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What financial advice would you give to those in their early 20s?

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Chazooo
Chazooo
2 months ago

If married do not get divorced, THE worst financial move, unless your only alternative is jumping off a skyscraper.

Roboticus Aquarius
Roboticus Aquarius
4 months ago

I think this is my top 10 12:

  • Invest early (Insurance of any kind is not an investment.)
  • Invest often (see: Automate).
  • Utilize Roths if your annual income yields <10% marginal tax rate.
  • Keep your portfolio simple and diversified, with > 50% in Stocks. Use Index funds with low expense ratios.
  • Automate your savings (and expenses if reasonable).
  • Try to save at least 15% of every dollar earned.
  • Keep car costs low over the long run. (Think base car models.)
  • Rent for your housing needs if you will be moving often.
  • When you buy a house, buy the smallest house you could live in forever.
  • Don’t buy life insurance until someone else depends on your salary.
  • Your biggest asset is your own earning power. Automate your financial life so you can focus on this.
  • Avoid carrying a balance on your credit card.
Last edited 4 months ago by Roboticus Aquarius
Ram Suntha
Ram Suntha
4 months ago
  1. Automate (Your savings BEFORE spending)
  2. Invest your savings (Cash back from credit cards, Costco/Sam’s refunds, actively put away the amount on bills that say “You saved $xxx”, All refunds, since you’ve already spent it anyway
  3. Don’t forget to enjoy the thrill of seeing the savings grow.
Scrooge_McDuck88
Scrooge_McDuck88
4 months ago

Max out your IRA, or 401K, most “stuff” you buy you won’t like or need in a few years, invest in yourself, take your health seriously.

Last edited 4 months ago by Scrooge_McDuck88
Jeff
Jeff
7 days ago

Yes indeed

Rick Connor
Rick Connor
6 months ago

One of my favorite pieces of advice is to save first, and save automatically. Automate as much as possible, so savings and expenses, are taken care. You may have a meager take home paycheck, but you will learn to live on it, and feel really good watching your savings grow.

medhat
medhat
4 months ago
Reply to  Rick Connor

Second your suggestion for automation. When you don’t have to think of it regularly the savings can be essentially painless, and hopefully when one does look, for example with an annual “tune up”, they find that this pot of money has grown.

Ben Rodriguez
Ben Rodriguez
6 months ago

Max out your Roth IRA and invest as much as you can in your Roth 401k.

Bob Wilmes
Bob Wilmes
6 months ago

Read the book “The Intelligent Investor” by Benjamin Graham – twice!

When looking for proven voices of reason on how to think about investing it is the “Bedrock” of value investing and explains about what risks you should consider and how to think about the market.

Andrew F.
Andrew F.
6 months ago

Do not get a single credit card till you’re certain you can and will pay the full statement balance every month. Running a balance on credit cards, with their exorbitant interest rates, can quickly spell financial ruin as you dig yourself deeper and deeper into the hole.

And when you do get a card, get one with the best rewards. There is great satisfaction in having the credit card bandits pay you every month!

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