Advice for a 20 year old <Thread>

Was swapping DMs with a younger guy today, who asked what advice I would have for 20year olds about creating wealth

It's a good question, and here's a thorough answer:

1. The first thing to discuss is how to create wealth. The first step is to get into positive cash flow territory. That means having a good first income stream (i.e. a job or a business) and limited outgoings.

For most, keep expenses down with a college student lifestyle

2. Getting cash flow positive means having a job, or more than one

First step, try to get a high-paying job. If you can make mid 6 or more from your day job, that makes wealth creation much easier (lawyer, banker, doctor, etc).

Of course, do the math on any debt.

3. This could also mean just getting a basic job in your field. If this doesn't have a track to 6 figures income, that's OK, it's something. Get a job.

Your first step is to get to positive cash flow every month. If you don't have enough from the 9-5, then you need more income

4. The reasons are varied
- You need a cushion for emergencies
- You want to have some money to spend on educating yourself or on business startup
- You want to get in the habit of stacking a bit of cash every month

5. The next step is to improve your income. A couple of ways to go:
- Up skill at the day job, to get raises/bonuses/equity
- Take your day job skills and freelance
- Build a separate side business that doesn't require an upfront investment

6. The key is to have cash flows that are
- growing
- keep you cash flow positive
- can support you if the 9-5 falls off
- you dont risk too much to get started

think freelancing, web design, Affiliate marketing etc

7. Then you try to scale up the side business to a substantial income stream. For most at 20-22 years old, $1000/month would be a reasonable goal to shoot for, and then try to outperform that over time.

You want to keep all of the revenues and start investing them

8. Invest smartly, in cash-flow producing assets. Real estate, stocks, businesses-- whatever.

Start small so that you don't hurt yourself, but focus on cash flow generation. At this stage, you don't want stupid speculative risks, you want a strategy that produces cash

9. If you can get a generous income stream from your day job
e.g. you get several raises or nice commissions payments, then you should still be building side incomes, but focus more on the investing part

Invest in cash flow as it's little time to create a replacement income

10. Last, your 9-5 is not something to forget. Try to get raises/bonuses and equity. If you can squeeze a big raise out of your 9-5, this accelerates your financial independence journey.

Everyone wants to be full-time tweeter, but the 9-5 can accelerate your financial journey

11. Also, all of this should require very little cash outlay.

For skills, you can learn from YouTube, blog posts, and a couple Gumroad courses. $20 or so will get you started with a skill that you can trade time for good money