“How can you build your wealth in your 20s?”- Are you daydreaming about that six-figure income? Well, 20s are the best time to making your dream into reality. Start to take actions to build your wealth now.
I believe in practical actions rather than a boring theory when it comes to building wealth in the 20s. I’m not saying that strategy is not important. But surely that strategy must be simple and practical to build wealth.
I’m not someone who born with a silver spoon in mouth. So I understand the value of money. In my 20s now I’m also implementing ways to build my wealth. In my current blog, I’d like to share my experience related to wealth building in 20s.
How can you build your wealth in your 20s?
No matter what’s your financial status right now. But with proper plans and actions, you can grow financially. Do you think building wealth is very difficult? Well, just look around! There are more real heroes in the world who were zero once in wealth in their life.
I’ve read the book “Think and Grow Rich“. This book is written on the basis of reality. For more than a decade, the author interviewed some of the wealthiest and most successful people in the world and penned this book.
While thinking about building wealth always be open-minded. Constantly try to figure out how can you build wealth in your 20s. Always try to be smart with your money.
Prepare a kickass strategy to build wealth in your 20s
Pre-planning is really important. Well, now don’t think of getting started with pen and paper. You don’t need to write down your wealth-building plans with a lot of theory. If at all you want to write down your wealth-building plans, keep it simple. Make simple points.
You just need to consider 3 things while planning of wealth building in your 20s. They are- ‘Why’, ‘When’ and ‘How’. Before figuring out the answer for how can you build your wealth in your 20s, you must be clear about ‘why’ and ‘when’.
Well, here ‘why’ defines the purpose and ‘when’ defines the time period of wealth building. A well defined financial goals help to manage your money. Let me explain you with an example-“I want $15,000. Why- To build my own house. When- Within the next 10 years”. Like this, after becoming clear about purpose and time period, I should think about how to build wealth in the next 10 years.
13 Practical ways to grow your wealth- Simple and Easy
Frugal living helps to save more money in your 20s. While building wealth saving is equally important as earning. So, I advise you to choose to be frugal if you really want to become wealthy.
Let me elaborate on some practical ways which will help you to put a strong foundation to your wealth-building journey.
|1. Build a money mindset which leads to build your wealth|
|2. Learn to be a smart consumer while shopping in your 20s|
|3. Give importance to education|
|4. Choose a career which you enjoy and grow financially|
|5. Invest in yourself in your 20s|
|6. Think big, dream big|
|7. Maximise your earning capacity|
|8. Quit your job if you are not growing financially|
|9. Create multiple streams of income|
|10. Don’t fear to take calculated risks|
|11. Think about self-employment and business|
|12. Learn about passive income to build wealth in 20s|
|13. Don’t date a wrong person|
1.Build a money mindset which leads to build your wealth
I feel the right kind of mindset plays an important role while thinking about wealth. I’ve seen many people who always say- “They are very lucky. They are born with a silver spoon in a mouth. I’m not lucky. I can’t be wealthy”.
These are all negative thoughts which can’t help you to grow financially. First, you should change your mindset. See real-life examples like Jack Ma, Sandeep Maheshwari and many more people. All these people are wealthy and successful because of their right mindset.
How to create the right kind of money mindset in 20s?
Here I can share my experience in creating the right kind of money mindset. Well, I read successful people’s books. I try to understand their life, their struggles.
I have read money-related books. And one book is really my favourite. The book name is ‘Rich Dad Poor Dad’, I’ve learnt so many things from this book. This book is helping me to save more money.
2. Learn to be a smart consumer while shopping in your 20s
If you go shopping frequently with your friends, then it’s time to take a pause and think about your spending habit. I’ve seen some of my friends who want a new dress, new accessories on every little occasion.
What I’m trying to say is, don’t decor your cupboard with a lot of clothes and accessories. Learn to be a smart consumer and save money. Think twice while purchasing. Don’t buy costly products because of peer pressure.
Compare prices and bargain whenever necessary. Even you can opt for online shopping which provide discounts. Learn to save money on your daily life. This will help you to build your wealth.
3. Give importance to education
I’ve seen many successful and wealthy people are college dropouts! And even in film industry child artists are earning well without education. Sometimes I used to think that only college dropouts get successful and there is no value for education! But I was totally wrong here.
There are some exceptions where people are now wealthy who have not completed their education. But it’s a rare case. So first complete your education. Completing education will be your plus point one or the other way while building your wealth.
4. Choose a career which you enjoy and grow financially
Don’t get into any career just because your friends and parents telling you. And even just don’t choose a career because you want more money. Choose a career which you are really interested.
Unless you are not interested in your work you won’t give your 100%. Then ultimately you can’t grow even financially. At the beginning even if you earn less in your career make sure that you are really passionate about your work. Slowly figure out ways to grow your career and earn more money.
5. Invest in yourself in your 20s
Grab all the opportunities where you can invest in yourself which helps to get the highest returns in future. Here what I mean is, invest money on the right things like books, professional course, personality development etc.
I personally invest my money to either build my career or on the good books. I prefer to read non-fiction books. I invest my money on finance-related books which help me to learn and earn more.
You can even learn finance-related courses. All this will help you to build wealth.
6. Think big, dream big
Few years ago even my thinking was narrow when it comes building wealth. But as now I’ve seen a lot of interviews of successful people on YouTube, my thinking process is changing. I’ve learnt that first I should think big and dream big to grow financially.
One can create a mindset of creating more wealth by reading good books. When we think big then our brain works in that direction. We get more ideas to create wealth. So target the highest financial goal in your life.
Positive thinking and dreaming big will help you to energise to reach your wealth-building goal.
7. Maximise your earning capacity in 20s
You must maximise your earning capacity. Now you may think how to maximise it? Well, earning capacity depends on various things. Such as education background, job location, your skills etc.
I believe in learning new things which helps in my career growth. I’ve done various courses like basics of computer, typing, accounting etc. So all these additional skills are helping me in my career.
So I think you can also maximise your earning capacity by learning different skills. I also suggest you to improve other skills like speaking English, communication skill etc. This will help you in your career and you can grow financially.
8. Quit your job if you are not growing financially
If you are not finding any financial growth at your job then switch your job. Even I’ve left my job recently. I was not finding any growth there. Now after quitting my job, I’m learning to follow my dream career without spending a big buck. This is my calculated risk.
In the early 20s as one doesn’t have many financial responsibilities so one can take this type of risks. If you can’t quit the job immediately then at least find other jobs then switch. Don’t settle and compromise in your life if you really want to build your wealth.
9. Create multiple streams of income
Day-by-day inflation is increasing. So, creating multiple streams of income will help you to build your wealth. Depending on a single source of income may affect your wealth-building plans.
I also try to find out more income sources which helps me to save more money. If you are doing a job then you can try other things also like taking tuition classes for kids, renting out your car, renting out a space etc which help you to earn more.
10. Don’t fear to take calculated risks in your 20s
I really feel early 20s are the best time to take more risks. So never fear to take risks related to money in your 20s. One must take financial risks to grow financially in life.
Don’t allow your fear to become a barrier in your financial growth. But I’m not saying you to blindly take financial risks. You must take calculated risks. Everyone’s risk-taking capacity will be different. Which will be based on the income and financial responsibilities. In my life I’m taking calculated risks by investing in mutual funds.
Analyse your risk-taking capacity when it comes to money. Make sure you won’t lose all the money by taking big risks. Make smart moves with your money which help you to build your wealth in 20s.
11. Think about self-employment and business
I think that self-employment or business has more potential to earn well. You can also think about it. If you are doing job currently then you can start a small side business.
To be honest, personally I am interested in self-employment and business. To be self-employed I needed initial investment. So, I started a small e-book business with zero investment. Earned some money and saved. But it was not enough. I asked myself how much money should I save in my 20s to opt self-employment? And the answer was “2-3 months’ salary! If I do any job”.
This was the reason I had joined a job. And I was saving 70-80% of my monthly salary. My mind was very clear that I should save the maximum percent of my earnings. After working for 3 months I thought to continue my job. I continued my job a few more months. So that I can earn some more money and save.
12. Learn about passive income to build wealth in 20s
Do you know you can be wealthy by passive income? Well, passive income requires a little initial effort but in the long run, you can earn more money. “Passive income”, as the word itself says that it does not need your presence, it automatically generates income.
Be aware of such passive income streams. Initially, if you are ready to do one time efforts then you will be amazed by your wealth in the future.
13. Don’t date a wrong person
Here I remember a joke which was sent by my friend on whats app. Let me share it with you-
Boy was holding a girl’s hand very tightly and they were roaming in a mall.
People- “It’s so romantic”.
Boy- “It’s not romantic, it’s economic!!”
Well, here I just want to point out that don’t date a wrong person. Whether you are a girl or a boy you must discuss your financial goals, your career goal with your future partner. True and good relationship does not require costly gifts.
Choosing the wrong person will not allow you to reach your financial goals. Be transparent about your wealth goals with your partner.
Just knowing about how can you build wealth in your 20s will not help you to grow financially. You must also take actions to build your wealth. Implement practical ways in your life.