How To Build Wealth In Your 20’s — What I Learned After Graduating College

Tom Blake
Tom Blake
Nov 27, 2019 · 10 min read
Photo courtesy of Johannes Plenio on

Originally published at on November 27, 2019.

When it comes to articles that tackle wealth building for young adults or students, I think the vibe can be pretty pessimistic.

There are some reasons for this, of course, that aren’t completely unreasonable.

The cost of tuition has gradually increased, and student debt is a consistent concern. This can make it difficult for many young adults to focus on wealth building when entering the working world at a deficit.

However, I also think there are a lot of amazing opportunities happening right now around the world.

If you live in the United States or many other countries with growing economies, the job market isn’t looking too shabby.

And, if you live in a region where the local job market isn’t too inciting, I argue that it has never been easier to make money make money online thanks to technology.

Anyway, since a lot of articles can be a tad doom and gloom, I want to tackle the question of how to build wealth as young adult based on what I’ve seen and experienced throughout my time in college/early adulting days.

Let’s get to it!

*Disclaimer — I am not a certified financial advisor, and all opinions expressed here are my own and not indented to be interpreted as direct financial advice.

But First…Some Stats — Median Net Worth For Young Adults

According to, the averagenet worth for U.S. individuals between the age of 18–34 is just shy of $11,300.

At 35–44, the average net worth increases to more than $61,000.

This is nearly a 6x increase in net worth in just 10 years compared to the prior 16 years of wealth building.

There are obvious explanations for this discrepancy, of course.

Our first jobs are often lower paying than future ones, and our net worth can be significantly hampered by debt or student loan repayments fresh out of school.

However, this graph does show that while it takes time to get out of that initial slump of net worth, your wealth can start to accelerate once you get the ball rolling.

Want the math? Just take a look at this graph from Four Pillar Freedom that breaks down why reaching the first 100K is the hardest (and what happens afterwards):

You’re looking at around 7–8 years on average to save your first 100K (if you put away 10K annually).

In contrast, you can double that amount in under 5 years if you have a decent return in the markets.

I’m going off on this tangent because I think it’s important to recognize that building wealth in your 20’s is a bit of a slug fest.

However, once you gain some momentum, there is truly nothing holding you back.

Wealth Creation In Your 20’s — Playing Defense

When it comes to personal finance, it is impossible to out-earn poor spending habits, crushing debt, or bad decisions. This is why millionaire celebrities or athletes go bankrupt all the time.

If you want to focus on wealth generation as a young adult, the first step is playing a solid game of defense and mitigating as much debt as possible early on.

Learn To Budget

This is a simple idea on paper but much harder to execute in reality, as a study has shown that only 24% of millennials understand basic financial literacy.

Learning how to budget and getting in the habit of recording your expenses is critical to generating wealth, and it’s important to build these habits early.

I spent my undergrad having no clue about how much I was spending on alcohol, going out, or groceries. It took my first full-time job for me to appreciate the value budgeting has on your financial well-being.

If you don’t budget you will have no idea where your money goes.

You might have a general idea, but it is important to actually record your spending so you can stop bad habits before they become permanent.

Aggressively Attack High-Interest Debt

It doesn’t matter if you have student loans or consumer debt, paying off high-interest debt as quickly and efficiently as possible is a great goal to have when you land your first job.

There are a variety of debt strategies and tools that can help young adults form a plan of attack, but the key is to actually have a plan in place.

Prioritizing debt that carries higher interest rates (like credit card debt, certain types of loans) should be of the utmost importance and the interest rates those loans carry can significantly cut into your ability to invest or save.

Live Frugally

While it may be tempting to splurge on big purchases or a fancier lifestyle when coming out of school or landing your first job, avoiding lifestyle creep can be incredibly beneficial to keeping costs down (which accelerates how fast one can pay off debt).

Focus on saving and earning more money, not a nicer apartment, a new car, or expensive assets you don’t need.

The longer you can ‘live like a student,’ the better your wallet will be!

Extra reading — 23 money saving tips for college students.

Building Wealth Out Of School — Playing Offense

Once you’ve graduated school or started working your first full-time job, it’s time to focus on the offensive portion of wealth creation: earning and investing your money!

Work Full-Time Hours As Soon As Possible

I know it can be difficult for new graduates to find full-time work, but that doesn’t mean you can’t get in the habit of working full-time hours.

If you are hired part time, you can fill in the extra hours in so many ways. From gig economy jobs to various online side hustles, there’s an unlimited amount of opportunity out there.

For example, I have a friend who just graduated, and he is splitting his work week between freelance web development, social media management, and delivering food with Uber Eats.

He’s making great money, working 40+ hours a week, and he’s loving life. It would have been much easier to subsist with 25 hours of freelance work, but he wants to make money and he loves the work he is doing.

Moral of the story: don’t be afraid to get creative and really hustle to get your income off the ground.

Aggressively Job Hop

While working your way up through the corporate ladder at your first job can be a reliable and potentially more stable way to gradually increase your income, younger workers can gain immense benefit from aggressively hopping jobs during their early 20's.

Waiting for a position to open up at your current employer can take time, especially if the company you are at is not growing and you have to rely on your seniors to retire, quit, or be promoted in order for higher positions to become available.

In contrast, after you gain a year or two of experience at your first job, there’s a decent chance you could hop to another employer with some valuable skills under your belt and a better overall bargaining position for your starting salary.

Work On Something Big — Get Multiple Irons In The Fire

I love being in my early 20’s. Granted, I don’t have many other life stages to compare my existence to, but hey, there are a lot of advantages.

Here are some key ones:

  • On average (in the United States), people will not have their first kid until around 26–27. So, if this is you, you naturally have more time to focus on yourself and your career/hustles.

Long story short, if there is a time for you to really grind, it’s in your early 20's.

I know so many people who worked incredibly hard during college to get ‘good grades,’ and then immediately became complacent upon securing their first job, settling for an unchanging environment and a lack of challenge.

Don’t do this.

Work incredibly hard at your first job, start some form of side hustle on the side, and always make sure you are constantly learning.

I’ve spent a lot of my time working as a freelance writer and building myblog, but you can take so many different routes. Just find something that excites you and chase it!

Financial Management — How To Invest In Your 20's

Alright, you’ve mitigated as much debt as you possibly can and you are earning an income! That’s 2/3 of the puzzle out of the way, so now let’s take a look at how to put your money to work!

Get The Basics — Cashback Credit Cards & High Interest Savings Account

It is absolutely alright not to have a massive net worth in your 20’s. I’m currently in this position and so are most of my colleagues, and it’s just a normal part of becoming an adult.

However, it doesn’t matter if you are in debt or already beginning to invest your money, there is no excuse for not earning free money whenever you can.

Two of the best ways to maximize your idle cash and spending habits include:

  • Opening a high-interest savings account.

I’m not an expert in credit cards, but you can usually find offers that at least give 1–2% cash back on most purchases. Learning how to use a credit card responsibly is vital for this reason, and this can also begin the process of building good credit.

As for high interest savings accounts, you can stick with one or bounce around every so often to take advantage of signup bonuses and increased rates banks use to attract new clients.

Regardless of the bank you choose, just ensure your money is never completely idle and that you get cashback wherever you can!

For more cash back options and ideas, check out my post on cash back apps!!

Actually Invest

There’s really no cookie-cutter answer to how you should personally start investing since everyone has different starting points, goals, and levels of risk tolerance.

However, if you can start investing in your 20’s, you are doing yourself a massive favor thanks to the powers of compound interest and time.

If you have high-interest debt to tackle, that is generally the first priority. However, if you aren’t focusing on debt and are letting money from your paychecks sit in your bank account, you are missing out on some income potential.

Personally, I’ve always been an advocate for slapping money in a Vanguard ETF and letting a mixture of quality + time work things out.

There are plenty of other options, of course.

You could try out various Robo Advisors, like WealthSimple, Betterment, or Swell to automate your investing.

Alternatively, you can also seek financial advice from a registered financial planner, or take on the route of DIY investing and plop your money in various stocks, bonds, mutual funds, or ETFs.

The point is simple: put your money to work whenever you can afford to do so and actually have a plan of attack.

Take time to read as much as you can about investing, and don’t hesitate to reach out for advice from professionals.

Just please, stay away from ‘spare change’ investment apps since those really don’t do much for wealth creation or actually building a portfolio.

Final Thoughts

I know it might seem weird to read an article about wealth generation in your 20’s from someone who is, well, 23.

But, in my defense, I was hoping this article would be a more refreshing take on the subject seeing as I am mostly surrounded by other 20-something-year-olds all trying to figure out the same shit.

Because here’s the thing: the problem isn’t that extra cup of Starbucks we purchase or whatever other financial scapegoat the media has created to explain why millennials suck with money.

The problem is what I mentioned before: we have a severe lack of basic financial literacy.

School never teaches us how to budget, save, invest, or accumulate wealth, and that is a shame.

However, on the bright side, it has never been easier to fix this problem.

The internet is full of information, and you can make up for a lack of financial education by looking for advice from people who know what they are talking about.

At the end of the day, it’s really our own responsibility to take charge and build a path for success.

I’m quite a fan of various Reddit finance communities, with some of my favorites including:

I recommend starting with these 3 general ones and getting more niche as you explore.

There are also plenty of great finance syndication websites that compile daily personal finance articles and stories.

One I like in particular is Personal Finance Blogs, which curates the best personal finance articles every day for easy reading.

Finally, you can also turn to certified financial planners at your bank of choice if you want professional help.

Whatever path you choose, the point is to start taking action, learn as much as you can, and to set/attack your goals.

I’m still figuring a lot of this out, and again, it might seem strange to read an article like this from someone who is just getting started down the path of building wealth.

However, I just want to reiterate that this is an incredibly exciting time to be alive and there’s a tonne of opportunity out there…if there is one thing you take away from this post, I hope it’s this realization of optimism and that is is possible to grow wealth in your 20's!

Aggressively seek opportunity, chances to earn more money/new side hustles, and live relatively frugally. The rest falls into place with time.

Anyways, that’ all for now! I’ll catch you guys in the next post!

Disclaimer — I am not a certified financial advisor, and all opinions expressed here are my own and not indented to be sold/interpreted as direct financial advice.

About Tom:

Tom is a 23 year old recent college graduate from Canada with a passion for side hustling, passive income, and marketing. His blog, This Online World, covers honest ways to make and save more money by using technology. To learn more about Tom, read his About Page!

Originally published at on November 27, 2019.

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Tom Blake

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Tom Blake

Blogger at I cover how to make money online, writing, & entrepreneurship.

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