1. Start Investing
A Bankrate.com survey has found that 30% of Millennials believe that the best way to save money is by keeping it in cash. This means that the stock market is not an option or that they are not actively thinking about investing in the stock market. The survey later then found that only 8.6% of respondents found that the stock market was the best way to preserve money over a long period of time. In fact, if you google ‘millennials and money’ the chances are that you will find that majority of the articles are negative when it comes to millennial finances and participation in investing
There can be many reasons for why we do not invest – lack of knowledge, being caught up with luxuries, food. But in your 20s, you have to get extremely serious amount your finances. You must become a guru with finances; this is the equivalent of learning how to read and write as an adolescent. Therefore, you must learn the different places you can place your money and have it work for you. The people who do not know about this will unfortunately continue to give their time for money. We all have to work, and that is a given but do you want to work forever? Do you believe that you were just put on this Earth to eat, sleep, pay bills and die? I do not believe that is so. Investing your money is the first step you can take to ensure that you are not living for nothing.
2. Allocate your Finances
This is my favorite and most helpful tip that you can implement in your life right now! I read about this tip in the book, The Richest Man in Babylon by George S. Clason. The trick, and I promise it works, is to keep 10% of all the money you make. This is my strategy:
70% of my income goes to expenses (bills, food, gas, etc.)
10% goes to myself – I pay myself for all the hard work I’ve done before paying anyone else. This is the most important aspect of allocating your finances and honestly, you owe it to yourself. This money is your savings.
10% of my income goes to investing (stocks, bonds, bitcoin – keep in mind that bitcoin is gambling in a way, and I do not recommended investing a lot of money into it)
The last 10% goes to charity – people who cannot work for themselves or churches.
Honestly you can switch this up as much as you want. You can pay yourself more than 10% but never less than 10% (very important!). You do not have to give 10% to charity but on your way up to being wealthy and well off with money, it is nice to help somebody else out along the way. The two parts that should not be changed, meaning decreasing the percentage of, are the 70% going to expenses and the 10% going to yourself. Be sure to always invest a certain portion, also very important.
3. Become a Student of Money
I believe we can all grow money trees. But how can you plant one if you know nothing about the roots of money. How can we grow this tree forever and have unlimited income? To learn this you have to read books on finances and taking online courses and asking questions to people who have mastered money. This is significant because money is a wide and dynamic topic and changes constantly so you have to keep up with it. You have to understand money in order to get rid of your old habits and views of money.
You can look at this post: 3 Ways to Generate $1,000 or More Online to get some ideas on things I do to make some side income. When you become a student you quickly learn that one source of income is unhealthy for your finances. You must have multiple sources of incomes; you also have to be able to make money while you are asleep. Many of the ways you can make passive income is just a click away on Google or in an online course that is inexpensive. You just have to take the first step and fight to get what you deserve.
This all starts now in your 20s. What a time to be alive.