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Practical Planning Tip: Financial Planning In Your 20s

May 02, 2024

Today we’re going to discuss “What financial advice I would give to someone in their 20s?”

 

So, there is plenty of advice I can give, but I will limit my comments to just a few short points.

 

There are two main pieces of advice. 1) Start saving while you are young. A long time horizon is the most important aspect of investing. If you start maxing out your 401(k) in your 20s and continue doing so for the next 4 to 5 decades of your career, it will lead you to be a wealthy person. And 2) Build your human capital: This essentially means positioning yourself to be able to make a good income as you progress throughout your career. This may require getting a degree or acquiring a skill set that you can actually use and skills that employers value. It means getting the proper work experience (even if that means taking a lower paid job early in your career). The ability to earn a decent income is THE most important aspect of your financial life that is rarely discussed. Life has lots of challenges. Many of them are directly or indirectly related to finances. Obsessing over optimal portfolios, fees, and a few percentage points in return is a waste of time. However, the ability to earn a livable wage will allow you to dig yourself out of many of life's predicaments.

 

I hope the youths of America heed this advice!


You can WATCH the full video here.