image via pexels
Everyone loves talking about “hustling” and “being an entrepreneur.” But the truth is that these are paths only for a minority of people who happen to be in the right place, at the right time. For most, starting a business results in disaster, a lot of pain, and time wasted.
So what can you do in your twenties to build wealth and get ahead in the game of life that doesn’t involve becoming a founder?
Let’s take a look.
Massively Reduce Your Expenses
A few people spend big and earn big and get wealthy that way, but they’re few and far between. The majority of wealthy people live extraordinarily humble lives, focusing on their cash flow and net worth, not on the latest products coming out of designer brands.
Gary Vaynerchuck, a man who’s now worth more than $100 million, talks about how he spent his twenties doing nothing but working and living in a box room. He didn’t take a holiday for ten years.
This kind of frugal living might sound extreme, but it’s a tool that you can use to build a base level of wealth in your life that builds and builds. Putting away a few thousand dollars at the start of your twenties can lead to tens of thousands by the end of it, and hundreds of thousands by the end of your thirties.
Don’t Just Save: Invest Instead
Saving and investing are two very different things. When you save, you simply deposit cash in a bank account and leave it there doing nothing. But when you invest, you actually buy capital – the productive assets that generate profits. You can then take a slice of these profits for yourself and add them to your overall income.
The power of profits is tremendous, especially when you reinvest them. Every year, you’re making more and more money passively, without having to get a promotion.
Crypto is also an interesting area to consider. The future of Ethereum looks bright because of fundamental changes developers are making to the platform. And that means that the asset class could see large gains going forward – much more than we’ve already seen.
It might sound extreme, but spending a couple of years in your twenties working weekends can help to dramatically increase your overall wealth. Working weekends allows you to build cash more rapidly and it keeps you busy, stopping you from spending money you don’t have.
Lockdowns are actually a great time to put in extra work if you can. There’s not much else to do, so you might as well focus on building capital and raking in as much money as you can.
Lastly, building wealth in your 20s involved avoiding debt like the plague. Don’t assume that you need everything in your life to arrive immediately. So what if you’re still living in your parent’s home? It seems like a bad thing, but it saves you from mortgage costs and all of the usual living expenses you’d normally incur.