How to create wealth in your 20s?

Do you feel like you are too young to think about your money and your future? I used to think that, and well, I was wrong. You’re never too young to learn about personal finance. Your 20s are a great time to plan your financial future and work for it. However, sitting and daydreaming about an ideal figure or the perfect house or the best car isn’t financial planning. It’s about setting goals as per your wishlist and putting them into action. Also, the best part is that in current times, you don’t have to wait until you’re 40 or 50 to create your own personal wealth. Now, with the information, tools and technology that is available to you, you can easily create wealth (as per what wealth means to you) as early as your 20s. Wondering how?

Here are 4 habits that will help you create your own personal wealth in your 20s:

Budgeting

It is almost impossible to create wealth in your 20s without building the habit of budgeting. You might feel like it’s okay to not budget if you’re earning enough to get by, but that’s not true. Budgeting is done to meet your financial goals.

Consider this. Budgeting is like making a to-do list, but instead of your day/week/month, you make it for your money. Allot your income to your priorities and leave a little room for random changes. But before you do that, make a special provision for savings. Save before you spend, always, or in other words, pay yourself first, before you pay bills and other people.

What do you think is more important than the task of budgeting itself? Sticking to the budget plan! No plan is successful until implemented for as long as necessary. So in addition to budgeting, you need to devise an ecosystem that will help you stick to a budget.

Set SMART Goals

When you design a budget, you need to know what you’re saving for. If your goal to create wealth is to never have to worry about money, you can do it! Just start right now.

Setting SMART goals means setting goals that are Specific(S), Measurable(M), Achievable(A), Relevant(R), and Time-Bound(T). Assign specific details to your budget and set financial goals that you can achieve.

For example, while not having to worry about money is a vague goal, having $50000 by the time you turn 30 is a SMART goal. Setting SMART goals helps you evaluate and review your goals as per changing conditions and alter them accordingly. It also helps you define what wealth exactly means to you

Set multiple streams of income

Gone are the days of working hard at one job and waiting for a promotion (or some special appraisal) to get better pay. These days, people believe in setting up as many sources of income as they can to maximize their earnings.

Your streams of income can be either active or passive/automatic/scalable. Active streams are the ones where you have to be present & work for the money. For example, freelancing or running a weekend business are active streams of income. On the other hand, scalable, automatic, or passive streams are the ones that require very little or no work on a time-bound basis. For example, selling an ebook or course online can be considered passive or scalable income, since what you earn is not dependent on your direct time input every day.

In addition to providing additional income, these sources also provide a sense of security in uncertain times. In case the money from one source stops coming in, you can always rely on other sources until you fix or replace the other one.

Invest in yourself

The best investment you can make is investing in yourself. Whether it is a business course, a mentor, a speaking class, or a vocational skill that can help you upgrade your knowledge base, every investment in yourself has the potential to change your life.

Creating wealth all by yourself can be a challenge if you’re just a beginner. Fortunately, there are a lot of options through which you can seek help and manage your finances better. If you’re right out of university, you can seek help through various programs that offer personalized coaching for life after university.

In addition to helping you move up your current pay scale, upgrading your skills will help you in a lot of ways. It will upgrade your network, give you better exposure to challenges, make you gain a better perspective, and also make you a better person overall. So you can build a great future for yourself, right now.

If you’ve made it here, congratulations! You’ve taken the first step towards creating wealth. Your Awareness. Keep the momentum going and keep investing in yourself for a great life.