14 Money Mistakes to AVOID in Your 20's

Summary

This video script advises 20-somethings to avoid common financial pitfalls, emphasizing the importance of investing in oneself rather than overspending on status symbols. It suggests prioritizing learning and personal growth over immediate earnings, automating investments, and being mindful of spending habits. The speaker also stresses the value of surrounding oneself with supportive individuals, living in a conducive environment, and experiencing life-affirming adventures while in one's 20s.

Takeaways

• 📱 Avoid the temptation to overspend on status symbols like iPhones or luxury cars in your 20s, as they can lead to financial strain and don't impress those who truly matter.
• 🎓 Prioritize learning and education over immediate earnings; taking jobs for the sake of learning rather than just for the paycheck can set you up for long-term success.
• 💰 In your 20s, focus on investing in yourself and increasing your earning capacity rather than just saving money, which has a limited impact given the lower income at this stage.
• 🏦 Develop the habit of saving by setting aside money before spending, and invest it wisely rather than just letting it sit in a bank account.
• 🔒 Automate your investments and make it harder to spend on non-essential items to ensure that you're consistently investing in your future.
• 🛍️ Avoid impulse shopping and stick to a budget; having a clear list of what you need can prevent unnecessary spending.
• 🍽️ Consider the time value of cooking versus takeout; sometimes spending a bit more on food can save you time and effort better spent on personal growth.
• 👫 Choose your roommates and social circle wisely; being around people with similar goals can encourage and support your financial and personal growth.
• 🏠 Prioritize living in a convenient location that saves you time and resources, even if it costs a bit more, as the trade-off can be worth it for the lifestyle it supports.
• 🚶‍♂️ Model the right behaviors and habits from successful people, but understand that the sequence of their actions matters and what works for them may not work for you at your current stage.
• 🕰️ Measure the value of your money by considering how long it takes you to earn it, which can provide perspective on whether a purchase is worth the time spent working for it.
• 💹 Focus on saving and investing a portion of your income each month as a personal record and goal, rather than just trying to match your earnings.
• 🔍 Make it a daily habit to check your bank account to stay aware of your financial situation and to confront any issues head-on.
• 🌄 It's okay to spend money on unique, once-in-a-lifetime experiences during your 20s that you will remember and cherish later in life.

Q & A

What is the main advice given against buying an iPhone in the script?

The script advises against buying an iPhone in favor of an Android because it suggests focusing on not overspending on status symbols in one's 20s, which can lead to financial mistakes.

Why is it suggested that people in their 20s should not overspend on status symbols like a Lamborghini?

The script argues that the people who matter are not impressed by such displays of wealth, and that those who are ahead financially want to see others learning and hustling, not spending recklessly to impress peers.

What is the script's stance on taking jobs for the purpose of earning rather than learning?

The script advises against taking jobs solely for the purpose of earning money in one's 20s, as it's a time for learning and building skills that will increase earning potential in the long run.

Why is saving money in a traditional sense considered a mistake according to the script?

The script suggests that instead of just saving money, individuals in their 20s should invest in themselves and their earning capacity, as the potential for increasing income far outweighs the benefits of traditional saving.

What is the recommended approach to handling money in one's 20s as suggested by the script?

The script recommends prioritizing investment in oneself, automating the investing process, and manualizing the spending process to ensure that money is allocated towards learning and growth rather than unnecessary expenses.

Why is it advised not to go shopping without a specific purpose?

The script advises against aimless shopping as it often leads to wasteful spending. Instead, it promotes sticking to a budget and a pre-approved list of items to purchase.

What is the script's view on cooking versus taking out food in terms of financial sense?

The script suggests that once an individual makes more than a certain threshold per hour, it may be more financially sensible to take out food and save the time that could be spent earning money or investing in oneself.

Why is living with the wrong people considered a financial mistake in one's 20s?

The script argues that living with people who do not share the same goals or who may undermine one's ambitions can be detrimental to financial progress and should be avoided.

What is the importance of a micro-community according to the script?

The script emphasizes the importance of living in a convenient location that is close to necessary amenities and work to save time and money, even if it means paying a premium for the location.

Why should one not model the wrong season of life according to the script?

The script advises against trying to replicate the lifestyle of someone who is further along in their career before having the necessary track record and reputation, as it can lead to financial missteps and a lack of authenticity.

What is the script's advice on measuring financial success in one's 20s?

The script suggests measuring financial success by how much one is able to save and invest in oneself each month, rather than focusing on the income earned.

Why is it recommended to check one's bank account every morning according to the script?

The script recommends this practice as a way to confront financial reality and gain a better understanding of one's spending and saving habits, which can lead to improved financial management.

What does the script say about spending money on one-time experiences?

The script supports spending money on unique, one-time experiences that are only possible during certain periods of life, as long as they are done in moderation and align with one's long-term goals.