It’s fun to talk about weird ways to save money and how to go out on a budget. However, at some point in your 20s, you have to move on to the next stage. You have to start building wealth so that you can actually enjoy your life without always nickel-and-diming.
I used to look for clever ways to save money. Now I’m barely interested in saving money to be brutally honest. I want to enjoy myself. I want to find ways to make my life easier. I believe that life should get better as you get older. I believe that you should try to build wealth in your 20s so that you can have even more fun in your 30s.
How can you build real wealth in your 20s? What’s the Studenomics rule for building wealth?
You have to find a way to make money in your sleep so that you’re always making money.
I know that this is easier said than done. I’m going to show you exactly how you can do this. I want you to get to the point where you don’t have to work for every single penny that you earn because we should all make money while out partying.
How can you make money in your sleep?
Before we get going, let’s take a step back. In case you need some convincing, here are a few quick reasons for why one source of income isn’t good enough:
- You could easily lose your job.
- You may not even like your job.
- You need to save more money.
- More money equals more options.
- You can reach your goals faster.
- You can do more (travel, buy cool things, quit job, etc.).
Okay, you’re likely convinced that you need to increase your income now.
What’s next? How do you make money in your sleep?
Invest in income generating assets.
What’s this? I’m not even going to pretend that I’m smart enough to explain this.
This article at Business Insider talks about assets:
“Assets put money into your wallet, preferably each month. They will feed you even if you are not working. Examples of assets include income-generating real estate, dividend-paying stocks and interest-paying bonds.”
You need something that makes you money when you’re catching up on Netflix. You can’t only rely on your day job to help you pay your bills and get ahead. You have to find ways to make money while you sleep. This is where dividend paying stocks and real estate will help you out.
What does this look like for me?
I have nothing to hide. I want to share my process with you. I’m an open book.
- Real estate. I’m currently getting more involved in this. I was able to accumulate a decent savings account by selling my first rental property. I bought it straight from the developer and then rented it out (after throwing some epic parties for the first year). Then I sold it when an investor made me a great offer. Now I’m getting more involved with AirBnB (more coming on this soon).
- Blogging. Blogging isn’t passive income by any means. However, a blog can generate you money while you sleep if you have enough of the right articles and optimize your key pages. For example, things like affiliate commissions and book sales can come in when I’m sleeping.
- Retirement accounts. I have my retirement accounts setup and invested in the stock market. Truth to be told, I have someone else manage my money for me so that they could be more objective. I also don’t have the patience to deal with the market.
In the past, I was into day trading for a little bit. I wasn’t any good at it (is anyone good at it?).
Martin, how do I even get to this stage?
There are different stages of money in your 20s.
What are these stages?
- Trying to survive. I need beer money. You just want to survive through another week. You want to eat a few decent meals and pay your rent.
- Not making enough money. You’re making money, but it’s just not enough. You’re not the CEO yet.
- Finally making money. Now you’re happy with your income. You just don’t know what to do next with your life. You can’t decide between upgrading your skills, where to buy a home, and if you should go out on just Friday night or the entire weekend.
- Trying to figure out what’s next. You don’t know how to get to the next stage. You’re not poor. You’re also not rich.
In between stages three and four, you have to find a way to make money in your sleep.
You can’t always be working. There are only so many hours that you can put in during any given week. When you settle in to your first job and are making real money for the first time in your life, it’s time to take control of your life.
What are the next steps now?
Start focusing on building your wealth. Set some goals for the next few years. Do you want to buy a rental property? Do you want to invest into a business?
You should always put a couple of bucks aside to party on the weekends. I just want to see you have some money in your bank account.
What are the tools to start building wealth?
- Read up on how to start an online business with just a few bucks per month investment total.
- Next Round’s On Me. This is my book that helps you figure out how to hit financial freedom in your 20s without missing out on the fun.
- Grab my freelancing book for free. No strings attached. See how you can start freelancing for extra cash. You can then invest this money.
- See how you can start investing your money and use Betterment as a tool to get you there.
- Read up on how I bought my first condo. I’ve been able to make money through renting out a condo, selling a condo, and using AirBnB. You just need to get your hands on that first property.
- Follow The Cancun Technique and The Houdini System to finally put some money away.
You absolutely have to make money in your sleep. There’s only so many hours that you can work in a day.