“Life is like playing a violin solo in public and learning the instrument as one goes on.” — Samuel Butler
Are you building wealth?
When I was in my teens I always worked hard to make money because I was pretty greedy. I could never imagine saving money. I knew that I had money coming in, but I never knew where it went. I didn’t care too much to be brutally honest. I loved the idea of being able to buy anything that I wanted.
Then I asked myself a question…
What would happen if I started saving money right now?
This really changed everything for me in my teens. I never thought that I would care about saving money. Now here I am today writing about personal finance every single day.
If you’re in your early-to-mid-20s you can become financially free by 30. You can also get pretty wild and never miss a party. The point that I’m trying to get across is that I believe we can all reach financial freedom through saving lots of money without missing a party or being boring about it.
This is my story of attempting to create financially freedom before 30…
I used to think that early retirement and lifestyle design blogs were a scam. I thought they were just cheerleaders. I thought they were just a bunch of hippies that wanted to create excuses for why they didn’t have jobs.
Then I started meeting these people in real life. I attended various conferences, book signings, and events. I soon realized that there are many different options out there in life and that you don’t have to work a job you hate to survive. You don’t have to wait until you’re old and grey to be financially free. You don’t have to wait for anything.
Are you saving up? Do you have a wealth building plan?
I want to show you how to go from broke college graduate to financially free by the time you hit 30. All while never missing a jam.
It’s easy to throw out catchprahses (YOLO) and excuses for not saving money. It takes real balls to actually create a wealth plan and work towards it. Anyone can blow their savings.
Today we’re going to create a wealth building plan for life past our 20s…
What’s the five year plan?
This is your wealth plan for the next five years.This is your plan to take five years and make things happen. This is your wake up call to stop spending every single penny and to finally see the light at the end of the tunnel.
“Where do you see yourself in five years?”
I was asked this recently and I honestly had no clue how to begin. I didn’t know where I would be next week.
Just like with my introduction to saving money, I was clueless. I figured that I had to start thinking about where I wanted to be by 30. So I started thinking about a five year plan.
Why five years?
This is what I asked myself. Then I just assumed that five years is fair because it should bring you fairly close to 30. Five years is also a long enough amount of time to get an insane amount of results.
What exactly is a wealth plan?
What does it consist of?
I had the privilege of speaking with Todd of Financial Mentor over the telephone and he really helped me with the whole idea of a wealth plan. Truthfully, I didn’t have any sort of a wealth plan until we spoke. I had been convinced that a five year plan was a good idea. But I definitely didn’t have a wealth plan. It sounded like a multiple choice question on one of my finance exams back in college.
What should be in your wealth plan? A few key areas is what I gathered from the conversation.
There are the three key components of your wealth plan:
- Wealth creation (career or business).
- Wealth translation (from personal income to personal asset).
- Investment component (how do you grow your assets faster than the rate of inflation?).
You have to methodically work towards all of these components is what Todd told me as I frantically made notes and tried to sound like I knew what was going on.
This conversation really changed things for me because I now realized that I need a wealth building component to my five year plan.
Do you need to buy a property? Should you start a business?
I’ve been very lucky in my life when it comes to timing and things working out. I was lucky to get a decent job at the right time where I was able to save enough money to buy a condo at an early age. I was also lucky enough to somehow stumble into the online world of blogging.
Let’s assume that your story is different.
Do you need to buy a property? Should you start a business?
You don’t need to do anything. We all have different levels of risk tolerance and different plans for the future. You can focus on switching careers, moving up the ranks at your current job, or investing in what you’re comfortable with.
You just need income generating assets.
Wait. What’s that?
What’s an income generating asset?
The name says it all! Any asset that generates an income for you. In other words, anything that makes you money.
I was too dumb to realize that I had been creating income generating assets. I was just at the right place at the right time, trying to get enough money to be able to get wasted the next weekend.
What are the best examples of assets that generate income?
- Your education. I got my undergraduate degree in business. I figure that this should help me out in the future if I ever need to look for a real job. Your education can at times be your main income generating asset.
- A rental property. I bought my first rental property in 2007 in an area that was pretty risky. We all know by now that a rental property is often used as an income generating tool.
- A business. I started Studenomics in late-2008 and it has slowly turned into a business. What business will you start? It can be online, freelancing, or something brick-and-mortar.
- Securities and similar investments. I used to be heavy into stocks before, but have pulled out recently. I wish I could say more here.
I can only speak on those four assets because that’s where my experience is. I don’t want to write about things that I haven’t done or don’t know much about.
What does it mean to be financially free?
I always just wanted to work to have money so that I was never broke and could always afford things. Coming from an immigrant family, I didn’t want to be in the same position forever. I just wanted money.
What’s financial freedom all about with our wealth plan?
- My goal is to have us be debt-free by 30.
- Have lots of money in the bank.
- Be able to afford cool experiences in life.
- To never be miserable. Life is far too short to spend it on anything that doesn’t excite you.
When we don’t have debt, do have tons of savings, and income generating assets, we don’t have to stress about much.
But wait Martin! Money isn’t everything. Shame on you.
And before any of you hippies yell at me, don’t try to convince me for one second that money doesn’t matter. I know first hand of two couples that got divorced over money issues and another that likely will soon.
As you can imagine, I’ve been eager to share these thoughts with my friends. While most of them agreed, a few didn’t.
We were hosting a backyard barbeque for my cousin’s graduation He had just earned his Master’s in Engineering and this was as good as any reason to eat meat and drink beer.
So a couple from the complex came by. They spoke Polish so we got a long instantly. Then they turned into hippies and starting telling us how money isn’t everything. They started telling us how they don’t need money. They started giving unsolicited advice about money and life. I quickly changed the topic because this wasn’t the time nor the place to argue this.
My view on money is simple:
It’s a lot easier to do things and enjoy yourself when you actually have money saved up, debt paid off, and bills paid. Money isn’t everything, but it sure does suck to be broke or constantly in debt.
There you have it. That’s everything you could possibly know about building a wealth plan and being financially free by 30. Please never miss a party. People will wonder how you do it. Tell them that you got a wealth plan, baby!
If you don’t know where to start, you can read about the best financial tools to save a ton of cash.
Do you have a five year plan? Are you working towards financial freedom?