How to Build Wealth in Your 20s and 30s
When I completed Youth Service about 10 years ago, I was ready to swing into action and start building my lifelong dream immediately. I had dreamt that as a first-class graduate, I would work hard at earning six figures, buy my dream car, and get married to the love of my life within a couple of years.
Fortunately, my dream came true – at least a part of it. I got a good-paying job in a multinational firm. In the first year, I moved into a bigger apartment in a more expensive part of town. Naturally, my lifestyle moved with this change. I needed a more tasteful wardrobe, so I upgraded it. My clique needed an upgrade, so I attended every high society ‘owambe’ to get acquainted with the affluent and important people in town.
However, all these did not come without a high cost. With little or no knowledge of how to manage or grow my income, it suddenly dawned on me that I was overspending and before I could stop myself, I was knee-deep and almost drowning in multiple debts.
Where and how did I get this all wrong? It was time for some deep reflection and when I did, here’s what I found out.
1. Early Financial Literacy is Key:
According to a publication by BusinessDay, 53.4% of Nigeria’s adult population does not know, or only has a rough idea of, what they have spent in the past week. Additionally, over 50% do not know how much money is available for their daily expenses.
Looking back, I realize now that I could have avoided many money mistakes if I had known what I know today, but financial literacy is just something that I wasn’t taught at an early age either at home or in school.
Many people fail to understand the importance of early financial literacy and are unaware of how to grow generational wealth through early financial management and investing. Very early on in life, people need to understand how money works beyond the basics of receiving it and spending it; and know the relationships between money, wealth, time, and skill. Interestingly, anyone can obtain financial literacy with the right resources and attention to detail.
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2. Always Put the Future in the Mix:
It is funny how I totally ignored the future throughout the period when I was focused on looking rich instead of growing wealth. One of the proven ways to secure the future is to invest. Back then, I used to think that investing is for the rich and I was waiting to get ‘rich’ to start investing. I was wrong. You need to invest to get rich, and you can start with little money and grow from there.
3. Take Financial Planning Seriously:
Earning an income and spending without proper planning is like starting a business without a business plan. If you want to be on your way to reaching your financial goals, you need to be your own CEO. Have an annual financial plan and be consistent each month at budgeting, saving, investing, and earning more money.
Every three months, conduct a quarterly financial review to see what’s working and what’s not. Update your goals to account for life changes; Check your budgeting system; Check your progress towards savings goals; Check to see that your investment goals are on track.
At Parthian Securities, we encourage everyone to take ownership of their financial life by asking questions and getting information that matters.
Our research and insights bring you information that fosters smart decision-making because we believe that the best outcomes in life come from being fully informed.
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