You’re 25, ready to conquer the world, have a killer job… but what do you know?
In today’s society, information comes easy. In fact, young investors have the global financial news at their finger tips – or on a virtual realty (VR) headset. At any second, the best stock tips will show up somewhere. Or the newest crypto project is on every convo at weekend cocktail gatherings.
But, do you even know what a crypto project does? Is it run by humans or bots? Or does a Decentralized Autonomous Organization (DAO) run it? What?
Let’s not get sidetracked. Better yet, let’s not (ever) think you know the ropes at 25. Right now, you are full of energy, yet lack life experience. You think you know it all, yet disaster lurks at every corner.
So for all you young investors ready to listen – you can right here – and to heed advice from those who’ve lost millions before you, keep reading…
Young Investors – Take Notes
If I was one of today’s young investors at 25 and just starting out my investment career, here are four things that I would tell myself to do starting right now.
Number one: take WAY bigger risks than you ever thought imaginable. Here’s why: If you miss, you’re still going to get doubles and singles along the way. And, you might get a home run. Ultimately, if something doesn’t work out, you’re young enough to start all over again.
At this point in young investors careers, time is on your side. You can afford to lose money – although never fun. But the experience will stay with you forever – good or bad. And that’s what you lack now. So one of the best ways to get that experience is to say YES, to opportunities that come your way.
Number two: with all the income and extra income you earn, buy real estate. When you get a raise, put money aside and buy a house. When you get a big bonus, put money aside and buy a duplex or a triplex and start building your portfolio now.
Why real estate? Well, young investors don’t understand how compound interest works. They’ve yet to experience the affects of having tenants pay for their property. Think about this: You get qualified for a $500k tri-plex. Your three tenants now pay your 30-yr mortgage. About 22 years later (at 47) you have almost paid your mortgage off. Actually, your tenants did. All you did was make the down payment and 22 years later you own the entire asset. Re-read this again to let that sink in.
Number three: work your ass off. You’ll only get rewarded in life by working your ass off and separating yourself from others. When you do that, make every decision you make in investing one for 30 to 40 years down the road because life expectancy today is getting older all the time.
As young investors, working 50 or 60 hours a week should be normal operating procedure. Again, say YES to all opportunities that come your way. Then get busy. Challenge yourself weeks at a time. Three to six months later, if things aren’t going as planned… reassess.
More to the point, by working your butt off, others will take notice. Business owners will see your tenacity and choose you over all others. But if you blend in the crowd of “victims”, you won’t be that break you’ve been seeking. Work hard – real hard.
Last, number four: when you buy real estate, never sell it, period. As young investors, you have time on your side AND compound interest waiting for you to take advantage of it. You will be lured into flipping property to make quick buck. Heck, it’s a great feeling to make $100k in 6-12 months.
But that’s just the tip of you can make over time.
At 25 when I was working with young investors, I saw my peers making bucks then spending them on toys. They’d take their asset (cash) and turn it into liabilities (debt). I couldn’t believe what I saw. While they did that, I was buying rental properties. One, two… 6 apartment buildings in less than 4 years.
Cash was flowing in. Not just from rents, but from my laundry machines. Each year rents and clothes washing prices would go up. While that extra revenue came in, my mortgage and expenses would go down.
It’s the easiest math every. It should be taught in every class from 6th to 12th grade.
Buy rental income property using some cash down plus the rents the building generates. Then let others pay your mortgage. You make millions one day but only put in a small down payment – that’s all.
The Young Investors Dilemma
Your peers will try to steer you into spending your money on things that will never grow your wealth. THEY buy cars. THEY spend good money on bad stuff. They think they can time the markets for the best times to buy or sell. Avoid them and these things at all cost.
Looking back, young investors can separate from their peers by using these four pieces of advice to a “t.” And, it’s not hard. Just a little bit of focus is all it takes.
You’ll turn 54 one day soon. At that point you’ll look back at the last 29 years and smile. And, you’ll see acquaintances who made poor choices struggling.
It’s your choice. But as a young investors, these four choices are the easy ones to make. Now.
The ULTIMATE Investment Advice for young investors. You won’t hear these words in mainstream. You may not hear them anywhere. But looking back on 35 years of investing… these four ideas are the ultimate investing ideas for young investors today.
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