… And some to avoid 😉 On this episode I take a deep dive into what I could have done in my 20’s to set myself up better financially, and avoided a lot of stress. Learn from my mistakes!
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #54 – Six Financial Beliefs to Embrace in Your 20’s
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
If you could go back in time and give yourself financial advice, what would you say? My longtime followers know I’ve had many struggles to build wealth over the years. I’ve bought stocks because of FOMO and lack of education, only to see them crash and wipe out half my hard earned hustle cash, I’ve invested into real estate with the wrong people and end up spending a ton of time, energy and stress digging my way out, I’ve taken too many things on and crashed my energy levels, I’ve bought stocks to see them get shorted by greedy hedge fund players. I’ve also done a lot of things right. I didn’t get to where I’m at with only losses, I’ve had some great wins as well. It’s only because of the skills I learned as a result of those experiences that I was able to put myself in the financial position I find myself in today. In this episode, I reflect on the things I wish I’d known about money back in my 20’s, and whether or not they would have led me to where I am today, or even beyond.
Take risks with starting businesses, but protect your starting capital when you invest!
Building net worth is done fastest inside your own company. The younger you start, the more time compounds your business growth. There is a lot of talk about the magic of compounding money, but even more impactful is the magic of time compounding the growth of your business. If you’re taking enough smart risks, chances are, you only need one of those to pay off to make up for those that fail. And you’re going to be much better off with that one success than if you had held back from taking a risk at all. You can recover from bad investments, but you will never win back invaluable missed opportunities. Follow your gut.
Story: starting Direct Sales business, making cash then losing it in tech stocks. Starting REI company, now starting Indestructible Wealth.
Embrace compounding interest
In order to balance out those risks, plan on taking advantage of the power of compounding interest. The average return on a simple index fund is around 8%. If you put $5000 away when you are 18 years old, without touching it, it’ll be $10k at 25. That same $5k will turn to $320 grand by the time you’re 60 years old without adding to it. Imagine what would happen if you kept making regular contributions. The power of compounding interests has to be a part of your wealth plan.
Story: Economics professor Dr. Coppock. Dollar cost average early!
Your home is your biggest liability
I know this one is controversial, but it’s true. Now, I’m not saying don’t go out and buy a home if that’s your plan. I’m a homeowner. I value having a home. But don’t fall for the trap of rushing out to buy a home as soon as possible, and don’t think of it as an investment. It’s not an investment, it’s a home.
Story: My home today – insane costs
Relationship capital is your greatest asset
Money is great when you have it. But when you don’t, relationships are what matter most. Your network can introduce you to the person, or idea, that changes your life. It’s those relationships that can help you start a new business if things go south. Take it from me, having the right people in your life is worth more than any amount of money. The rich build networks, everyone else looks for work.
Story: The people who move fastest typically have the most relationships of people that know, like, and trust them when they start. 10 texts and $2 million raised for self-storage fund
Multiple income streams are crucial. Make sure they aren’t MSD’s.
No matter what you are doing to make money today, nothing lasts forever. You can’t count on one income stream forever. Focus on multiple sources, especially passive income. Make sure at least one is directly under your control. Be assured that, if one source goes away, even your largest, you would not be forced to change your lifestyle.
Story: REI, especially flipping homes
Ego is your greatest overhead
Nothing will cost you more in life than your ego, not bad investments, not missed opportunities – nothing. Ego is the biggest reason most people don’t follow these six rules. It causes you to tank relationships, spend money frivolously instead of investing it, put all your money into one basket, and worse. It causes you to want to LOOK GOOD. EGO = Edging God Out.
I wish I could go back and teach myself these principles. It’s never too late, even for me! Start now and set yourself up for long term financial success by avoiding these easy pitfalls.