Today, I am sharing the five money
mistakes that I made in my 20s so that you can avoid making those mistakes in your
twenties or even later in life, so you can become financially free even
sooner, because I know if I would have avoided these mistakes,
then I would have become financially free way before age thirty eight.
And I did do a few things right in my twenties.
A lot of videos like this will probably
tell you to stay out of student loan debt, which I did, and to keep your housing
costs really low, which I did, and to not buy a super expensive car
that you can't really afford, which I did, and make sure that you are keeping
a budget, keeping track of your money, which I did as well.
So while I recommend doing all of those
things, there are a few other things that I want to share with you that you may
have not heard yet that is really going to help you get your money in order and be
able to become financially free even earlier than you think I am.
Tiffany Thomas with Wealthy Tiffany Dotcom and I quit my nine to five job at age
thirty six and became a millionaire at age 40.
So if you want to do those things,
even at a younger age, make sure to hit that like button and hit
the subscribe button and we are going to dive right in.
All right. The first money mistake that I made was
not investing more in the stock market sooner.
This is one of the largest mistakes and I can't emphasize this point enough.
We need to be investing as much as possible as soon as possible because it's
going to make the biggest difference in our lives.
While I was contributing to my 401k and I was getting the match that my employer was
offering, I wasn't investing anything more.
I wasn't maxing out my 401k,
and I didn't set up a Roth IRA or even a traditional IRA in my 20s.
And I also didn't set up a brokerage account in my twenties either.
While I did invest some money,
it was not nearly as much as I could have been investing.
The more time we allow compound interest
to work for us, the more, more, more money we are going to have.
I want to share an example with what I'm talking about.
I just want to share this quick example with you.
I pulled up a compound interest calculator, and for this example,
we're going to say that I already have ten thousand dollars invested and I decide,
OK, I can afford to take two hundred dollars per paycheck,
which would be a total of four hundred dollars per month to invest.
And we're going to invest that over a period of 20 years.
So from when I was 20 until I turned 40
and we're going to use a 10 percent rate of return, which honestly,
I have gotten so much more than that on my stock market investments.
But 10 percent is a good place to start for the rate of return.
And if we had that money invested,
then our balance would be three hundred and seventy nine thousand six hundred
and twenty dollars, which means I could have easily bought
another property with this amount of money.
And you can take a look at this graph.
So all of the green portion is the compound interest.
That's the money that we are earning on the money that we put in.
So this blue area at the bottom is the money that we've put in.
So you can see how much more we have earned in compound interest.
You can see by leaving it in there as long
as possible, the more and more it will grow.
So it is so important to invest as much as possible, as early as possible.
And the second money mistake that I made
in my 20s was not investing more in real estate properties.
I bought my first property when I was
twenty five years old and I am so glad I bought.
Then I got two roommates to help cover the mortgage and I didn't end up
purchasing my next property until about 10 years later.
And I really wish I would have purchased that second property in my twenties
and my third and fourth property as well, because I also purchased those in my 30s.
But looking back,
if I would have purchased all of those properties while I was in my twenties,
I would have been financially free way, way sooner.
And I feel like real estate has made the biggest difference in helping me
achieve financial freedom, because by investing in those properties
and then putting renters in there, I'm able to create cash flow each month.
And that's what's covering my living expenses.
I've seen all of those properties increase in value over time dramatically.
And not only that, I've also increased prices over time.
I am able to have my renters cover the mortgage payment plus the payment if
there is one, the homeowners association payment and any expenses that I have
associated with each property plus have some extra left over.
So this is a really, really good setup.
And if you want to know the details on how I had purchased my
four properties, I do have a video about
that, so I will leave a link above and below in the description and you can
check that out after this video is over the third money mistake that I made
in my 20s was not really spending my money consciously.
I had a budget and I would take a look
at that and say, OK, I spent this much on utilities this month
and this much on gas and this much on food, whatever it was.
But it was more just a guideline for me so I could see what I was spending and then
think, OK, I could probably adjust here and there.
But I wasn't really clear on my priorities.
I wasn't spending my money very consciously.
I used to spend a lot of money on clothing and yes, I had a separate line item
in my budget for clothing and I really didn't need to do that.
I would go shopping with my girlfriends all the time.
We would do trips to Ross,
and while it was fun to get together with them, I spent a lot of money
on clothes that I did not need to be spending.
I did not need more clothes whatsoever.
And a little later in life, I really started to focus in on what
my priorities were and I started to spend my money more consciously.
So instead of having a budget for clothing, a high budget for clothing,
what I thought was high, I put that money toward a down payment
on another property because I started to see how effective investing really was.
And then if my money was working for me,
then I could eventually stop working for the money.
And there were things important to me in my twenties that I did spend money on.
I love to travel.
And so I took a lot of vacations and each
of those vacations I could afford, I saved my money so that I could take trips.
So that was one thing that I did right.
But I could have done that a lot better
because I was spending money on things that really weren't that important,
that weren't really going to bring me happiness or joy.
It would just be, oh, I have a new cute dress to wear to church.
And once I wear it a few times,
I was like, oh, maybe I'll buy another one and another.
And I really didn't need to do that.
It wasn't bringing me lasting joy.
And another thing that a lot of people say is to not eat out.
And I was actually pretty good at this.
I brought my lunch to work probably ninety nine percent of the time.
And if you're curious how I did that, I did create a video.
So I will leave a link above and below and you can check that out.
So I did have some priorities, but I feel like there was a lot of room
for me to get more clear on those priorities.
So I want you to just take a minute
and think about what your priorities really are.
And are you spending money on those priorities or are you not?
Are you spending on things that aren't
really bringing you lasting joy or happiness?
Because by getting this in order, by spending consciously,
you're going to be a happier person and you aren't going to have as many
regrets on spending money on certain things.
And to go along with this,
if there are things that you want to spend money on that you think would bring
that lasting joy or that happiness, then here is another way to look at this.
And I learned this concept from the book, Rich Dad, Poor Dad and I will leave a link
below in the description and you can check out that book if you want to.
I found it very, very helpful so you can actually think.
All right, well,
if I want to buy a Camaro, let's say, then what can I invest my money in right
now that will provide me with the cash to buy that Camaro later.
So start to think about what assets that you can accumulate right now,
not liabilities, things that are going to just take your money, but assets,
things that are going to grow your money, make your money work for you,
like investing in real estate or in the stock market.
Think about, OK, if I invest my money now in this certain fund in the stock market,
then that will grow over time and I will eventually have enough to buy my Camaro.
And that way you're not taking out a loan to pay for your Camaro.
That isn't going to create money for you, but you can still buy that Camaro.
It kind of becomes a fun little game.
You can play with yourself and you can think, all right.
Well, in five years, if I want to buy this certain thing, then I'm going to start
investing my money right now so that I can buy that thing and still buy something
else because I will still have money in my investments.
Money mistake number four that I made
in my twenties was being so risk averse, I was really scared to invest my money.
I loved saving it.
I had no problem putting it in my savings account.
But investing it seemed so risky to me.
And even when I did invest that money, like I said in my 401k,
I invested in things that weren't as risky as I could have been investing in.
And all that means is you have a little
bit higher risk, but that means your return can be.
As well, so I had some money in bonds and I didn't need that, I was young,
I was in my 20s, I didn't need that money right away.
So I really should have been investing in things that were riskier so that I
could have my money grow even more over time.
And not only was I risk adverse
with my investments, but also what I was doing with my life.
I was fine working a nine to five job,
working for someone else and collecting that paycheck every two weeks.
But really, I should have been focusing
on, OK, well, what's the skill that I can learn right now where I could create
a little extra income and eventually turn that into passive income?
And this could be something very simple.
I could have learned to code and make a little money on the side.
And the possibilities with this are pretty much endless.
You could start a coding class and learn how to code and make extra money
on the site and eventually turn that into your full time gig.
Or you could learn how to program
and build your own websites and start creating passive income from those.
And I've also heard of someone in the Choose FI,
Choose Financial Independence community who learned how to do Google ads.
And they had a Google had a free class on that.
So he took the class and started doing
a business doing Google ads, and that became very successful for him.
So there's just lots of little opportunities out there that if you're
willing to take a little bit of risk, then you can have a really high reward.
And I wish I would have started my YouTube
channel even earlier, but it made me a little nervous to put videos out there.
So I held off for a really long time.
But I'm glad I did eventually start
my YouTube channel so that I can share all of this content with you guys and try
to make a difference somewhere, take some risks that you wouldn't normally
take, especially while you're in your twenties.
You have so much more time to overcome
those mistakes that they end up being a mistake or you have so much time to grow
that money that you could be making and money.
Mistake number five, the last money mistake that I want
to share with you that I made in my twenties.
And this may not seem like it's directly
related to money, but I feel like it really is.
This one was not looking for mentors as much as I should have.
I had one mentor who was one of my friends who was really successful with real
estate, and he actually helped me by my first property.
I asked him a ton of questions and he's
not a real estate agent or anything like that.
But I had just seen his success and knew
that I could ask him questions and he would give me valuable answers.
And honestly, I wish I would have done this more.
I wish I would have taken more people
to lunch that were in spots where I wanted to be.
They had what I wanted.
And I feel like you can learn so much by just taking someone to lunch or meeting
up with them and just asking some questions about how they've created their
success and what mistakes they've made along the way,
what they would do differently and what advice they have for you.
And just being open to learning.
I feel like sometimes we might be afraid to approach someone that we see as so
successful and think, oh, they probably wouldn't have any time
for me, but if we don't reach out, then we don't know if they do or not.
One thing I love about life is that you can learn lessons from other people.
We don't have to make all of the mistakes
ourselves, which is one of the reasons why I'm sharing this video today so that you
can learn from my mistakes so that you don't have to make those mistakes.
And if you are seeking out people that are
in the spot where you want to be and you're asking them questions,
then you can get to where you want to be a lot faster and with a lot less mistakes.
So think about some friends that you might have that are in better situations than
you, that are really good at certain things that you want to be good at.
Or maybe your friend's parents are really
successful or there's business owners where you want to start your own business
and what they've already created their business in.
And when you're reaching out to people,
don't just take take take offer to buy them lunch or offer to be an unpaid intern
for them or offer to help them with something that you can help them with.
But start looking for people that are
further along where you want to be eventually.
Tell me in the comments, which one of these mistakes are you not going to make?
Or if you are already out of your twenties, which mistake did you make
that you regret the most so we can learn from one another?
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Thanks so much for watching.
I'll see you in the next video.