How To Build Wealth In Your 20s (Starting At 18)

TL;DR

Follow a comprehensive plan from age 18 to age 30 to set yourself up for financial success, including steps such as maintaining good relationships, establishing credit, saving, and investing in real estate.

Transcript

• What is going on, you guys welcome back to the channel. So in this video today, we're gonna be talking about a step-by-step plan for, going from scratch or like $0 as a complete beginner. Somebody just getting started with their finances to a financial plan for building up a net worth of around $350,000 by age 30. And just for a bit of background... Read More

Key Insights

• 🤕 Establishing credit at a young age and maintaining a good relationship with family can have long-term financial benefits.
• 😫 Saving 50% of your income and living frugally in your early twenties can set you up for accelerated wealth accumulation.
• 🥶 House hacking can provide a way to live for free or at a reduced cost while building equity and generating additional income.
• 🤑 Refinancing and eliminating PMI can lower your mortgage payment and save you money in the long run.

Questions & Answers

Q: How can I establish credit at a young age?

Start by opening a secured credit card and making on-time payments. Consider getting a store credit card and a student credit card once you have established credit with responsible usage.

Q: What are the benefits of a house hack?

House hacking allows you to live for free or at a reduced cost by renting out other units on the property. It can help build equity and generate additional income.

Q: Can I still save money if I live in an expensive area with high rent?

It may be more challenging in expensive areas, but you can still save by finding creative ways to reduce expenses, such as finding a roommate, living in a smaller space, or exploring lower-cost housing options.

Q: Should I invest in stocks or real estate?

Both stocks and real estate can be good investments, but real estate offers the added benefit of potential cash flow and leverage through rental income. Consider diversifying your investment portfolio by including both.

Summary & Key Takeaways

• At age 16, maintain a good relationship with your family and ask about any financial assistance they may provide for your first car or college education.

• At age 18, open a secured credit card, establish credit early, and explore high ROI programs at community college.

• From age 21 to 24, save 50% of your income, live frugally, and save for a down payment on a house hack.

• At age 24, purchase a multi-unit property with an FHA loan, live rent-free, and save money from not paying rent.

• From age 25 to 27, fix up the property and save additional money from having a cash flow positive property after refinancing.

• At age 27, refinance the property, eliminate PMI, and save even more money.

• From age 27 to 30, save for a down payment on another rental property and repeat the process.