- credit card debt is an emergency and optimizing any other money stuff while you carry it is like rearranging your sock drawer while your house is on fire<p>- save 25x your annual spending and never work again<p>- start by saving at least something (even 1%) and save 50% of all future raises<p>- long commutes are for fools. So are new cars--buy used.<p>- spend on things that you value. I've given myself a tech budget for years because good tools matter to me<p>- host a dinner party instead of eating out (most of the time)<p>- If you have a gamblers mindset to investing, carve out a small portion (10%?) of your money and use it for risky investing. I call mine the 'casino fund'. Track your returns.<p>- read voraciously about finance and early retirement. You only need about 20 books or so to gain a background that is easily more valuable than your college degree. This is a good start:
<a href="https://www.reddit.com/r/financialindependence/wiki/books" rel="nofollow">https://www.reddit.com/r/financialindependence/wiki/books</a>
Don't leave disposable income hanging around as savings in a no/low interest bank account. Invest it in an index fund with low fees (Vanguard, etc.) or better yet, figure out an asset allocation and invest in a few accumulating funds.<p>A good piece of advice I picked up from Rami Sethi (when it was still worthwhile reading his blog) was think about how much of your free time per month do you spend on various activities (Facebook, Gaming, etc). How much of that free time is devoted to thinking about your personal finance? If it's less than you think you should be doing, schedule it in.<p>Also starting reading <a href="https://www.reddit.com/r/personalfinance/" rel="nofollow">https://www.reddit.com/r/personalfinance/</a> regularly.
Marry well.
What I mean is this:<p>Your spouse should have a career or should think of having a career of his/her own. Its not about having a lot of money, its to eventually have someone as a financial backup in case things go wrong. Works for both partners.<p>I love my wife but financially I am in trouble. I make enough money but she has no career aspirations. Her family is quite poor and I had to get mortgage for a house for her parents. In future I will also need to worry about their health expenses.<p>This effectively means I can never get out of the rat race.
I'm only 30, so it's not like 25 was particularly long ago for me. But since then, I've gotten married, which is a major life change (overall for the better for me!).<p>But if I could go back to age 25, before I was married, I'd have told myself to travel to more far-flung places. Being married, I have to:<p>A) Agree with my wife on where we want to travel<p>B) Have time to travel that works for both of our schedules (which is difficult to find... plus we have to spend at least some of our time off going to visit our respective families, and now I have two families to visit instead of one)<p>C) Have the money to travel. In our case, we have two incomes, but still, it was much cheaper when I'd travel with friends and cram four people into a cheap hotel room.<p>I'm not complaining here. I'm fortunate to have spare income that let's me travel quite a bit with my wife and it's really a fantastic experience to travel with your partner. But there are trade-offs that I simply didn't have as a 25 year old. So those places that are far away and hard to get to? See them while you're young.
Have enough in savings to walk away whenever you want. I've been stuck in jobs far longer than I wanted because I'd neglected my emergency fund and didn't have the cash on hand to walk away.<p>Now I make sure I have a year's living expenses available outside of my investments. If I get tired of my job, I can just quit knowing that I have the cash to float myself for a while.<p>A year may be more than you need but at least six months is a good minimum. You'll have the cash to cover a job loss, car troubles, most medical expenses, etc. on hand without going into debt. And an emergency fund should be liquid and save, not invested and at risk. You may only get 1% in a savings account but view the low returns as the cost of insurance, since that's effectively what an emergency fund is—self-insurance.
People.<p>Meet and keep in touch with as many people as possible. Switch jobs, travel the world, volunteer and always _always_ make new connections.<p>The best financial (and personal) gains you will make in life will come from the right connections.
I reckon I got most things right, but as this is specifically "what would you have done differently, what lessons have you learned?" the big one for me is: don't invest in individual stocks, invest in broad (ideally low fee, e.g. passively managed) funds instead. Growing up in an era of privatisation, reading the financial press with all their information on individual companies, seeing all the stock market pundits with their various stock picks, and so on, buying individual stocks just seemed to be "the thing to do". But at the end of the day, unless you spend an enormous amount of time on it, you are very unlikely to be able to out-perform the market. In my case there were many bad investments I could arguably have avoided, e.g. all the dot com stocks I bought on 15 March 2000 and banking stocks I bought on 25 April 2008. But I did buy a lot of BP shares on 15 April 2010 (5 days before the Deepwater Horizon explosion), and I don't think any expert could have foreseen that. Individual stocks are far more of a gamble than funds.
I'm not 25 yet but this is my (current) course:<p>1. Reduce all bills/belongings to bare essentials to live minimally.<p>2. Pay off all debt while maintaining $1,500 emergency fund.<p>3. Save 6 months living expenses.<p>4. Invest in yourself with excellent groceries, gym membership/local park visits, medical/hygiene care and other healthy habits.<p>5. Invest in Vanguard's Total US Stock, Total International Stock and Total Bond ETFs (% as age) and don't touch it.<p>6. Invest in building your own business - tech or otherwise.
I travelled a lot and figured out very soon I should never ever contract dept or have a strong commitment (house, children, etc) too soon. I'm still amazed so many people regret doing that, being young don't mean being dumb, why did you do that?<p>Anyway, my advice would be:<p>Start meditation sooner.<p>I would give myself many other advices about risks, people and self-acceptance, but I would have not being able to listen to them at that time.<p>That's the problem with advices, you must be in a place in your life where you can actually use them.<p>But I would be able to meditate and figure it out, since that's how it happened.<p>Replace that with any tool that helped you develop yourself.<p>If you don't have such a tool, find one quickly that suit you.<p>Oh, and yes, travelling help, so do so. But you'll reach a limit in what it brings to the table. You need to find a better tool on the long run. Just like money helps, but has a max amount after which it won't make you happier.
First, don't get married.<p>If you can manage to get that one done, you can actually act on the rest of the financial advice in this thread. If not, you will have to be in unanimous agreement to do anything wise with money (i.e. keep emergency fund, plus six months living expenses in liquid savings), whereas foolishness may be undertaken unilaterally.
Do not go out and buy <sports car> and proceed to spend <stupid amount> of money on it trying to make it cool/fast when you are 22. And then immediately after that do it again with another car. You could almost buy a house.
Eat out less (the value for money is extremely poor in the UK)<p>Contribute more to an index fund.<p>Save harder for a deposit. High rent/shared housing is horrible.<p>Don't try to keep up with the Joneses. There'll always be someone richer, with a nicer car – you can't win that game. You weren't born in to money, don't even attempt to act like it. Live below your means.<p>You need to treat yourself far less often than marketing companies would have you believe.
"You dont need to spend $50 on that video game. Or that one. Or that one. Actually, just give me your wallet, you can have it back in 10 years."<p>Also, start mining bitcoin.
In Italy there is (was, as it is not much used anymore) proverb:
"Fare i conti spesso, moderar le voglie, spender men di quel che si raccoglie".<p>It cannot be translated easily, but more or less it amounts to:<p>Do the (financial) math often, limit your cravings, spend less than you can gather.
I'm a little late to this but this might help you. I'm an Indian, but I assume you are in the US. Having spent some time in the US this is what I would advice:<p>- Go get yourself a savings account and a checking account. Fill only enough amount in your checking account that you need to get by the month. Remaining goes into savings.<p>- Buy a home as quickly as you can, in an affordable place in the outskirts. By the time your kids arrive necessary infrastructure will be in place. Also rent is just another form of tax. And having your own home also means some place to rest without financial implication when you are old.<p>- Take the 401K plan seriously.<p>- Max out other instruments such as the IRA and Roth IRA.<p>- Buy a durable, long lasting car. And stick with that as long as it lasts.<p>- Healthy life style. Nothing pays as well as good health. Buy a bicycle or play a sport. Ensure your heart is healthy and you are not obese. There are other things to this, like learning to cook healthy food. Remember bad health too will account for a big chunk of your earnings in a place like the US.<p>- Be frugal. Frugality means making decisions that pay on the longer run. $5 may buy you burger combo in McD but trust me it will cost you on the longer run. You don't want that kind of frugality. Which is why the learning how to cook makes even more sense on the longer run.<p>- Be productive, in all ages. Have free time to network and develop new skills. Never be afraid to start from the beginning or learn and do something new.<p>- Lastly save. Save a lot.
Take as many risks as you can now otherwise you'll be maxed out in terms of income for the rest of your life. You're young and can live for cheap. Startups, businesses, etc. Don't get trapped in the W2 lifestyle and big corporates.
I think about 25 was when was on the cusp of a series of job moves/promotions in the next 5 years. I would imagine a lot of 25yo might be in the same spot (or not - whatever this is my anecdote).<p>Keep your cost of living the same when you see large pay bumps or raises. This means the big things like car, house/rental, etc. Don't just go get a new car and increase your spending or move to a "nicer" apartment or buy a house because you have the money available. Keep the car, stay in the apartment and save the extra money.<p>People will stay that owning a home is an investment - maybe in some areas it is - but not all. If home values are relatively flat in that area or grow very slowly then it is a losing proposition. You will be paying property taxes, school taxes and all the other "taxes" of owning a home: maintenance, repairs, accumulating "stuff" to fill it, etc. If the growth in that area is slow then that is all money down the drain - you won't get it back when you sell.
Every time you treat yourself, with a fine bottle of wine, or a nice sofa, or a great suit, you develop your appetite for "nice" things.<p>The more money you make, the more nice things you acquire, and the harder it is to imagine living without them. At the furthest reach, it's a private jet--the crack cocaine of travel.<p>Develop these appetites with great caution.
<i>Scratches his head mumbling</i> What kind of financial advice can I give to some one that has no job...?<p>Oh yeah, you don't need to save that internship money, I'm good now. Besides, I make like 5-6 times what you are making.
Read up on finance, learn about assets vs liabilities.<p>Understand buying vs renting before doing either.<p>Keep monthly (recurring) expenses low.<p>If you absolutely need a car, keep your ego in check and look at mileage & reliability.<p>Think long term.
- If a decision comes down to either not having enough time or not having enough money, rest assure there will never be a sweet-spot where you will have both.<p>- Always take into consideration mental health cost. Your commute, your work, the people you choose to surround yourself with. Debt in this area is unpredictable and therefore dangerous in the long run.<p>- No one has it figured out. Youth will always be wasted by the youth.<p>Good luck.
Don't get into consumer credit debt. Not huge figures, but I'd convinced myself that I would always have debt so I might as well not care about it. This led to my buying things I didn't really need on credit, whilst just paying for it monthly, forever.
A subreddit I highly recommend (depending on your goals) <a href="http://www.reddit.com/r/financialindependence" rel="nofollow">http://www.reddit.com/r/financialindependence</a>
Don't buy so much stuff, it's mostly junk that'll sit in a box somewhere. When contemplating a purchase, honestly ask yourself how much use it will get, and for how long it will be useful.<p>Rent. Home ownership only starts making sense on a 5+ year time frame, in some markets 10+ years. Having the ability to move for a better job will reap huge financial benefits, and moving for a short commute will allow you to have so much more free time.<p>Save vigorously, but not so much that you have a dreadful life now, pining for the future when things will get better once you have "retirement money."
Max out your annual IRA contributions you idiot. Don't break the glass unless it is to travel or be with family. Set up YNAB so you aren't kidding yourself with rotating card spending. Cap your bar budget.
You're asking the wrong question.<p>What are your personal goals in the next 5, 10, 30 years? What do you plan on doing that requires money? How much money does that require?<p>Without knowing anything about your goals then any advice you will get (as demonstrated in this thread) will steer you toward structuring your life around saving money and getting safe but modest returns. Is that what you're asking for?<p>Here is a question you should ask yourself probably every 6 months:<p>"If I had infinite resources (money/whatever) what would I do?"<p>Take that answer and then figure out how to accomplish that without infinite resources.
1. Understand the basics of asset allocation, taxes and account types. Read Bernstein for primers on these.<p>2. Be highly skeptical of most of the financial services industry, especially those selling load funds, insurance, annuities, and who want to manage your money.<p>3. Enjoy simple cars, or no car if you can manage. The amount of money I've seen friends and family dump into vehicles over 25 years is staggering. I don't even see cars at this point. I don't care what others drive, and I don't care what I drive so long as it's reasonably comfortable, safe, economical.
Have fun! Often doing things that are actually fun are the cheapest - like buying an old wind-up record player and some 78s from the Salvation Army and having a picnic with your friends (or a date!)
If you are market timing, remember you have to be right twice, once when you buy and second when you sell.<p>Ideally, you'll come to realize that trading is a waste of your time, and you should set and forget a regular investment flow into the Wilshire 5000 or something equally diverse.<p>Lastly, don't let FOMO lure you into into investing in the new hotness of your age. For me, it was Internet stocks in 98-99. By the time you're hearing about it and it's productized in a way consumers can get involved, it's too late.
Index investing is great, but don't be afraid of taking risks for things you believe in. Actions where you put something at risk are those that truly show who you are. Constantly evaluate your emotions of fear and greed as to avoid falling into the trap of gambling or the trap of mindless following without the courage to think for yourself. Position yourself so that you either gain or learn from your risks. The only games that matter are those with your skin in the game.
If you're handy, and your housing market isn't super-hot right now (read: unaffordable), consider rentals. With the right tenants in a good market, it's quite passive income. And the build up of equity will provide a cash-out option later in life you may benefit from (if you choose to use it).<p>But don't rely on it, and don't overextend yourself. Traditional investment strategy is still a very good, solid one.
Good job on hitting the tuition free college jackpot. Keep paying off the rest of those loans, but don't stress out about it. Those will be paid soon enough, but get a credit card before they are. Keep being careful about what you're spending.<p>Move closer to your office. Even if the rent is a little more, the price is worth it if you don't have to use your car all the time.
(From a 57 yr old talking to his 25 yr old self)<p>If I had all the money lost from 'stock market corrections' on my investments, I could retire comfortably today.<p>Stop being a little fishy swimming with big fishies.<p>The interest paid today is a pittance compared to the risk. Save your after tax money in something with near zero risk until the interests rates rebound to make the reward worth the risk.
This might be dumb and I'm only 23 but if you live in an expensive city/area, get a roommate/SO/whatever for a year or so. Funnel all saved living expenses to loans/savings account. It's not as nice as being alone but man, it's a lot of money saved.
This seems relevant in a way: <a href="https://chrome.google.com/webstore/detail/pay-with-life/fmpbkddacnibdlnffgbjelegfcgnhdcm?hl=en-GB" rel="nofollow">https://chrome.google.com/webstore/detail/pay-with-life/fmpb...</a>
THere will be this thing called bitcoin -- you do everything you possibly can to buy up as much as you possibly can then you hold it till 2017... if you don't hold it or lose the wallet you'll want to commit suicide, so don't do that.
Save up as much as you can and put it into risk free investments. Wait until there is blood in the streets and put everything into the DAX/DOW/ whatever index or economy too big to fail. Sell out at 100% profit. Repeat.
Forget the money, so you can make enough of it doing what you love: <a href="https://www.youtube.com/watch?v=khOaAHK7efc" rel="nofollow">https://www.youtube.com/watch?v=khOaAHK7efc</a>
By the time I was 25 I already followed all the good advices listed in the comments here.<p>The only advices missing are predictions that are possible only with actually observing the future (e.g. buy GOOG/AAPL/AMZN).
Don't buy an expensive car. After a while all cars become a means that takes you from place A to place B. Save that money and invest it wisely somewhere else.
- save in stocks, not savings accounts or funds<p>- dont waste money on tv subscriptions<p>- play less videogames<p>- take greater care of your friends and relations
well im not really saving im investing in my own company.<p>Im building my start up ejgiftcards.com. Its generating revenue with about 20-30% margins. Current revenue is about 50-60k per month.
Uh, well it's the same advice I'd give somebody now:<p>1. Max out employer's 401k match.
2. Build emergency fund to 3-4 months expenses
3. Max out Roth IRA
4. Pay off low interest loans (if you have high-interest loans, which I don't/haven't then this becomes #1 and pay them off first).