Do you have what it takes to build wealth in your 20s? That depends.
However, the answer depends less on your intelligence and skills, and more on your discipline and understanding of how wealth is built.
In this article, I’ll talk about the mindset and some important intangible traits that will help you become wealthy.
When you were even younger than you are now, your vision for the future probably included:
- Making your own schedule while working on things you’re passionate about
- Having enough wealth to travel and never worry about necessities
- Enjoying the free time necessary to find true purpose in life
With the pressures of rising tuition, rent, and hours at work, how does anyone find the time or money to build this life in their 20s?
One. Step. At. A. Time.
The life that I’m talking about is a life of financial independence, and not the kind where you inherit tons of money from some family business you know nothing about, either.
I’m talking about establishing multiple streams of passive income to support the lifestyle of your choosing.
Most people never get there because building wealth isn’t taught in the public educational system. The good news is that you’re capable of achieving this lifestyle if you reprogram yourself to look past the things you are given and told.
Financial independence takes money, and money comes from the value you provide to others. Can you build wealth and start becoming financially independent in your 20s? Let’s find out:
Can you think outside the box?
Uncommon people get uncommon results.
There are more than enough people in the world living their lives on autopilot, completely basing their opinions, decisions, and thoughts on what other people believe.
Don’t follow the crowd!
To build wealth, you must think critically and capitalize on opportunities that others don’t see or are too comfortable to pursue.
Now, there are certainly conventional ways to build wealth, like saving a large portion of your income and investing in index funds. In fact, that is one of the easiest ways to retire early.
Unfortunately, most of society is busy consuming wealth instead of building it. Are you disciplined enough to delay gratification, or do you need a new wardrobe every six months?
A more aggressive wealth strategy is to create businesses and side hustles. These are more work up front, but they can pay you handsomely down the road.
There are all types of businesses providing services that didn’t exist until they came along. If you listen to people’s problems and keep an open mind about the solutions, you’ve got the recipe for success.
Many people make the mistake of delaying when to act on their ideas because it takes them out of their comfort zone. There’s comfort in continuity, but aren’t you trying to change your life for the better?
The good things is that the business world is constantly changing, which means that as the problems change, the opportunities change. If you see an opportunity, trust your instincts and put them into action.
If you want to build wealth in your 20s, it’s the perfect time for trial and error.
You don’t need to become the next great inventor. Just keep in mind that sometimes, becoming wealthy and financially independent is about working smarter, not harder.
Will you invest in yourself?
The fact that you’re financially aware and want to build wealth is fantastic. However, curiosity and responsibility won’t be enough to guarantee success.
In an ever-changing world, it’s important to keep adding to your skill set. Learning new skills will help advance your career, increase your income, and make you more versatile should a career-changing setback arise.
The question is, how will you invest in yourself?
Well, the possibilities are truly endless. In your free time, you can attend investing classes, a real estate seminars, or writing workshops. Let’s say you’re interested in marketing – polish up that resume and get an internship at a marketing firm!
To stay on top of your game, keep reinventing yourself. The worst thing that can happen is you become far more interesting to talk to.
Can you stick to the game plan?
To live a life where work takes a back seat to leisure, you need to:
- Make money
- Put processes in place where your money works for you
- Develop a game plan for managing your expenses so that you’re able to build or maintain your wealth
- Actually stick to the game plan
You’ll work long nights; you’ll throw away completed projects and start over, and you’ll wonder if your friends still like you anymore.
Understand that you’ll be breaking the mold. Pain is a necessary part of the growth process, and your success hinges upon your ability to turn your struggle into a positive.
Be prepared to face criticism from anyone with a pulse and an opinion. People love to come up with reasons why something won’t work, and it’s your job to decide whether they’re someone worth listening to.
On the flip side, you’ll benefit greatly from the support of people you can trust to have your best interest in mind. These people won’t shoot down your ideas – they’ll ask questions to help you develop the idea fully.
Life can come at you fast and it’s difficult when it seems like you’re turning it away. However, you need to be mentally prepared to make sacrifices in order to achieve your goals.
Are you OK with missing out on happy hour specials so you can develop your future earnings? Will it stress you out to live below your means? These dilemmas are especially hard to deal with in your 20s, but you have time on your side, which is vital for wealth.
There’s no denying the fact that image can be important, especially for young people; there’s a reason why I do 250 calf raises each morning.
The path to financial independence doesn’t mean you’ll be “keeping up with the Jones’”. What truly matters is staying focused on what’s important so your finances keep up with your dreams and needs.
Being consistent enough to build wealth in your 20s is difficult, but it’s easier with a plan in place.
Can you adapt to change?
A great plan always has a great backup option, especially when it comes to your wealth.
When you build passive income by starting a business or investing in real estate or stocks, you put your money at risk. What if your business starts failing? What if the stock market goes belly up?
It’s always sensible to keep a worst-case scenario in mind so that you can best prepare yourself to stay afloat during difficult times.
Blockbuster was a retail movie and video rental shop that was founded in 1985 and ultimately went bankrupt in 2013. Despite great success in the 1990s and early 2000s, competition from video-on-demand companies like Netflix spelled its doom.
Unfortunately for Blockbuster, the market moved in a new direction; People didn’t want to drive to a store to pick up and return their DVDs anymore, and while Netflix didn’t have retail locations (they started with mail delivery), they also didn’t charge late fees.
Blockbuster made a lot of their money on these late fees, and they were too slow to adjust to new consumer preferences.
If you’re lucky enough to enjoy wealth, this is a cautionary tale of success. The world never stops changing, so neither should you. You will be most successful if you can establish various options for increasing and maintaining your net worth, because you never know when you’ll need them.
If you’ve read this far, you now understand a bit more about the mindset behind building wealth. Can you become financially independent? There’s no doubt in my mind – how about yours? Leave your thoughts in the comments below.
Home at 30 is your one-stop-shop for learning about building your brand, career, and wealth on your way to financial independence. Check out the website and discuss these things with your friends. It takes a village!
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Josh Ramos
Josh attended Wake Forest University and paid a fortune for it. Since then, he’s realized the obstacles that Americans face in moving up on the ladder of wealth. By founding Home at 30, he wants to help students learn the skills necessary for taking the next step on their journey to building wealth.