12 Pieces of Advice...#4 and #5

I posted a thread a week or so ago titled Top 12 Pieces of Advice for Men. Of course its not a complete list, nor can I really claim that its definitely the "top 12." I did state that I would elaborate on each of the things I came up with though, so today I'm going to write a little bit about #4 and #5: building wealth, and delaying gratification. They go hand in hand with each other, and I think in today's world they are important concepts that are not really taught to young men. Most of what I write here was learned from mistakes I've made, and regrets that I have! Before I go on I am not a professional financial adviser. You can, however, read plenty of advice for free online by some.

We live in a consumerist society that makes young people believe they "need" things. In reality there are only a few basic things we need: shelter, clean water, and food. To have those things, we need to work, and for most of us work generally provides more than enough income to cover those things. Everything else in life is a want, whether you like it or not. Unfortunately I think society today, at least in the US (I can't speak for other countries), is full of jealousy. Most of us tend to think we deserve what someone better off than us has, and that leads many people down the road of financial peril.

I'm going to suggest that if you want to live life how a man should, you need to have a very different view of your finances. First, if you are eighteen years old, you and you alone are responsible for your financial situation. Where you were born, what you look like, and whatever shortcomings you think you have physically and mentally are excuses, not actual roadblocks. There is no reason why an eighteen year old in this country cannot become a millionaire, other than he or she gets in his or her own way. Ignorance is also not an excuse: we have more information at our fingertips than ever before.

Instead of elaborating on every single thing you need to do, because that would take a book, and there are plenty of people who have already wrote them, I'm simply going to make another list! Because who doesn't like a good "top" list? So here are some of the things you need to think about, and do, if you want to be financially secure.

1. Don't have babies until you are married, and are financially secure. Kids are expensive, and YOU are responsible for taking care of them. To do that, you need money. If you barely scrape by as it is, why are you going to put another human life into that situation?

2. Read everything by Dave Ramsey. No I'm not getting paid to advertise for Dave Ramsey. I do, however, critically analyze things I read and for me he is by far one of the most logical people I've read. Do what he says, and you'll succeed.

3. You have to work hard to make money. There are ZERO "get rich now" schemes that actually work. If you want to be rich, then you have to work really damn hard to be rich. Most millionaires in this country, believe it or not, did not grow up with a silver spoon in their mouth. I know one now who doesn't even have a high-school degree, and recognized a lack of plumbers in this area. He now employs four other people, and has a fleet of plumbing trucks.

4. Save your money. I try to empty what's left of my paycheck after bills into savings, and leave as little as possible for spending. Some goes into my retirement account. Yes, you need one of those. Open a damn ROTH IRA and work towards maxing out your contributions as early as you can, ESPECIALLY IF YOU ARE EIGHTEEN. Besides that, I have two savings accounts, plus an Acorns account (I recommend looking into Acorns, and again, not a paid spokesperson for any product here). If you don't make a lot of money, FORCE yourself to save anyways. Save, save, save, save....I cannot stress it enough.

5. Two week rule. If you want to buy something that is not one of my three necessities (shelter, food, water) then give yourself two weeks before you buy it. It will get you in the habit of not being frivolous, plus make you think extra hard about whether its really worth buying.

6. Try to live debt free. Of course our mortgages cannot be avoided, but does anyone really take the time to sit down and think about how much money they waste in interest? If you take out a seven-year 25k car loan, I can assure you it is THOUSANDS of dollars that you just flushed down the drain. I started SAVING the equivalent of a monthly car payment two years ago, and guess what....I'm almost to buying a car in cash. Once I do, I can start saving for the next one. From 18 to 62 its not unreasonable to state that you can probably spend tens of thousands in interest payments if you only take out loans to pay for cars.

Credit cards are another major hazard. If you actually really need to build your credit, open one up, shred the card they send, set one bill on autopay, and set the card to autopay. Avoid credit cards as much as humanly possible. I spent tens of thousands (and my balance was never more than 5k in credit card debt) because of credit cards. That money could have gone towards my retirement.

7. Do not be vain. You do not need to prove that you are successful to anyone, ever. Vanity kills our wallets. I drive an 02 hatchback that looks like a complete loser-mobile. Sure I want a new car, now. And sure I could go get a car loan and get one today. But I also am not willing to pay a bank thousands of dollars to get a loan. I did that before, and then the car was totaled within two years.

8. Did I mention save? Here's a good reason to. If you save up 5k over several years, and leave it alone, that's a good start on an emergency fund. Once you're there, you can call your insurance companies and have your deductibles raised. Sure you'll have to dish out more if there's a claim, but your monthly payments will be reduced! That saves a lot of money over time (far more than you'd spend on a deductible).

9. Speaking of time, be in it for the long hall. The benefits of saving and investing money take YEARS to really be felt. Do not think of your finances in terms of months, or even years. Financially plan one decade at a time with an eye towards your retirement.

10. Your money is an asset...that can make you more money. Now I'm not talking about going out tomorrow and buying a bunch of penny stocks. That's just stupid. But your money put to certain uses can make you more money. Read everything you can about investing your money, into stocks, real estate, bonds, etc. Every dollar you waste on that xbox subscription or that expensive truck payment could have been invested, and it could have made you more money in the long run. Again, and I can't stress this one enough, don't fall for "get rich soon" schemes. If you read a piece of financial advice and think "damn that would take a really long time" then chances are its actually sound financial advice.

11. You do not have to go to college. If you are willing to get into a trade, like becoming an electrician, then trade schools are FAR cheaper than a bachelor's degree. There is a narrowing gap between how much a "college" job pays, and how much trades pay. Besides that, about 85% of degrees out there are completely worthless in terms of job opportunity. I don't hate education: I'm currently paying my way through an MA degree in history. If you are eighteen though, you do not need to go to college. If you think you should for the "social" experience, trust me its not worth the tens of thousands in student loan debt. My sister is currently sitting at 90k in debt for just a bachelors, and the only entry level jobs she can find are far less than 60k a year. She's financially screwed for the next couple of decades, and probably can never achieve financial freedom.

If you do go to college, think very VERY carefully about what degree you pursue. At one point I wanted to go to school for chemistry. Guess what? Chemist don't make a lot....but chemical engineers do. That's two different degree programs generally. I went another route and got a degree in "Fire Administration"...I didn't need it. No one I work with has a degree, and I still have 15k in student loan debt. It wasn't worth it, and had I just entered the workforce sooner I'd be making more money. If you find a program that has good job prospects, great! Find a way to NOT to accumulate tens of thousands in debt. Join the national guard, flip hamburgers in the chow hall on drill weekends, and most states will pay for your education. Or work full time, and pay for a degree bit by little bit. Start with two years in a community college! And for the record, studies show that most self-made millionaires didn't go to an Ivy League school.




If there is anything anyone would like to add please feel free to. There is so much more that can be said about this! And for those that are going to come here and say "money isn't everything": if you are a guy who wants to start a family, then it is everything. YOU are responsible for providing for a family. And if you don't care about your finances, then you have no room to complain about the rich guy up the road, or call it "unfair". Educate yourself as much as you can, and build your wealth over time. I'm not saying never buy things you want: by all means do so, but get to some financial goals before you do, and never rush to buy a "want".

 

No, but thanks! I'll check him out. I really enjoyed Dave Ramsey's book, and Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter. I wish that they'd start teaching some of this stuff in high-school. Where I work there are kids that are hired "off the street" and have no idea how lucky they are to have a good paying job! Some of them are even eighteen or nineteen. I make them all sit through my lecture on finances, because just about every single one of them wants to go out and buy a 35k pickup truck two months after getting hired!