and yourself when you can get all of those in unison.
Let me tell you. Life is quite sweet. And even when there are speed bumps when there are things that come into my path that are attempting to tear me. I have so much more resilience when I invest in myself often and for good amounts of time. It's not a two-minute self-care routine two minutes self-care routine to be better.
No stop stop with that. If something is important, we invest our time in it and I encourage you greatly to invest time in yourself, especially being young. Well, those are the mistakes that a lot of the lot of them I've made personally and I've seen myself. So I would encourage you to very much take those into account.
What have you guys done? What mistakes have you avoided in your 20s or what mistakes have you done and you want others to avoid again serving your fellow man that awesome time comment below make sure to like And subscribe to the channel and I will see you guys later making less mistakes. I hope.