The 20 best financial tips for millennials
There are fewer better gifts than the gift of hindsight. If you were able to bring together the lessons you've learnt throughout your career and take them back to your 20-year-old self, then no doubt you'd be a millionaire in no time. However, that's not the way the world works. Instead, we must look to those who have lived through a greater number of experiences in order to find financial words of wisdom that will help guide you in the right direction.
Well, luckily for you, this Trading Education article does exactly that. Here we sum up the important financial lessons that Robert Pagliarini, who is the owner of a wealth advisory firm, has learned throughout his lifetime. They are best suited to young people looking to make their mark on the world and build their financial wealth over the next few decades. To make it digestible, here are 20 of the best financial tips for millennials.
1. It's time to take risks
Being young and 20-something year old is not the time to play it safe and hedge your bets. Instead, you are in the perfect position to take large risks that your older self would never consider. This doesn't mean being stupid with your money, but it does mean starting a business or taking out an investment that has the potential to do incredibly well.
Even if it fails, you'll have learned some valuable lessons and still have decades of time left to get it right next time. It's much easier to do this now while you don't have a mortgage to pay and three kids to feed.
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2. It's important to invest in yourself
If you wish to be truly successful in your life and accumulate a good amount of wealth, you need to first of all invest in yourself. In much the same way that you can't build a billion-dollar company from scratch, you also can't do the same without a solid foundation of knowledge.
Focus on at least the first 10 to 15 years of your career as a learning opportunity. Sure, there's a chance you might hit it big with the next Facebook or Snapchat, but that's not what's important. What is important is taking the time to learn things along the way and to build up your knowledge base for future success.
3. Get smart with money
Despite universities proclaiming the virtues of getting a degree and spending years in education, it is surprising how few young people have good financial knowledge. This is a real shame as it can lead to people burdening themselves with large quantities of unnecessary debt from a very young age.
Instead, you should be proactive with your financial awareness by taking the time to learn the basics of accounting. These skills will help you to make wiser personal and business investments as you grow older. Better yet, you don't need to pay thousands to learn these skills, just start by reading a book, like this one - Get Money Smart by Robert Pagliarini.
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4. Move to where the opportunities lie
Nowadays, young people are often too cautious or too scared to make a big move in their early 20s. Instead of moving to a new city to find a great job and to access opportunities, they will instead choose to stay around at home, growing old as the world passes them by.
It's unlikely you will find exciting new opportunities when you're stuck in the same environment from birth. Instead, be brave and move to the place where opportunities lie, even if you have no idea what awaits. By simply being in those environments, you will be exposed to exciting new ideas and will be much more able to find that great job or gap in the market.
5. Set lifetime goals, now
Plenty of people say things like I can't wait to be rich someday or I'll take a holiday once my finances are in order. These statements are very blast and aren't at all realistic. In fact, by saying these, it's unlikely you'll ever actually reach them and earn the financial independence you desire.
Instead, you should be active in your financial planning by setting goals and targets for you to hit throughout your life. Don't be shy here, instead be bold and ambitious. Do you want an island by the time you're 40? Great, then write it down! You can then get an idea of how much you need to earn and be worth by certain intervals in order to hit those goals.
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6. Always focus on growth
People who never get anywhere in life are those who are stuck in the here-and-now and don't take the chance to push themselves. Instead, to succeed with your finances, you need to be committed to always pushing yourself and seeking growth. This means learning new things and trying out new ideas.
As mentioned earlier, even if plans fail or you get knocked back, you still learn valuable life lessons. These are invaluable growing experiences and are the sorts of things you should always be focused on. This is what will help set your awesome life apart from a mediocre one.
7. Make investing and saving a habit
In just the same way as you should invest in your own knowledge from a young age, you should also start investing and saving money. Even if you don't have much to spare. It doesn't matter. In fact, just by putting aside £5 or so a week, you'll find that in a few years' time you have a decent pot of money sitting around ready to be used.
This simple practice of investing and saving where possible will start to instil in you good financial habits that will stand you in good stead once you have more money to play around with. Smart millennials will be looking to save at least 10% of their monthly earnings, ready to invest in opportunities when they come their way.
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8. Never take on debt for your education
Taking on debt to go to school is an incredibly controversial topic. However, there are plenty of solid arguments that state that taking on huge sums of debt just to get a degree is not the way forward. In doing so, you'll be left with large loan repayments lingering over your head for decades to come.
Instead, you should consider taking some time out to do a college course instead and bolster your finances in the meantime. Alternatively, put in the hours by taking on a job whilst studying. Sure, it won't be as fun and it will definitely be harder, but it will instil in you the sort of grit and determination needed to be successful in life.
9. Go all in on everything you do
The typical route that people take with tasks in their lives is to organise them into small chunks and then tick off a small number of jobs each day. However, if you really want to excel at something and get ahead, you need to go all-in on what you think to be the most important thing at that time. Here's an example. Say you work 40 hour weeks in a bog standard job, and then decide one day you want to start a business.
Many people might maintain the job and commit a couple of hours every night here and there growing their business. Though this slow and steady approach might sometimes pay off, it's much less likely to. Instead, if you truly believe in the idea, you should commit 110% to it and ignore anything else until you've seen it through. As a result, your chances of success will increase drastically.
10. Focus on maintaining low core expenses
One of the worst things that a young person can do nowadays is starting taking on large monthly expenses from the get-go. Sure, some of your friends can afford to live in a flashy house or drive a brand new car, but don't try to imitate these people. Instead, keep your finances lean in order to avoid burdening yourself in any way.
It can be tempting to sign up for an expensive monthly loan agreement for a brand new Tesla, but it's just not good financial sense. In doing so, you bog yourself down with large payments that you can barely afford and which reduce your chances of taking on exciting new risks and opportunities.
11. Think about who your friends are
There's a common saying that we become the average of the five people we spend the most time withÂ. When you think about it, it makes a lot of sense. Say you surround yourself with friends who have very low expectations and little financial ambition. Most of your conversations will be based around mediocre things that won't see you getting anywhere.
However, if you take the time to meet regularly with similar, like-minded people who are driven and have good financial sense, then your chances of success increase dramatically. Being young and 20 is the time to dream big and go big on new ideas. Find people who share this passion and drive.
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12. Your health is important
Working hard and pushing yourself when you're young is important, but it should never come at the sacrifice of your own health and wellbeing. Instead, you should make exercise and healthy eating a regular part of your lifestyle. This will help keep your body and mind in great shape, keeping you ready for when challenges come your way.
Need proof of the importance of this? Just speak to people you know who suffer from chronic illnesses or self-inflicted health disorders. You'll find that their lives changed dramatically once these health issues got in the way. It allows you so much less time to focus on other things and starts to swallow up your most valuable asset: time.
13. Create, create, create!
Those people who are successful in their future finances are those who have spent their lives creating and building great things. It doesn't even matter what these are. Be it a company, a charity, a product or some sort of following. Regardless of what it is, that something that they built is the thing that brought them huge financial freedom.
As such, you should put a lot of your focus and energy into building great things all the time. You never know which idea will be the big hit, but you miss out on 100% of the shots you don't take. It all comes down to being open to taking risks and reaching for new opportunities as and when they become available.
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14. Focus on the other eight hours
In a typical day, you will spend eight hours working, eight hours sleeping and eight hours doing other stuff. The figures aren't always spot on for everyone, but they are normally pretty close. As such, if you want to maximise your time and build great wealth, you need to be paying careful attention to what you do in the time you're not sleeping or working.
If you have a business idea that you want to push, then eight out of those eight hours should be spent on that idea. Even if you put four or five hours a day into it, there's someone else out there putting more time into the same idea. So, make the most of the time you're given and go all in to reap the success in the future.
15. Go above and beyond at work
This point almost goes against some of the other points made in this article, as it's been largely trying to foster independence and putting in hard work on your own ideas. However, there is a lot to be said for going above and beyond in your day job as well. Rather than just blending in and bustling through the day, you should give 100% each day and try to stand out.
By taking this approach, you will learn so much more and take so much more from the role. Also, it is crucial in helping you to develop an ownership mentality, which is where you control how successful every part of your day is. You'll also find you start to enjoy yourself more and are better able to influence those around you through your energy and enthusiasm.
16. Don't get caught up on how old you are
There are far too many people who blame their age for why they won't try a new opportunity. There are those who state they are too young or too inexperienced to try something. That's wrong. In the other camp, there are those that say they are too old and too stuck in their ways to start something new or to try and build something from scratch. This is also false.
In actual fact, it doesn't matter how old you are in order to be successful at something. If you're 15 years old and want to start making and selling things, then go for it! If you're 50 or 60 and decide you want to go back to school and develop a new skill, then do it! There's always time left to change your circumstances, you just need to silence the doubt. The best time to get started is today.
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17. Double down on your strengths
One of the quickest ways to succeed at a task in life, such as starting a business, is to commit as much of your energy as possible to doing something you are great at. This doesn't mean neglecting everything else, as you can still invest time in developing those skills. Or, better yet, bring in outside help from others who have those skills.
If you want your business to succeed you need to do something exceptionally well, so you should be the person going all in on their strengths and maximising their talents and energy. Don't worry about all of the rest as these things will sort themselves out and be carried along by what you achieve through focusing on what you're great at.
18. Understand what drives you to succeed
The very nature of building something great means that you will be faced with challenges along the way. If you speak to any successful business owner, they will tell you that 1,001 things got in the way as they fought to get to where they are today, but that didn't stop them. And, in order to get you through these tough times, you need to have a reason for doing what you're doing.
If you're working 16 hour days to learn a new skill or build your brand, you need to have something there to motivate you the whole way and remind you why you're punishing yourself. Understanding what drives you is a very personal thing, so take the time to look deep into yourself and learn what they are. Then, plaster these things wherever you can so they are there to remind you and push you forward.
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19. Always take responsibility
Following on from the previous point, it's important to be aware that life is not perfect and sometimes mistakes happen and things go wrong. It might be that you miss a launch deadline or an investment doesn't pan out how you'd have liked. Well, when this happens, don't blame others.
Instead, take responsibility for the failure and accept it as your own. This is a very mature thing to do and it's by far the best way to grow as an individual. You'll never get anywhere in life if you keep blaming others for your mistakes. Instead, be that person who takes responsibility and learns a lesson for next time.
20. Focus on building assets
Building real wealth means realising that you have to stop working for money and have money work for you. This can only happen if you have taken the time to build up your assets. Assets are things like investments, businesses and properties. Things that give you a return of cash every month, rather than taking money away from you.
If you can build up a sizeable amount of assets in your life, then eventually the money will never be a problem. You have enough coming in to cover your needs and don't have to worry about spending so much time working. If you want to learn more about this point, then a great place to stary is by reading Rich Dad, Poor Dad.
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Bonus Tip
As a final point to end on, you need to realise that taking control of your finances should not be seen as a chore. Instead, have fun in everything you do and live life to the fullest. There's no reason you can't do this, as long as you focus on doing what you love.
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Source: www.forbes.com