The USA, the land of opportunity and freedom for all.
Weāre getting thereā¦
Achieving financial freedom can be a liberating feeling, the same emotions my grandparents had when they crossed the Atlantic Ocean as immigrants.
But it is even a better feeling becuase you know you are now in control and you donāt owe anything to the bank, government, or your landlord for a broken lamp.
As a teen, I havenāt experienced this feeling since my family and I have been diligent enough to never take out loans or be in debt.
But taking out loans is not necessarily a bad thing.
There is such thing as good debt on appreciating assets but you do want to make sure it doesn’t go overboard and able to manage to pay it back in full.
The most common types of debt can be everything from credit card debt to the student and home loans also known as mortgages.
These loans are used to pay off for investments that go up in value.
Taking out loans for cars, luxury goods, and heck never do this, clothing are the worst decisions you can make, let alone worst investments to take out loans with because it is purely money down the drain that will never allow you to get you your money back unless you keep that Supreme bag sacred in a vault to sell it at a marked up price to some Asian bidder in 2 years.
20.2 million Americans currently carry a personal loan and this has increased to nearly 6 million people in the last year.
The top reasons American borrow is to consolidate debt and pay it down.
Second to fund a renovation and third, pay for a vacation.
The top two make sense, debt consolidation can help you pay down high-interest credit card debt and renovations can add value to your homeās value when it’s time to sell it.
And of course, we cannot miss the last reason why people take out loans.
Drum roll….
To attend a wedding.
Now, this is ridiculous.
Attend a wedding not even have one?
That wedding must be a sweepstakes trip to the most prized island.
No wonder people want to attend it then.
You get a vacation and be a part of a special event.
But I still would never recommend lacking out a loan that won’t pay for itself!
Especially during this time, taking out loans has only increased but also allowed for extra saving techniques to be put into place since we are spending less on depreciating nonsense such as eating out and Gucci.
Nicollette you’ve been warned.
In February of this year, 31.78% of people reported taking out a personal loan for the first time for debt consolidation due to the pandemic.
And taking out loans has only increased.
Still, the average amount of a loan was a staggering: $11, 657.49 according to Finder.com, and the largest loan was taken out for starting a business which also has the highest failure rate.
This is what my tenant went through this summer.
He started a business at the start of the pandemic and since it wasn’t a brick or mortar or tech conglomerate, he had to move out since he put his lifeblood into this company and didn’t plan wisely.
Although loans do have a serious consequence on the way you manage and handle your money, still, those who do not have any looming debt, are unable to achieve financial freedom.
Mindset plays a big role as well.
Are you satisfied with where you are and what you’ve achieved?
You’ll never have everything but are you stable?
The words freedom and independence are used interchangeably.
In essence, they generally mean having a diversified portfolio, enough investments, many income streams to fall back on, afford the lifestyle you want, pursue the career you want without feeling the urge to keep it just for the disposable income, and having enough savings for the future.
Why do we fail to achieve this freedom?
Well, the biggest reason is that we donāt plan and are too optimistic about the future.
As I state over and over, the most important thing you can do is plan for the worst during the best.
This will allow you to live comfortably, safely, and sanely then.
Of course, we never want to think about losing our jobs or get an injury, but life is just like the stock market, our emotions, and plans change and are never set in stone.
We can never predict anything but if you plan, you are already set up with a solution to an unpredictable plan.
Better be safe than sorry.
Same thing with insurance.
Although my family has achieved financial success and freedom, it took incredible due diligence, sacrifice, not eating out and traveling for a good few years, living frugally, and setting realistic goals.
The best investment you can ever give yourself, is well, yourself.
Invest your time in education and you will see a reward.
You are as powerful as you can be and how you spend your time is a direct result of what you will achieve in the future.
My family has instilled this in me and as a result, I donāt feel the urge to compare myself with people who go out on the weekends or go to fancy dinners.
I love having less and paying attention to how I spend because I know when Iām retired and older, I will regret not taking care of myself for the future.
So now after rambling about myself, what are some realistic goals that you can set up for yourself?
Everyone is different and we all have different goals.
As a teen, a few of mine are these:
I knew there was something missing on YouTube with the gender gap in personal finance so I took the action and went for it.
Not contemplating or waiting.
The hardest step is always starting, for sure.
Second, I have to say I want to be able to purchase my own apartment in the city one day.
I commute to NYU and it is over an hour and a half one way, yes one way.
I commute becuase renting is money down the drain, since I plan on working there so I will have to live there eventually and get a bigger place than a rentable shack and commuting is certainly a money saver, but not a time saver.
But since time is our biggest asset, I’ve evaluated these past few months if it is worth it.
Living in Westchester, I love the separation between city life and suburban peace.
I remember looking forward to it after my last class in the city, wanting to venture back home and actually see trees.
Iāve now freed up over 15 hours of just commuting time back into my schedule during this pandemic.
It is a blessing in disguise since time is the one thing you cannot buyback.
But once we get back to normal, that is a dream of mine, to be able to finance to purchase a place near campus.
Itās great to have dreams but for a long time, I thought it was ruining my life because I constantly compared myself to people who got them faster or were born with all these pleasures.
And that only deteriorates you from getting where you want to go.
Donāt do that to yourself.
Donāt put yourself through that misery.
Be grateful for what you have becuase there is always someone out there, who wishes they had what you have as well.
It is an endless cycle.
Someone wants your smile, your advantage that you live on the East Coast with exposure to immense opportunities, and or your health.
Focus on the path you want to create and that starts with setting realistic and possibly lofty goals so you have something to work towards!
If you have everything, you are less inclined to work towards achieving it than if you had nothing!
Actionable Guideline I Recommend You Should Follow:
If you are lacking on the diligence of spending, make a budget, not a detailed excel tracker full of formulas and nonsense, just simply write down what you purchase and if something is recurrent, make sure it is what you really need.
Iāve been following this rule since I received my first paycheck and earning money.
The more you make, it doesn’t make sense since 50% of your let’s say, 1 million dollar income, shouldn’t be spent on food, etc. but for most, this is the best plan to start out.
The 50/30/20 rule.
50% of your income = needs
30% = wants/discretionary
20% = right into savings, donāt you dare touch it!
This keeps me focused and makes me aware that Iām spending wisely.
Now, I may be more strict than you with my purchases since this has just been a part of my daily habit to be frugal with my money forever and I have no reason to stop!
My friends think Iām nuts waiting 48 hours before every purchase, but it works.
It saves hundreds of thousands per year and don’t even get me started on how wasteful coffee is, probably my biggest pet peeve of all time.
That is something I suggest you do if you are uneasy about purchases.
Waiting a full 48 hours and for the extreme friends, 72.
Health > Anything
I love watching āThings I Wish I Told Myself When I Was Youngerā YouTube videos.
They always make me feel I need to give myself a pat on the back because in every video, I always hear the importance of taking care of our health and it is truly true!
It is the groundwork and lifeblood of everything we do!
Without it, you cannot do anything.
Donāt take advantage of it please!
In college, especially since it’s located in New York, it makes me so upset to see so many students abusing their health becuase I know they will have regrets when they are older.
I donāt know if its to act cool and they are insecure or this is just the age to experiment, but I just laugh at them!
First off, it is such a waste of money and second, you are just slashing years off of your life.
On the monetary side, this will haunt you. You will have to pay higher health insurance and plan since you have more risks.
All in your control to stop.
Your brain cells are deteriorating and you wonāt achieve as much as you can.
Itās completely your choice and I understand peer pressure is real and being in the moment is fun.
If you feel you are in that situation a lot, then you have to make that decision, to get out of there and seek help.
After all, you are the average of the people you spend time with.
Choose wisely.
Credit > Debit
Now Iām very stern on this because I truly dislike debit cards.
When you first start earning money and spend, it is the worst type of card to have as a student.
Debit cards donāt teach you any good skills about going over your balance each month, which takes less than 10 minutes at the end of each month to make sure there were no fraudulent charges, establishing creditĀ and you can also issue refunds, only if you see them of course, donāt abuse that power becuase it will hurt you rather than help.
Lastly, credit cards build up your credit score faster so you are more eligible to take out loans and be looked upon more highly when purchasing a home, car, and even getting a job in the finance industry.
No skeptics, more deals, and trustworthy.
Destiny
Iām not a very lofty person as you can tell.
Simpler the better, including with my hair.
BTW, if you know me, I never keep my hair down or wear makeup.
Seriously, I rarely do.
Maybe once a year if you catch me.
The last time I wore makeup was in for a ballet recital when I was 4 and hair down, no joke was for my graduation photo that you can find all over the internet since it is the only photo of me.
Not even for birthdays or Christmas.
I know, Iām weird.
Itās just so uncomfortable, unprofessional in my view since hair is covering all my features and plus, I have no time to waist twiddling with it!
Anyway, with your destiny, your goals can be as lofty as setting up a ROTH IRA to making sure you learn that new TikTok dance.
No, you cannot find me on TikTok, Iāve never made one before.
Whatever it is, find more dreams so you have the passion to pursue them!
Don’t waste your life looking at what others have achieved.
Define them for yourself.
The only person you need to impress is yourself.
Besties For Life
Investing will always be there for you and is for sure the best route to take to maintain financial independence and security.
It is another income source and the more you have, the better well off you will be.
That doesn’t mean you will achieve more happiness with a portfolio, but of course, when you are more stable, you do feel comfort in that way of your choosing your own life.
Donāt try to be the next day trader on RobinHood trying to pick the best unicorn tech stocks or Warren Buffett, and for real donāt becuase his portfolio is doing horribly now with all the airline stocks.
Instead, simply open an online brokerage account.
According to Investopedia, the list of the best online brokers of 2020 include:
Fidelity: mine
TD Ameritrade
Charles Swab
You can do your own research on what companies you are interested in and make sure they are profitable, simple, and are blue-chip not so much cyclical, meaning they do well regardless of what season and or pandemic that approaches.
The younger you are, the more risk you can take so make sure to have a proper allocation of stocks, bonds, mutual funds, and ETFs to get started.
If it is too much, ask your parents or if you can pay for yourself, to invest and do research for you.
If not, donāt panic.
Let the money sit there, in the portfolio, of course, not too much cash only for short term goals and emergency funds set aside!
Patience is key.
Check it every few months and see if you need to make adjustments.
It’s easy to go crazy.
You Really Donāt Need That
Thatās all I can say.
You really donāt.
Yesterday I was debating buying chocolate balls from Amazon.
I know not a lofty purchase but since Iām Mia, you can expect that.
They were $10 for a pack of 8 Lindor truffles.
Okay. I love chocolate.
Is it that healthy for me?
No.
Can I invest this money instead?
Yes and make better returns.
Will I be proud of myself for making that decision instead tomorrow?
Yes.
Simple as that.
And yes, you have to live!
I could have easily bought those chocolates but the problem with me is that I wouldāve eaten them and have food guilt so they wouldāve been useless altogether!
This list might seem exhaustive but in actuality, you all got this handled and have been practicing these skills since you made your first lemonade stand in Kindergarten.
The best plan is to start earlier than later.
Donāt sweat it and everything takes time.
What I live by and the most important things I suggest you remember, your financial and mental/physical health are the most important and will always be crucial for your entire existence.
They stay with you forever so might as well be on good terms.
They dictate everything and if you donāt prioritize them, they will haunt you.