welcome back YouTube in this video we're
gonna be going over the biggest mistakes
that people make in their 20s and how
making those mistakes can actually have
a massively negative effect on the rest
of your life and we're going to be
talking about the biggest five money
pits in your 20s and more importantly
how to avoid them stay tuned
alright guys so we're gonna actually
countdown of the biggest five mistakes
that people make in their 20s that doom
them to be poor at the rest of their
life we're gonna count down from the
fifth all the way down to the first
number one biggest worst mistake that
you can possibly make in your 20 so
number five is buying an expensive car
and I know it might sound hypocritical
with this sitting behind me but my first
car when I actually was earlier in my
Century that I actually flew from Oregon
all the way to Kentucky and drove all
the way across the country because my
grandparents didn't need that car
anymore so it literally cost me less
than $3,000 completely all cash and I
had no payments no interest and nothing
because what a lot of people don't
understand is that a car is a
depreciating asset and when people
actually go out and buy expensive new
cars the second that they drive that car
off of the parking lot of the dealership
it literally loses thousands of dollars
of value and most people actually have
these huge loans on their cars and
they'll get to the point where they
actually owe more on the loan for their
car then their car is even actually
worth and I'm not trying to say that you
shouldn't get a car no matter what in
your 20s I understand that most people
especially in the USA you need a car to
actually go to work and do normal things
in your life but what I am saying is as
a general rule of thumb you should not
be spending more than 10% of your
after-tax income on a car right and what
I mean by that is if you make $1,000 per
month then your total car payment
insurance everything to do with your car
should not total more than 10% of that
or $100 one of the best pieces of advice
that I ever got when I was early in my
20s was if you can't afford to buy it in
cash and be completely comfortable then
you can't afford it so all these people
in their 20s going out and buying
$50,000 $100,000 cars when they
absolutely can't afford it and they just
go into a huge amounts of debt it ends
up really catching up with you once you
are later on into your 20s another huge
mistake that young people are making
every single day is avoiding risk and I
know that might not sound conventional
what I mean by that is that people have
to take risks when they're in their 20s
when you're young and you have no
responsibilities you don't have a family
you
a mortgage payment those are the best
times in your life to go all-in on a
start-up or to go all-in on starting a
YouTube channel or to go all-in starting
an e-commerce business or betting on
yourself and actually becoming an
entrepreneur there's never a better time
in your life I promise you you'll never
have less responsibilities no matter how
much responsibility you feel like you
have right now you'll never have less
responsibility than you do when you are
in your early 20s and younger so it's
the best time to actually bet on
yourself and take a risk and even if it
doesn't work out even if you work as
hard as you can and you still can I
can't make it work you're still gonna
have a years ahead of you to actually go
out and try new things take new risks or
if you need to go out and just get a
traditional job because think about it
like this if I didn't take a risk back
when I was 23 24 years old quitting my
job working 80 hours a week as an
accountant I would probably be an
accountant managing somewhere in a
cubicle working 80-hour weeks right now
instead of you know buying my dream
house on my dream car and traveling the
world for over five years you have to
take risks when you are in your early
twenties and I'm not saying go out there
and be reckless right be intelligent but
take intelligent risk right do the
research and actually do your due
diligence and then work extremely hard
and oftentimes you'll see that those
risks sometimes have a weird habit of
paying off huge financial mistake and
number three is splurging on expenses
and let me actually explain what I mean
by that because people in their 20s are
going out and getting Starbucks every
morning they're going out to eat every
single night and then they're going to
the bar with all of their friends and
they're doing this six nights a week and
then they're telling me Kevin I don't
have any money I don't know what's
happening if you have to actually in
your 20s develop responsible spending
habits relative to your income right
because if you're making a thousand
dollars a month or if you're making
$10,000 a month then you have to have
different habits when it comes to
spending but people that are making
$1,000 a month but have $10,000 a month
earning habits right they're not gonna
be in a position to actually save money
and when you're in your 20s you have to
develop good habits to be able to save
money
because it's gonna give you huge huge
payoffs and down the line when you
actually can save up some money and
develop those habits they're gonna last
you a lifetime and the second mistake
that you have to make sure that you
avoid when you're in your 20s which is
an absolute money pit is skipping
out on 401k contributions from your
employer and let me explain what I mean
by that I don't blame you if you don't
know what a 401k is right because they
don't teach the important stuff in
school but for the most part if you have
an employer a 401k match from your
employer is more or less free money
essentially what it allows you to do is
as an employee you can take out a
percentage of your paycheck every single
month and invest that or save it
completely tax-free and you can allow
this money to build and build until you
finally take it out then you pay taxes
on it you know many many years down the
line once that money has had a chance to
massively massively expand due to what
is called compound interest Albert
Einstein said that compound interest is
the eighth wonder of the world and he
who understands it earns it and he who
doesn't pays it and compound interest is
one of the most important things you can
possibly understand when you are early
in your 20s or even younger
right because compound interest is
what's going to make you have you know
multiple millions of dollars when you
actually are their age to retire without
actually contributing that much money
every single month and just to break it
down with some simple math if you
started contributing to your 401 K just
a hundred dollars per week by the time
that you reach 65 you'll have saved
almost two million dollars but instead
if you start at age thirty instead of
age twenty and you invest for only
thirty five years until the age of
sixty-five you'll only have just over
eight hundred thousand dollars instead
of nearly two million which is over a
million dollar mistake don't do that and
the biggest mistake of all that I see
people make in their 20s again and again
and again is getting into massive
crippling student debt without any
actual direction or meaning and let me
explain what I mean because I'm not
necessarily saying that college isn't
for everyone I went to college and I had
an amazing time I learned a lot about
myself and I met a lot of amazing people
but you have to be intentional and what
I mean by that is a lot of people go
into college and they don't really know
what they want to study they just
finished high school and colleges the
next thing right they're going to
college to make their parents happy
they're going to college because it's
what people do but they don't actually
have any plan for what they want to do
with their
and so they end up majoring in something
like anthropology or sociology which are
very interesting subjects but it's very
difficult to actually go and get a job I
have a lot of people who I went to
college with that majored in
anthropology or communications and they
ended up working at Costco making
rotisserie chickens so if you are gonna
go to college all I'm saying is be
careful what you actually choose your
major in choose something not only that
you're passionate about but also
something that actually has the
capability of creating and giving you a
real high paying job once you graduate
college otherwise I see people every
single day go to college get up rack up
$50,000 or $100,000 of student loan debt
and then not able to even get a job
because they decided to major in
something like anthropology that they
were interested in but that no one is
hiring for and last but not least I do
want to give a big shout-out to our
Comment winner from last video every
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