Financial Advice for Young Adults That I Wish I Knew at 22

I was talking to someone recently and we got on to the subject of money. And she told me that financial freedom was something that she'd wanted for a really long time. She wanted the freedom to live life on her own terms. She wanted to have more control over her time. She wanted to eventually be able to just spend more time with her family. And I asked her, OK, so what have you been doing to work towards that? And she said she tried a few things on the side a couple of years ago. They hadn't really worked out. And since then, she hasn't really done much else. So I asked her, have you read anything about making money or building a business? And she said no. I asked her, have you listened to any podcasts on it? She said no. I said, have you watched anything or tried to learn about ways to get to financial freedom? She said no. And I remember thinking, how many of us have a goal that is really important to us but haven't actually spent any time learning how to achieve it? Because I don't think she's at all. I think a lot of us do this. We treat making money or investing or starting a business like it's something we're just supposed to magically figure out. We treat financial freedom as something that would just randomly happen to us. But imagine saying I want to become a dentist and then never reading a book about dentistry. Imagine saying I want to become a dentist and then never going to dental school, never watching someone who knows what they're doing. You wouldn't do that because being a dentist or a pilot or a doctor or whatever it is, it's a skill. And so is making money. So is investing. So is saving. If financial freedom is something you genuinely want, you have to start treating it like something you can learn. You have to start treating it like a skill that you can learn because you might have a really clear, important destination in your head. If you never actually learned about money, you probably don't really have much of a map for how to get there. And the good thing here is that the skill of money is one that you can start learning really simply. There are so many free resources now, books, podcasts, YouTube videos. I've got hundreds of videos on this channel, a whole account and explain series covering everything from budgeting, investing, saving, making more money, building your business. So if that's something you want to learn about, you can subscribe. You can follow along with the videos every single week. So if financial freedom is something you genuinely want, you have to take action and start treating it like a skill that you can learn. That is my very first piece of advice. The second piece of advice is don't confuse looking rich with being rich. Do you have friends who want to or want you to go out to expensive restaurants, go shopping with them, go on trips with them and stay in nice hotels? You probably do. And if you have friends with bigger budget than yours, then it is totally OK to be authentic and say, hey, I can't. I can't do that because I'm working towards financial goals right now and I need to save that money. And that is out of my budget. And if they are real friends, they will totally understand. Everyone has very different levels of taste as well as very different budgets. So trying to keep up with everyone around you is going to leave you running out of savings and in debt. And this isn't just real life friends. These are also friends that you see on social media who are like acquaintances half the time. A lot of what you see in terms of amazing lifestyle on social media and whatever it is, is often just an illusion. A lot of what you see is just not real and chasing experiences just so you can post a cool photo on Instagram or look good to everybody else is just a recipe for ending up broke. What I'm trying to say is that it basically comes down to would you rather look rich or would you rather be rich? Because you cannot do both when you are building financial freedom. If you dream about becoming financially independent one day, you have to stop caring about what everyone else thinks about you because no one else is going to make it happen for you apart from you. You've got to learn to speak up for yourself and fight your own corner. Don't be afraid to turn down invitations. Don't be afraid to just adjust to cheaper activities for you and your friends because chances are people will respect you for having your priorities straight and it'll inspire them to reassess their own financial priorities as well. The third point I have here and this was also inspired by another conversation that I've recently had and that is don't let someone else make you feel bad for wanting a life that means something to you. I was in a conversation with someone and they said I don't really care about working hard because I don't need more money. I don't want a fancy car. I don't want a big house. I'm not materialistic so there's no reason for me to work any harder and you don't need to work any harder either and it made me realise how quickly we can make assumptions about other people and convince ourselves that that is the truth. Maybe you look at someone working late every night and you think they care way too much about money but maybe they're not chasing money at all. Maybe they're building something they really believe in and money is just what happens when you get good at something that you love. Maybe you look at someone who never seems to spend anything and you think they're so cheap but maybe they're saving because there's something they care about far more than buying things today like giving their parents the life they never had or creating freedom for their family. Maybe you look at a graduate turning down a huge salary from the outset and think that's crazy. Why would you do that? But maybe they know exactly what they want and they'd rather earn less doing something they love than earn more doing something that makes them miserable. We are all viewing life through our perspective of money and if you're not really clear on what you want out of your life and while you're doing it someone else's idea can quite quickly become yours or someone else's limitation can very quickly become yours. So the advice I'd give to myself is be really clear about what it is you want and as a sub point don't try to explain or justify what it is you want to everyone around you. It's not a battle worth having and it's so much better to put that energy into the thing that you want to do because if it makes sense to you that is more than enough. The next point here there are some financial decisions you might only make a handful of times in your entire life but they can affect you for the next 10, 20 or even 30 years and if you don't understand them it is very easy to let someone else make that decision for you. A mortgage is a perfect example you might think I'll learn about mortgages when I need one but by the time you actually need one you're probably not going to be sitting there calmly thinking about interest rates or repayment terms you're probably going to be looking over at the house that you love with a very emotional lens. You're going to be thinking about where you're going to live, where you're going to grow old, maybe the life you're going to build there, where your kids are going to grow up and when you're emotionally attached to a vision or the outcome it is so much harder to step back and ask is this actually a good financial decision for me and that is the exact point where it's very easy to just trust the person in the room who sounds like what they know what they're talking about but probably has a vested interest in you buying that thing. Same thing applies to buying a car, taking out a loan, choosing a pension, getting insurance, even deciding what to do with your investments but you should understand them well enough to know what you're agreeing to, to know what you're paying, what the risks are and what alternatives you have because you want to be making these decisions from a place of really clear understanding and a logical hat not from fear, from pressure or even from excitement. I've actually got a video coming up about mortgages, about how to buy a house telling you the entire process from A to Z. It is one of the most important financial decisions you're likely to make in your life so it's really worth learning about. I've also recently made a video about buying a car, you can check that out here, that's also another decision where something that feels affordable today can end up costing you so much more over time so worth really understanding these big purchases and how they'll impact you. The next piece of advice is don't believe money or anyone who has it is evil and I think there's something we need to be really careful about because the way you think about money can actually affect your relationship with it. If you grow up believing that people who have money are greedy, that wealthy people are selfish or that having a lot of money somehow makes you a bad person then why would you feel comfortable wanting more of it yourself? You can end up wanting financial freedom whilst at the same time subconsciously judging the very people who have the thing that you're trying to achieve and that will make it a lot harder for you to actually achieve that thing. When you see someone who's achieved a level of financial success that you want for yourself instead of immediately feeling like resentful or jealous towards them try seeing it as a glimmer of hope, as proof that it is possible for you to think if they figure out how to do it maybe I can figure it out too. The next important piece of advice I'd give is that the habits you build with money in your 20s even 30s are going to follow you for a long time and this is especially true when it comes to money. So say you're right at the beginning of your journey to financial independence and you open your bank account and you look at it and you think I've only got 50 pounds or 50 dollars or whatever it is left over, what is the point in saving that? That's not going to make me financially independent. Well that amount, that amount is not the point at this stage when it comes to starting off in your financial independence journey because you can be the person who looks at that 50 pounds or 50 dollars and thinks it's not enough to make a difference so I might as well spend it. Then your income goes up and it's not 50 that you're talking about it's 100 and then it's 300 and then it's 500 and if you've built the habit of spending everything you earn you'll probably keep doing the exact same thing. More money comes in more money goes out or you can be the person that decides right from the beginning that whatever money comes in you're going to put some of it aside. You're going to live below your means and when your income goes up you'll increase your savings too and over time you're not even thinking about it anymore it's just what you do and now you've built the identity of someone who is good with the money. So whenever you're starting off on your journey and you might hit above a crossroad or a bit of friction just remind yourself it's not the outcome that matters it's a habit that you are building through doing that. It's the identity that you're creating when you see that thing through and then don't wait too long before you start investing. Putting things off like investing for the future can turn into being a very slippery slope. You might be thinking that you'll start one day when you have more money but more often than not that becomes a never-ending cycle of procrastination because there's always going to be a reason why you can't invest. Always not enough money, not enough time, not enough knowledge. I'm saving for something else right now but the longer you put off investing the harder you'll have to work to get to the same level of financial freedom as someone who starts investing earlier. So someone who starts investing at 20 can become a millionaire by age 50 by investing just 180,000 of their own money. However if they were to wait until age 30 to start investing they would need to invest almost twice as much of their own money to reach a millionaire status by age 50 which means the sooner you start the less heavy lifting you have to do and the less of your own money it takes to get a million dollars. So even if it is just 50, 100 a month just start investing now and if you don't know where to start I talk about investing a lot more in this video right here so just set aside 15 minutes after this or some time on the weekend just to learn and get started because you'll be so glad you started when you did. Thank you for watching and see you next week.