😎11 Financial Practices I Would Adopt If I Were 10

I turned 20 this past Thanksgiving and I already feel old.

I’m officially 2 decades into my life and already starting to become part of the gang who’s writing posts such as, “If I were __, I would tell my past self this” or “My 10 Regrets from age __”.

Although the internet is saturated with these types of articles, they are truly my favorite because there’s no better lesson than learning from someone who’s been in your shoes and in a path you want to follow.

The beauty about life is that you don’t know what you are capable of. Every day you learn something new and hopefully uncover what you are made out of.

Power in Lessons

“If you don’t laugh at what you didn’t know from a year ago, then you are missing out.”

I truly believe it and now I’m really laughing at myself. I can’t help wonder how much I’ve really learned this past year!

Although 19 and 20 feel the same compared to 20 and 21 which seem like huge gaps, I’ve learned an enormous amount during this past year than any other time.

Why?

2020 was a blessing in disguise. I have to acknowledge how fortunate and grateful I am to be able to do zoom university remotely and not be upended financially, economically or physically by the pandemic.

Only mentally as did everyone in some form or another.

At 19, I prioritized investing in myself. I started focusing on my portfolio because I happened to learn about the power of time sitting at home. Not commuting, I saved roughly 20 hours per week and that lead me to drill down onto how precious my time really is and make sure I use it to its fullest. My age is my biggest advantage because time cannot be replaced or purchased.

So how did I invest in myself you may ask?

-Maxing out my Roth IRA

-Creating several passive income streams, you can read here

-Owning my first rental property to RENT out not LIVE in for myself

-Set up my favorite morning schedule of reading for 2 hours and exercising for 1

-Gaining the daily dose of vitamin c and d daily outside to boost mood and work ethic

-Reading randomness to expose myself to new insights

-Meet 2 new people each week from online-whether from LinkedIn or the classroom

-Opened my first HSA account (you can read more here)

-Build a presence on LinkedIn and delete my other social media channels

-Become CFA and CPA certified

I surely did a lot on the personal side of things all because of more time.

Use it wisely my friends! Your life will change once you start honoring and prioritizing it.

Ten?

I know it’s relatively young. I had no idea what a bank account let alone a credit card was at the time. I thought the bank lended out money to everyone who wanted it and that piece of plastic held endless amounts of money on it.

Sadly that’s not the way the world works because in order to spend and keep the economy running, we must earn. If we had nothing to strive for, life would get boring quick coming from someone who can’t stand vacations.

Baby Steps

Technically one is still a child until 12 but there are countless ways you can propel your future and get ahead 99% of your friends right out of the womb!

A quick FYI, don’t be intimated by all these strategies and rules.

Whether you are 30 or 5, you can do the same.

If you are 5 reading this, let’s talk.

After all, the worst time to start is tomorrow, the best time is today.

What are you waiting for?!

#1 Get Updated On What Your Parents Really Know

Roth IRA, 529 C, HSA, compound interest? Huh? The moment you are born, the clock is ticking and the future awaits. We mimic everything our parents do till and past adulthood. From their eating to spending habits, if you want to change your future, you need to start with being educated and understanding how they are influencing you. It all stems from focus which means you need to become familiar with what your parents do and don’t know.

Don’t be afraid to lecture them a little. They’ll be proud their child knows more.

Sit with them at the dinner table and go over your financial situation, where your assets are located and all the laborious portfolio management stuff that you put on the back burner. Make it an exciting not tedious task that is scary. Your life is determined by the uncomfortable conversations you have after all.

Your parents can help you tremendously if they have the proper education. This doesn’t require an MBA from Wharton, just some common sense, a financial advisor visit and research online. Great sites include: Investopedia, Yahoo Finance and even CNBC but be wary of stock pick recommendations that usually make money off of you once you make positions in their favor.

Setting up accounts for children will get them invested and take advantage of compound interest immediately so by the time they get to college, they could easily be worth almost a million.

I’m fortunate enough to build my net worth to a shy of a million in a couple of years through this planning and diligence. It’s not rocket science. It’s boring and responsible sit-downs.

As an only child, it was natural for me to follow what my parents did as immigrants who saved 90% of their expenses and invested their way to the top. They asked me to experiment and get out of my comfort zone.

Along with understanding the account structures, become familiar with the will and or trust your family has. You can read what they are here. Asking, where their spending comes from and how you can help them manage their money better is crucial. Instead of paying a fiduciary 0.5% -+ of your AUM which adds up to a couple thousand per month depending on how much money you invest, do some extra research and invest in yourself. It’s extremely rewarding when you take the time to earn money in the stock market yourself.

A second pair of eyes is always better than 1.

#2 Don’t Just Take Any Job Out There

I get it. When you are 20, let alone 10 there aren’t many options to earn but that doesn’t mean you should waste your life making a few bucks and paying most in taxes on it. Most importantly, don’t let anyone treat you like a slave. You know what you are worth and you deserve better than minimum wage.

This is the easiest age to make money online. There are a variety of outlets that provide passive income not W2 income relying on an employer pay-check to pay-check.

Ultimately find a job that you can learn something from as well. Yes you can technically learn anything anywhere but flipping burgers versus speaking with clients at the register is a much better gig because you have interaction, learn people skills, time management, discipline, responsibility and basic social skills you subconsciously learn with others not patties.

Choose wisely and know what you want even when you are young.

#3 Live with your parents as long as you can and want

Only in the U.S. there’s immense societal pressure to move out once HS grads head off to college. There’s no coming back and if you do end up in the parent’s basement, you are looked down upon even if you are realistically following the smartest financial move.

In other countries, predominantly Europe, students are not only flooded with student loan debt, they aren’t expected to get a job after graduation nor live alone! They follow what’s best for them and save more money than any American with the average savings rate of 10% versus 90% for Europeans.

Be proud you are taking care and spending time with your parents. They raised and love you. They don’t want to see you leave after 19 and become cool but broke.

#4 Don’t Listen to Most

Lifestyle inflation is real. I remember I made $10 per day at 13 and it was extraordinary but then it increased to $20 then $50 then $100!

As a result, the more I made, the more I spent with no concept of money.

You’ll never have everything in this world and advertisers play tricks on us to feel we need everything.

Focus on living a minimalist stealth wealth frugal lifestyle instead.

There’s a difference between being cheap and frugal.

Less = More.

Don’t impress.

Evaluate what you need vs want.

#5 Set up an Emergency Savings Account

At this age it’s more like an overloaded piggy bank. What’s certain is uncertainly. Just like your parents should have a cash load of 6–12 months if any emergency expenses come up, you should too.

The earlier you want to move out, which I don’t recommend unless your job demands it, the faster you need to pile up that cash but as with everything, too much of anything is bad. Moderation is key. Cash devalues due to inflation. Have enough be prepared and the rest invested.

#6 Life Insurance

I recently discovered an HSA account. It is a health savings account which allows you to deposit a certain amount of funds that is tax deductible and can be used for any medical expenses or into the market!

The number one source of debt for Americans is medical expenses. It skyrockets in price each year because health care can do so.

Be prepared because when you need insurance, you can’t buy it.

#7 Brokerage Account

Paper trading was one of the best skills I learned in middle school because the best lesson in investing is loosing money and thankfully I didn’t spend a dime of my own.

Opening a brokerage account in a few years will be as ubiquitous as opening a bank account. What are you waiting for? Let your money work for you not against you.

From Robinhood to SoFi, WeBull and Fidelity, there are countless options that all provide free commissions, fractional shares and no accreditation needed. If you are underage, opening a custodial account is your best bet. This allows your parents to control your investment decisions and how your funds are allocated.

Be a part of the raging bull market and hedge inflation!

#8 Value Education To The MAX

Read randomness, stay curious and limit junk. You don’t have to go to a great school to get a great education. Rankings of colleges are overrated. No wonder they are based on prestige which in French means deceit.

Learning is not a destination rather a lifestyle and journey. You will never know everything but you can be great at something by having focus and stoicism, the two key pillars of the Algebra of Wealth.

#9 Custodial Credit Card

The basis of loaning money whether it’s through P2P lending or taking out a mortgage all relies on having the highest possible credit score.

Credit scores range from 300–850. The higher the score, the more responsible and reputable you are with paying off your loans, bills each month and staying on top of your payments.

That’s it.

Simply by using your credit card and paying off your payments, never going into credit card debt and accruing interest allows you too build more wealth overtime.

Borrowing money isn’t bad and clearly needed when used responsibly.

#10 Surround Yourself With the Right People

You are the AVERAGE of the people you are with.

No one cares if you are cool and stop focusing on other people’s opinions about you.

Prioritize who you spend your time with.

Are they lifting you up?

Letting you think outside of the box?

Helping you achieve your goals?

Most people think they know more than they really do.

Net work = net worth.

#11 Learn a High Income Skill

The most profitable skills in 2021 include:

-Sales
-Web Development/Coding
-Copywriting
-Digital Marketing
-Sales Funnel Building
-Search Engine Optimization
-Social Media Marketing

Great news! You can learn all of these online for free from YouTube to Coursera! All you need is time and diligence. Focus is always top of mind as well.

What’s behind what you want is a brave choice.

You have the most control and it starts with focusing on your future.

Let’s see how far you can go.