If You’re Not Getting Rich in your 20s, You’re Doing it Wrong


Make sure your 40s are even better than your 20s.

Whenever something unusually interesting in the field of personal finance shows up in the news, Mr. Money Mustache hears about it. Our diligent network of Mustachian Volunteer Spies combs and filters the world’s information, both for pearls of wisdom and pellets of comically misinformed dung. Although I take steps to remain on a low-information diet, I still enjoy hearing about financial trends in our society, since this blog is all about changing the trends.

So people send me updates on things like tiny houses, urban planning breakthroughs, people who manage to blow even a double Silicon Valley salary and appear clueless about where it’s all going, and major league players like NFL Mathlete John Urschel who has been known to sleep in his Nissan Versa*. The world seems refreshed to see examples of high-wealth people living lifestyles of below-average consumption.

But one of the most interesting articles in recent memory has been making the rounds on social media this month, and it has fired up many Mustachians because it combines just enough spirited and uplifting “Fuck Yeah” insight on the good life, with a well-intentioned but horribly wrong conclusion. It’s well written and very persuasive.  With 2.3 million “likes” on Facebook (up from 1.2m last time I checked), it has probably fooled thousands of financially suicidal people into thinking they are not sabotaging their own lives after all. In fact, I suspect that article has gone viral because it tells people exactly what they want to hear: “Go ahead, be irresponsible and party on. This is the path to a better future.”

The article is called “If You Have Savings in Your 20s, You’re Doing Something Wrong.” To be fair, it appeared in Elite Daily, which is somewhat of a notorious clickbait forward-this-to-your-facebook-friends content mill** to begin with. But there are some brains behind the article and I agreed with about half of it, so it is worth properly ridiculing the conclusion right here, in order to Fix the Internet.

dinnertimeSo the author, Lauren Martin, seems to be a young, fun-loving person living in New York City. Having recently spent a few days there doing the old “Ha ha haah, aren’t our lives so prosperous!” clinking of cocktail glasses in expensive restaurants with attractive entrepreneurial people and delicious food flying around everywhere, I have a fresh memory of the vibe of that lifestyle. It makes you feel powerful, and feeling powerful is a useful precursor to actually being powerful – gaining the power to live a happy and excellent life.

So she goes into this narrative about how she came to the city with an overly frugal mindset, worried about money and denying herself the pleasures of restaurants, clubbing and taxi rides. A wiser friend encouraged her to loosen up: “Don’t save money. Make more money.”

This leads to a series of enthusiastic verses like these:

“When you live your life around your retirement fund, you may as well retire now. You can’t make a mark on the world if you’re too cheap to live in it.

Refusing to give yourself the luxury of enjoying your money negates the whole point of making it.

Your 20s are not the time to save; they’re the time to gamble. $200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.”

Sounds reasonable, right? How could I take exception with any of that?

I take exception because I’ve been in exactly that place. I arrived in my 20s with just the same sparky excitement for the big city, fun nights out, rapid career advancement and living to its fullest. Most motivated young people show up with the same dreams.

The difference is how you come out of those 20s.  At best, the advice above will get you some good memories, a strong career, a slightly larger waistline and weaker liver, and a negligible net worth. Better than the average fate, but a huge waste of an opportunity if you ask me.

With just a slight tweak on the money strategy, I came out with the same exhilarating decade of memories, good friends around the continent, and a beautiful and accomplished soon-to-be-wife. With the added benefits of a leathery shell of Life Battle Armor from the explosion of good-old-fashioned hard work and sacrifice, and the better part of a million dollars, which has continued to support the good life and grow to this day just before my 41st birthday.

Because here’s the thing about your 20s. They are the time to work. The very, very best time in your life to work your ass off and create an exponential snowball of money, skills, and friendships. Your brain will never be more sponge-like and inexhaustible. You will never feel more motivated and less cynical than you do now. And you will never have another decade of pre-childraising freedom in your life. For the roughly 90% of people who plan to have children at some point make note of the following two bricks of wisdom:

• No matter how much you like working right now, Shit can get Old … fast.
• Kids are way more work than you expect, accelerating the aging of the aforementioned Shit.

These days, kids tend to happen in your 30s. If you attempt that feat with nothing but a well-networked career and a hangover, your life will suck. You need to be well back from the financial cliff, not worried about how you’ll cover the next round of bill payments if you lose your job. It works even better if you’re completely financially independent by that point.

Gaining your Pleasure through Creation, not Consumption

The Elite Daily article builds its case around advancement, networking, and socialization. All good things, to be sure, but also a bit of an illusion. We all like to fantasize about a $60,000 raise brought about by drinking the right mixed drinks in the company of the right influential people. And sure, maybe occasionally things like that do happen. But to think of this as an actual strategy for getting ahead is roughly as smart as bringing your lucky numbers to the lottery vendor faithfully every week and crossing your fingers for the big win. In real life (even New York City real life), you get paid for getting really difficult shit done, better than anybody else can do it. 

This means fiddling with meticulous, gigantic spreadsheets at 11:56 PM so you can get the impressively casual email to the department polished and sent by 2:30am. Or wiring your brain to source code and compiler windows spread out across three 34″ monitors on your stand-up desk while you design software in zen-like silence at 6am before everyone else shows up at work. Or revising and re-researching your latest article for Elite Daily for the 55th time so it’s better and more viral than any article ever written before. It means training your body and mind in your off hours so that you can perform better than anyone else in the on hours. Inhaling books on investment, psychology, nutrition. Barbells and pullup racks in your apartment where your peers keep the Louis Vuitton purses and Apple products. Mixed greens in your apartment fridge where your peers keep redbulls and $50 bottles of vodka.

Sure, there’s more to life than work. There’s plenty of room at the edges for laughs over fine tequila and winks over surreptitious servings of weed. You can dance and feast and have ill-advised romances and circulate in the penthouse parties of billionaires. But this stuff is just the icing. It doesn’t make a good foundation. Work is the foundation, and all other activities need to be metered carefully to fit around that core of work.

Once you become an Actual Rich Person, with a business drowning in opportunities but short on talent and you deal regularly in financial figures that contain more than one comma, you start to see how this works. It’s easy to have a successful business if you can find really smart people who are willing to do really hard work for you, in exchange for a high salary. But all these younger people seem to just want to sit around and network and have cocktails. All the hard workers already run their own company. When you find that rare eligible workhorse, you grab her and shower her with money and opportunity, hoping she will accept. You need to be that lone workhorse, getting stuff done while everyone else is out late and living off of credit cards and parental subsidies. This is where money comes from.

Luckily, this is a happy situation and something to celebrate rather than dread. Doing your ultimate work is the core of human satisfaction. Filling the rest of your life with fun around this core makes things even better.

If work is your core rather than buying yourself treats, money automatically takes care of itself. This means you don’t need to painfully crimp your lifestyle to dribble a few percent of your income into savings. Instead you painstakingly design your lifestyle so you end up keeping and investing more than half of what you earn. Not hundreds per year. Tens or hundreds of thousands per year.

Sure, you’ll blow a few hundred here and there, but you won’t do something completely apeshit like buying a multi-thousand-dollar wardrobe or financing a new car. These would just be distractions from your real life goals, so why would you allow them to steal your focus?

Working with this level of focus brings you an unusually high income. Balancing it with less personal pampering allows you to spend less than everyone else while feeling like you are living like a rock star. The end result is being relatively wealthy while you’re still fairly young, and then realizing it was a damn good thing you did that, because by age 30 you’re ready to start doing your own thing without having the need to pay the bills get in the way of it. This leads us to our final brick of wisdom for 20 somethings:

•There is a lot more to life than your 20s, and if you do it right, life keeps getting more fun.

Those suburban people who you see who are depressed and in debt and horribly out of shape are the ones who didn’t get a handle on things at your age. Those who are free and fit and healthy are the ones who completely ignored the advice found in the Elite Daily article.

Which path do you choose for yourself, for that 70 year period that follows your 20s?



* The Major League players who are living frugal lifestyles include John Urschel, Ryan Broyles, Alfred Morris and Daniel Norris.

** And no offense Elite D – you’re just a modern incarnation of entertainment/opinion magazine and I can imagine it’s probably a fun place to work. I’m sure you are used to criticism just like I am. But since you happened to tread on my territory I thought it would be great to use you as a lesson in class ;-)

  • ap999 October 11, 2015, 12:03 pm

    I am 31 years old now, and still charging just as hard as I did when I was 20. Just started reading MMM. In my 20s I did exactly what I was supposed to do and that was live below my means and aggressively save and invest. I skipped college, just wasn’t for me. Decided to enlist in the military, didn’t make much but I saved as much as I could every month, I spent about 8 years on active duty, got out when I was about 27 years old. Then got into consulting which is very lucrative, all the long I was programmed to save and invest most of my paychecks, invested in my IRA/401k and continued to put away aggressively in my Taxable account. My taxable investments are larger than my tax deferred investments now. By age 30 I amassed over 500k in net worth in stocks, bonds, P2P lending, crowdfunding, some small real estate investments. My secret, live way below your means, when you get pay raise, ignore it and invest the difference. If and when you do take vacations and splurge on things you like and enjoy, plan for those purchases way in advance and pay for it in cash, also you’ll find if you wait on those purchases longer, you may realize you really don’t need it or after all never even wanted it. Only use a credit card to build credit, which means you charge a little on items you would buy anyway like groceries and gas and pay it off in full every month, treat your credit card like its cash coming out of your checking account. I have built over a 815 FICO score by just doing that, and never had a car loan or home loan that I paid fees or interest on. I have only owned one car in my life which is now 12 years old since i took ownership of it, and still going. Despite saving a lot people think I must of never done any thing fun in my life, well no, I made quite a few trips to vegas with buddies, I just never spent more than I needed too and still enjoyed my self. Have made several trips to Thailand, China, Hong Kong, England, France, India, UAE and probably one or two more that I can’t remember. And yes also spent almost 5 years of my life in either iraq or afghanistan, which i don’t consider vacation spots. I either took advantage of credit card points and point bonuses, or my job had me going in that direction, and I took advantage by having a mini vacation to enjoy and getting work done:) Life’s pretty damn good! I wouldn’t change my 20s for any thing else, I think the 30s and 40s are going to be more fun and rewarding and getting more rich while having fun, if you spend more time working hard and getting rich in your 20s :) Good luck to everyone and happy wealth building.

  • Doug October 11, 2015, 7:56 pm

    There’s another reason to start saving and investing early. A subject that’s been in the news a lot is companies that don’t have enough money in the pension plan for retirees, it’s called unfunded liabilities. The latest one is US Steel, which has restructured and spun off its Canadian operations, which have severe unfunded pension liabilities. Whatever company you younger people are working for, keep in mind the same could happen to the company YOU are working for. Your best defense? Start saving NOW!

  • Natalie October 12, 2015, 1:24 pm

    “Those suburban people who you see who are depressed and in debt and horribly out of shape are the ones who didn’t get a handle on things at your age. Those who are free and fit and healthy are the ones who completely ignored the advice found in the Elite Daily article.”

    I really struggled to reconcile myself with this part of the article. While I agree with most of what you write, I found this comment to be a bit…hmmm…can’t quite find the right word. Judge-y?

    Not everyone wants to live “urban.” I just turned 30 and I am tired of my peers turning their noses up at me when I tell them I live in the suburbs. I don’t make enough money to buy a $500k bungalow in a central location; the suburbs are more affordable and while I don’t especially like my commute, it is a trade off I make so I can continue to live cheap, pay off debt as soon as possible, and live the life I want.

    I consider myself to be in great shape (there are miles of open space at my front door where I can hike and run) and I even took on the challenge of a spending fast recently in order to re-assess my relationship with material goods and instead allocate my hard-earned money toward things like getting rid of our student loan debt (yay professional school!) saving for a family, saving for the future.

    The ‘burbs are what you make of them. Not everyone who lives in the suburbs is miserable and up to their eyeballs in debt. I try to remember that it’s not where I live – it’s HOW I live.

    • Mr. Money Mustache October 12, 2015, 9:00 pm

      Yeah, you have a great point Natalie. I’m kind of fond of the peaceful detached home lifestyle myself. Remember this article is somewhat of a joke – meant to be stylized, talking as if the 20something perspective were the only one in the world – and I know that city-centric people love to make fun of the suburbs.

      Also, I didn’t even mean to imply that ALL suburban people are depressed and sick. I was just referring to those that meet that description.

      • Natalie October 13, 2015, 9:42 am

        Hi there, MMM,

        I realize what you are going for after reading the original Elite Daily article, and I couldn’t agree more. The idea that one must spend recklessly in their 20s in order to be fulfilled – so they can somehow justify “settling down” later in life – is really, really sad to me. Thanks for writing such a thoughtful follow-up to that article, and to my comment as well.


  • Paul Bailey October 12, 2015, 10:30 pm

    This post is an instant MMM classic, just for its motivation factor.

  • Kelly October 14, 2015, 8:16 am

    I did this in my 20’s… and at 35, I’ve regretted it each day since. Worst. Advice. Ever.

  • Doug October 14, 2015, 10:27 am

    This topic is something I can relate to so much that I feel compelled to add another comment. When I was in my 20s and 30s I lost count of how many foolish people (mostly coworkers) were telling me I should blow more money and “live” more. I would ask, spend more on what? The reply was always to buy more rubbish I don’t want or need. I figured, quite correctly, that what I need is more free time than stuff. I would probably still be working if I had a job sharing arrangement something like a month on and a month off. It wouldn’t matter if the time off was unpaid. Most people just didn’t get it. Just this year I have been away for a total of 11 weeks on 2 overseas trips and a road trip and last year a total of about 8 weeks travelling. Add to that many days for day trips and doing other fun things. Where are you going to get that kind of vacation time?

  • John October 16, 2015, 11:10 am

    Not to be “that guy”, but just so you know, that 2.3 million likes is the amount of people that liked EliteDaily, the site, in general, not that article. The article has 70k likes. Yeah though, still a lot, and for a misguided article. At least no one in the comments seems to agree with it either.

  • Kind Viking October 20, 2015, 3:11 pm

    MMM said it here, but just wanted to confirm for the 20 somethings out there reading: no matter how awesome work is now, it will start getting old in your early 30s. Even if you’re making six figures or more, it gets old pretty fast. Being able to look in the rear view mirror and see a huge cash cushion offers a lot of comfort as you wind down your “working” life and prep to retire in your early- to mid-30s.

  • Leslie Van Zee October 27, 2015, 2:18 pm

    That sounds like a bizarre twist on the same old get-rich-quick fallacies, only this time they are fast-forwarding to the part where you enjoy the riches without even mentioning the get-rich formula du jour. One thing I noticed when I moved to San Francisco was how many young twenty-somethings there are around here living it up, going to expensive restaurants and signing up for pricey yoga memberships. This is an incredibly expensive city to live in, and I feel pinched all the time here, even though I’m in my 40s and well into my career. When I see these kids, I just guess that they either are living on financial life support from their parents or racking up the credit card debt. Either way, the piper will have to be paid sooner or later.

  • Sharon October 28, 2015, 10:52 am

    Thank you AGAIN for being the voice of reasonableness! Just read your article compared to this one on learn vest: http://www.learnvest.com/2015/10/a-couples-creative-way-to-pay-off-debt/

    This is real advice young people need to hear!!! That other article should be on the mustachian wall of SHAME!!! Thank you for continuing to give good advice to us youngsters!!!

  • Nicoleandmaggie October 31, 2015, 8:39 am

    My dad is in his late 70s and a multi millionaire thanks to living like Jacob at ERE and investing most of our lives. He still stays in hostels when he travels. And he travels a lot (currently doing el camino in Spain).

  • Sarah T November 13, 2015, 8:43 pm

    I recently discovered MMM and must say ive enjoyed reading the posts and replies. I’m currently weighing a career decision and perhaps I could get your opinions as well. I’m a 27 year old wife, no kids. My husband enjoys his work and makes decent money. I make decent money as a veterinarian, but honestly, ive gotten where I don’t enjoy the work. I love the medicine and the science, and my loyal clients, but as a whole its a career im 100k in student loan debt for and that I spent 7 years in school for and I don’t love it. I have little raise potential without working more hours, will never advance unless I take the workload and risk of opening a practice in a saturated market, and the job itself is very physically demanding. I spend most of my time convincing owners I know more than google and selling them products they wont use. I feel my real calling is in electrical or computer engineering and regret not going that route instead. I’d be making more for less investment right out the gate. Alas, there are no repeats. Should I give up my career and go back to school before we have kids? Should I take that chance going into my 30s? Or should I stick it out with the plan of going part time or retiring asap? We have a mortgage and student loans, but no high interest debt, a nice saving cushion, and the start of retirement accounts.

  • Doug November 14, 2015, 9:54 am

    I just read an article in today’s (Nov. 14) Globe and Mail Report on Business an article titled: Don’t thank me, kids thank our dividends. This article is especially of interest to you family men or women out there. It’s about a couple with 2 kids, who found when they were younger they weren’t too costly and they could live comfortably on $35 grand CDN a year. Rather than blow the difference between their income and this 35 grand they saved and invested the difference. As the kids got older and more costly they found the dividends paid out by their investments helped a lot with their expenses.

    To quote the last paragraph of this article: But for those who can find the money, investing early won’t just set you up for a comfortable retirement. It will help you get through all those expensive years in between.

    Makes good sense to me.

  • Jason December 2, 2015, 8:22 am

    Check out another frugal Canadian kicking ass!!! Paid off his mortgage before his 30th birthday, in three years and two months.


    What’s with it with us Canadian, must be the cold weather :)

  • Jay December 4, 2015, 9:19 am

    MMM- as one of those derided slightly overweight, sub-urban, commuters with a mortgage,.. you know, the people who didn’t get a hold of things in my twenties when I was still in college, then 2 years of art school after my bachelor’s pursuing what I loved, then working at low paying jobs until my early 30s, then scrambling to save and finally having enough to get a small house with my wife in the suburbs, at the sacrifice of 10+ years at an office job that I don’t always love, but pays me at a “teacher’s wage”. I think your “realist” needs to have a conversation with your soo cool online personae and direct a few posts towards your neighbors and those who haven’t already realized the dream at age 30. Most people don’t get this done in their 20s, in fact, other than a couple of people who inherited large sums of money, I know no one who did, or even in their 30s or 40s without working at a high paying tech job. I’m working up the steps of your initial post, somewhere between 4 and 5, not quite able to max out 401k plans due to life’s little expenses, some credit card debt, but luckily no care loans. Most of those suburban people you talk about are trying to live frugally and are much closer to the life and values you espouse here than are the hipster urban 20 and 30-somethings. So, I try to save as much as possible, but realistically, early retirement is still a dream and I’m shooting for partial early retirement by the time I’m 60, and not as a “weak” version of early retirement, but as a hopeful and “realistic” version in my case. So, I’ll keep reading, maybe there are posts in here written more for me, and not just using people like me as a punchline.

    • Dōitashimashite December 5, 2015, 12:08 pm

      Hello Jay and welcome to the path to the good life! Doesn’t matter where you are now, being more conscious about your life choices can only help from here on…

      If you don’t mind a question, you wrote:
      ” the sacrifice of 10+ years at an office job that I don’t always love, but pays me at a “teacher’s wage””

      If I’m reading this right, it seems like you got a degree in art (?) — something you love — and have found yourself over a decade later doing something you don’t love that pays (let me say it as I was a teacher for a few years) crap. Am I right?

      Have you considered changing jobs to something that pays more or that you like? What are you leaning towards?

  • Anthea December 5, 2015, 1:43 pm

    Thanks everyone. All great reads.

    I’m still looking forward to hearing some tips from those like me. I haven’t read any here yet. I posted a week or so ago telling that I’m ending a 30-year marriage. My ex-significant other (husband) wasn’t particularly good at investing, although he demanded to “take care of the family finances.” We’re splitting some investments (far too little) and the proceeds from the sale of our home of 25 years. I want to move forward with a new and more positive financial trajectory.

  • Jay December 5, 2015, 8:09 pm

    Thanks Dōitashimashite for the welcome. Yes, that’s an accurate read and something I’ve been struggling with. I’ve been going back to school on the weekends for the past year, hopes of entering the medical field and though there are parts of what i do now that I love, I could definitely use a change. I’ll keep reading and taking inspiration from this blog. Didnt mean to come off negative, I just hear way too much of going “freelance” and being a creative person is the dream life. I followed that dream right out of college and the realities of needing a corporate job to keep paying student loans and then credit card debt caught up with me. Not looking for pity or to whine, just personal truth and balance. In truth I would recommend this path to anyone in their 20s and wish I’d been better able to follow it myself. Bravo to those of you who are doing it now.

  • Jess December 29, 2015, 10:19 am

    My jaw dropped after reading “$60,000 raise.”

    I am 28. I borrowed $63k to go to college which, thanks to interest, quickly turned into a much larger total. I am snowballing my debt and have paid about $90k so far. I have about $24k to go until I am debt free. I have an emergency savings of $1,000. I have driven the same car that I bought when I was 16; it is 12 years old with almost 200k miles.

    I make $52,000 a year at my day job in corporate sales and about $6,000 a year at my side job as a waitress.

    I feel very behind being a 28 year old making $58k a year. And essentially zero savings. I will be debt free by this time next year as I put approximately $25k per year towards my student loan debt. Curious to hear from anyone on a gauge of my income.

    Is this on par or do I need to be looking into something different career wise? I can google all day and ask a friend or two, but ultimately the people around me seem to be in the same boat of wondering as well.

    • Mr. Money Mustache December 30, 2015, 8:53 am

      Wow Jess, you are doing WAY better than average. Every payment to clear out student loans is increasing your net worth. And with a savings rate as high as yours, you are set for quick increases in wealth as you move on.

      If you keep that type of work ethic and frugality, you will do well in all enterprises through life. And I’d wager you will end up earning more as time goes on – congrats!

    • Wandergazer December 30, 2015, 10:17 am


      Like MMM said, you seem to be doing admirable and on the right track. Having the consciousness to get rid of your debts, set goals, etc. is a big milestone, IMO.

      I am in my 20s and am making approximately $48,000, though I will be pursuing a second stream of income this next year, hoping to get $500 to $1,000 per month extra if it goes well. I feel VERY behind, income wise, because I work at a small firm, but that feeling is quickly negated when I realize that I have great work life balance and essentially low stress.

      Without knowing your specific numbers, you seem to have a good sense of what your savings should be, so seemingly, you are on par. Career wise, how long have you been in sales? Can you move into a position with larger commission/larger overall income? From what I know, software and timeshare sales bring good money in.

  • William Kuhn March 10, 2016, 3:18 am

    As a graduating senior in college, I’ve heard both competing narratives both online and through multiple friends. Like most things, moderation makes the most sense to me. I feel like I am the prime target for this discussion. I am moving to New York this summer and will be making high five-figures doing something I am Excited about. I’ve decided I will build a 3-month emergency fund, max out the Roth IRA, and get the employer 401k match. After that, I plan on getting a simple apartment with some roommates and consciously blowing the rest. I’ll never be 22 again. But I also hope to have a financially liberating 40. I think there is room for both

  • Naomi May 16, 2016, 11:15 pm

    Great article! So glad i happened upon it! I am also wondering if you or any commenters have advice for those of us who have children in our twenties. My boyfriend and i have an (unplanned) 6-month old – he is 24 and i just turned 25. Needless to say we freaked out initially over not being financially prepared, but luckily we have both always been very frugal and have been getting along fine so far. I make about $1500/month working 24 hours a week so i can spend more time with our daughter. He makes about $2500/month working full time and occasionally picks up about $150 on weekends. I have $12,000 in the bank and he has $14,000 but has about 24,000 in student loan debt. I also have an IRA account with about $1000 in it and have good credit. We live rent free with my parents who also provide free childcare and foot the cell phone bills and car insurance through my dads business. I pay nothing for healthcare since my wage is low enough to qualify for medi-cal and i am legally single. Our only expenses are really groceries, gas, diapers, mma gym (for him), and the occasional fun purchase (cheap clothes, cheap food, etc.) We are more then happy living well below our means but also obviously want to eventually live in our own family home, and can’t expect my parents to pay car insurance, cell phones, etc, forever. The public schools here are crap so we have to either send her to private school or move somewhere else. I know i could stack more money if i worked more hours but i really value this time with my baby and would rather push hard once she is in school. My boyfriend is constantly stressed about his debt and is tempted to default on his loan but we’re sure that will come with some repercussions. Anyway sorry for the novel, i’m just wondering if anyone has advice for us on how we can get out of debt and save enough to move our family and hopefully have 1 more kid sooner then later. Btw i also have a tumblr vegan blog w 33,000 followers and counting and am working on a recipe ebook so i see those as possible income streams. We are also working on a fitness/health youtube channel which will hopefully bring in money. I’m guessing no one will see this but i figured i’d give it a shot and see if any kind mustachian can give me some advice!!!!!!

    • Joe M May 22, 2016, 12:41 am

      Don’t default! The interest will kill you, and the debt gets bigger, and follows you forever. Put some cash on it now . Best wishes. Joe.

    • Stephanie July 1, 2016, 1:40 pm

      Hi Naomi,
      Don’t stress at the thought of maybe not getting rich in your 20s. You and your partner are at least thinking about how to get ahead and that puts you way ahead of your peers – including the ones making lots of money without kids. A few main thoughts:
      1. Have a really good look at the student debt: Are there any forgiveness programs he might be eligible for? What is the current interest rate and is there any possibility of refinancing it? Is there any incentive to pay extra on the principle? Defaulting will come back to bite him. Do you have any other debts? (Credit cards, etc? If so check out the interest rates & get them paid off!)
      2. Maintain your own money and don’t be tempted to pay his debts for him. Suze Orman’s “Women and Money” might be a good read for you (should be at the library). You two may end up together forever and having interdependent money will make sense, but just go carefully so that you can feel confident in supporting yourself and your child if necessary.
      3. Start tracking your money and figuring out exactly what you’re spending and where you can save more. Start making whatever style of budget works for you. Given all that awesome family support you two have, your income is actually pretty good.
      4. Review your IRA and see if you’re happy with what’s in it. Is it a Roth IRA or traditional? The rest of this website has lots of good advice. Look for the expense ratio and any extra fees. Once you feel confident about it put little amounts of money in regularly – say $50 every month or whatever dollar amount you can handle. Scheduled auto-transfer is good as long as you always have enough in your checking. You are young and compounding interest is really going to work for you.
      4. Are either of you eligible for a 401k through work? Standard advice is contribute enough to get the match.
      5. Look at that money you have in savings and decide if that’s the best place for it to be.
      6. Trust your gut on that extra time with your baby. Your baby wants you more than she wants anything you can buy for her. Don’t get suckered by all those expensive baby products/foods/toys…Baby needs are pretty simple really.
      I have never ever met a parent who regretted time spent with their child, and I’ve met plenty who are sad on all that time they missed. Also — don’t feel pressured to have your kids too close together. Depending on how many you want you can easily wait a few years. From what I’ve seen 3 years apart seems to be a sweet spot.

      Finally, I would recommend that you continue to read through this blog. There is so much to learn on here and I think you will be able to figure it all out.

      Best of luck and keep up the good work!

  • Rudy SMT May 27, 2016, 1:30 am

    The article on the Elite Daily is just a “catch”. The writer knows how to get attention and viral content out, and it’s a marketing strategy.

    I agree with MMM, in my twenties, I jump the corporate ladder and in my twenties I was earning US$ 4600 Tax-free per month and save US$4000.

    I was in the right direction. Unfortunately, the rough 2008 and the wrong investment network I was in didn’t let me maximize my savings.

    I worked and lived mostly in the Middle East and ASIA, so we don’t have IRA or similar things to start with. Instead, there are thousand of sharks called “Financial Advisor” navigating the waters and selling some crap pension plan.

    Please be aware of Generali, Friend Provident, Zurich and similar crooks.

    So, if you are an expatriate and read this, just open up a brokerage account in Hong Kong or Singapore and buy some ETF or Mutual fund from Ishare or Vanguard to growth your wealth.

    And as MMM said, work hard and save harder so in ten years your expatriate career is over and you can retire back home with your loved one.

  • Mags July 1, 2016, 10:56 am

    Probably one of my favourite articles of all time on this site. As a 22 year old I come back to it again and again and it reminds/motivates me to keep working hard and building my ‘stash.

  • Doug July 25, 2016, 9:05 pm

    I found another reason to start saving early. In the July 18 Globe and Mail, report on Business, there’s an article titled: Growing older has an array of hidden costs. It’s about a guy 88 years old, living in a condo in Winnipeg, and the extra expenses he has. These include $160 for pain killers for his back troubles and another $40 for vitamins prescribed by his doctor. Other expenses include $170/month for taxi bills because he can’t easily get on and off public transportation. The cost of an electric scooter, wheelchair, and special canes cost another $4600 over the last 3 years. Another is higher heating costs, and grocery bills inflated by the need to purchase prepared foods, and $180 per month for cleaning services. He’s better off financially than many retirees and likes to travel. The problem is the travel medical insurance for a planned trip to Mexico are expected to be $8000. By contrast I (55 years old) paid $200 for insurance to travel in India for 2 months.

    So there you have it, if you take poor care of your health and don’t live long it doesn’t matter if getting old has extra expenses. However, if you DO take care of yourself and there’s a good chance you’ll live to be 80 or more, extra expenses could be coming your way so that’s all the more reason to START SAVING NOW!

  • Stephen July 29, 2016, 2:37 am

    Well, I spent my 20s extracting myself from a dreadful family background, and getting a PhD. So when I got that degree, just weeks before my 31st birthday, I was certainly not rich and I had some debt ($22,000 for 12 years of higher education). But that degree was like a lifetime warranty to employers that I could be relied on for difficult stuff and that I had grit and perseverance, and they would have been right on both counts. I’ve been employed in secure, well-paying and extremely interesting jobs ever since, even though I left academia. Or make that: Because I left academia. So if you can’t get rich, getting educated in your 20s is a very good second-best option for the quality of your remaining years of life! But I agree: don’t piss that time away.

  • Randy September 17, 2016, 2:50 pm

    I’m recently out of my 20s (just turned 31) and I’d say I made some very good financial choices, contributing to my companies’s 401k and dropping money into a Roth IRA on a somewhat regular basis. However, I beat myself up almost every day because of some very irresponsible choices that I also made in my 20s. Right around the time I turned 25 I started making more money than I ever had before and it turned me into a money blowing machine, like to the relative extreme. My mentality: I’m young, I’m already contributing to my retirement, I’m still making more money than I’m spending (barely), I don’t plan on buying a house anytime soon, so what do I need all that money for?
    Then I met my soon to be wife and everything changed. All of a sudden all the things that I had purchased didn’t matter as much, in fact I don’t own any of it anymore leaving me with nothing to show for my spending habits. The realization of what my life will eventually become was a lot more clear and I knew I needed to make a change.
    It’s not that I think I’m in a terrible situation, but life certainly isn’t as easy as it very well could have been. I didn’t have enough foreword thinking in my 20s and didn’t plan on the things that would eventually make me happy which I’m paying for now as I dig myself out of some very unnecessary debt. Point is, I wish I hadn’t taken money for granted, at least not as much as I had.

  • Molly October 13, 2016, 8:26 am

    I know I’m late in the game in this one, but I wonder what your advice is for somebody who has already wasted years not getting rich. I’m 27 and though I have been working hard these past 5 years and saving a decent amount of money, I know I should have been doing better. With our annual income before tax having recently increased to $120,000, we only have $65,000 in savings, about $10,000 combined in 401k/403b plans (with no emplayer match), and $20,000 in savings bonds received from family when we were kids. Granted, we have paid about 30% on our $150,000 house, but I’m disappointed in our savings. I know we need to stop letting our savings sit in a bank account and get investing. It is disappointing to read these articles, because I realize I’m so far behind the game here because we want to start having kids now. Im motivated to work towards financial freedom and at this point I’m not quite sure what the next best step is. Pay off our house? Invest in betterment and vanguard? Invest a lot at once or over time? How much should I keep in an emergency fund?

  • Yasmine K. March 26, 2017, 8:33 pm

    I love this article. I too live in NYC and I see so many young people fall into the trap of paying high rent for the fancy apartment, blow bonuses at Saks, and getting black out drunk four nights out of the week. Sometimes I talk to the younger analysts and am shocked to hear that they pay at least $2000 for rent per month for shared space. Most of them are in the red before bonus season rolls around. No margin of safety for tough situations like job loss, etc.
    I turned 30 a few months ago and realized that I got over FOMO about three years back and have been an obsessive saver since I earned my first paycheck out of school. I was still living in walk-up apartments even as I earned six-figure salaries ever since I moved here before we bought our first apartment.
    Unfortunately, many here buy into the romanticism of NYC too much and cannot comprehend frugality. The city has so much to offer beyond fancy restaurants, sugary cocktails and Bergdorf Goodman.

  • Mark March 28, 2017, 7:54 pm

    This is the 3rd articles I’ve read since listening to your interview with Tim Ferris. Your ideas of lifestyle design, the importance of your 20s and looking past them are great! Specifically I love the idea of the “”Exponential snowball of money, skills and friendships.” I’m 32 most days and though my wife and I invested more than half of our income when we had it into investment I wish I took more time to figure how to get more of the exponential. We ended up getting into real estate which I felt had some of those exponential aspects to it, compounding interest blah blah blah.

    The idea of click bait is a great form of propaganda but there is hope in the form of some brilliant 20 something year olds that are able to filter through all the bullshit and get their hustle on.

    I appreciate this post and look forward to reading more.


  • Kevin May 24, 2017, 11:10 am

    yea i think you nailed it. you dont want to make the mistake of thinking life is endless and you have plenty of time to do responsible things later on. once again, the ED writer suffers from the same delusion that spending = enjoyment, and thus spraying money everywhere with the equivalent of a fire hose is the best way to maximize your 20’s. yes, we should all strive to enjoy as much of our life as possible, regardless of our age, but it would be nice to arrive at age 30 with a net worth significantly above zero and already several steps closer to the end of our necessary working careers, that way life doesn’t suck at 40+ (job we’ve grown tired of, stress-inducing debts, no time to pursue passions or enjoy friends/family). aligning our enjoyment with frugality and financial awareness seems to be the best of all worlds.

  • Car Free Mark August 2, 2017, 3:43 pm

    Some excellent comments here. I bounced around with low wage jobs and grad school in my 20s and didn’t have my first professional job until I was 30. I immediately bought a new car when I started that job. Not even a week later I realized I made a big financial mistake.

    A few years later I moved to a big city, ditched the car and was able to save a bigger chunk of my paycheck by reducing expenses. I realized the amount of wealth Americans commit to automobiles is disproportionate to the amount of value one gets from owning a car (at least for me). The additional $8-$10k/year that’s ordinarily committed to gas, car maintenance, insurance, etc. can compound into hundreds of thousands of dollars in savings over the course of a career if that money is invested.

  • David October 5, 2018, 11:48 am

    “This isn’t the time to safeguard. — It’s the time to bet all your chips and hope to make it big.”

    If you “bet all your chips” and lose, YOU’RE HOMELESS!

  • David October 5, 2018, 11:52 am

    “When you die, you can’t take your money with you.”

    If you’re in debt when you die, you’ve taken more than you’ve given. That’s unethical.

  • David October 5, 2018, 11:58 am

    “When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved. You’re going to be full of regret.”

    When I look back, I AM grateful that, at age 25, I put 20% down on a $35k home in the inner city. It’s now worth over $500k as a teardown!

  • David October 5, 2018, 11:59 am

    (…and I own it free and clear!)


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