Achieve Your Financial Destiny By Investing in This One Thing
A guide to your early-career investments.
What’s personal finance anyways?
Personal finance gets a bad rap. Maybe because it’s composed of simple ideas people take for granted.
I generally think people associate it with boring accountants and their conception of a dead-end, corporate wasteland of a 9–5 job. One where they hate their boss, and are tied to a cubicle with deafening fluorescent lights shining down on them while they file TPS reports. All. Day. Long.
It’s interesting, though. Because the more I learn about and become involved with managing money, investments, career development —despite being a good number of steps away from where I want to be — the more modern, and sexier the idea of personal finance gets.
It’s life optimization. It’s business functioning in the current world. It’s personal growth.
And it’s mind-numbingly important, because it will have drastic effects on your well-being, (increasingly) throughout your life.
One reason I enjoy it is because setting up your finances enables realistic longer-term goals, and thus, healthier relationships.
It’s wise to think twice about realistic life goals, if you’re committed to a career with a low salary ceiling, for example. If you’ll only ever gross around 45k total in a high cost of living area (like California, DC, NYC, or Boston) — buying a house in that situation simply wouldn’t be feasible without outside help. If you decided to rent, and if you’re not in a good school district — your children would end up in below par schools. But after rent, tacking on your kids’ private school tuition would likely be out of the question.
Knowing this, how could you leverage the most out of your life goals and potential? Something has to change.
And that something is what studying personal finance will reveal to you: it takes some work, but it will tell you what your best next move is, provided the hand you’ve been dealt.
I guess it’s never too late, but it’s ideal to get a firm grasp on this stuff by your mid-twenties. Much past that, and you’re probably already too far gone to help yourself.
The Psychology of Money in Our Society
The issue with acquiring and managing money isn’t really access to money, particularly if you have a computer and safety net (read: a room at your parent’s house).
It’s also not knowing what to do with the money once you get it. Here’s that answer:
It has to do with your own behavior.
What gives you the power in any negotiation? You being totally okay with walking away.
How do people act when they feel they absolutely need something to work? Needy. Which is, quite perversely, one of the most unattractive characteristics anyone could display.
Mother nature is a cruel beast.
If you don’t pay attention to this innate tendency when you’re interviewing for a new position with very little cash in your bank account (i.e. you “need” to get this one job), I guarantee you’ll put off weird vibes that’ll make a workplace not want to have you in it.
Obviously there are ways to get around this (e.g. many a person has acquired their first job out of school, with no working experience), so it’s not a death sentence.
But let’s try to avoid that happening, if we can.
How To Think About Money
If you didn’t grow up around people who managed their money well (and a lot of us didn’t), it can be a challenge to reorient yourself to the correct mindset that will set the foundation for success.
What’s the mindset, in a nutshell?
Money is abundant. And extra money you earn is to be invested, not spent on items that don’t have a useful return.
Here’s a well-regarded book that will start prodding your brain in that direction.
In the meantime:
Think of each decisive action in your life as an investment
This is something that will become easier with practice, but as soon as possible, you need to do get rid of the idea that an “investment” only has to do with betting on economic performance. It also relates to the acquisition of knowledge, for example.
Instead, as you navigate through life, orient yourself to overlook short-term benefits and bet on the potential for long-lasting, future returns — however they may materialize.
What are some examples of important “non-traditional” investments?
- Health, Fitness, and Wellness
Learning how to get stronger and bettering your body’s aesthetics, while also understanding how to improve your cardiovascular health will pay dividends in terms of how you feel on a day-to-day basis (e.g. more drive, stronger confidence, better cognitive functioning). These are examples of personal qualities that will give you access to opportunities that you might not have previously had access to.
By the way, the “how-to” guide on this one is pretty straight forward for men and women, alike: one hour of heavy strength training — where your aim is to progressively get stronger on certain key lifts than you were previously —two to three days a week. You’ll also want to work in the same amount of any activity that gets your heart rate up (e.g. cycling, running, etc) on the days you rest from lifting.
Pairing this with the right diet is the best recipe for long-term health and wellness. Eating 11–15 calories per pound of your goal bodyweight will keep you looking good, and getting those calories from “clean” protein sources and veggies will sustain your internal health.
If you’re interested in diving deeper, here’s a great fitness resource to get you started.
- Career
Moving to a larger and more expensive city to build expertise in your line of work could very likely catapult your career forward, if you’re having trouble getting the experience you need where you’re currently at.
Think: NYC for advertising and finance. DC for non-profit and federal consulting work. SF for software and burgeoning tech.
It’s no secret that major US cities attract the best of the best. Why might that be the case?
Sure, it’s partly because of an unexplained attraction to vapid displays of status and exclusivity. But it’s also because success in these areas pays dividends — socially, professionally, and intellectually.
If you choose to take this route, realize you will have a higher chance of netting a return the more creative, ambitious, and callous to rejection you become.
The issue of writing, and your career
(Persuasive, organized) writing is one of the most in demand skillsets of the 21st century. And, mark my word, it will continue to be the case for the foreseeable future.
Writing builds brands. It’s used every day to communicate internally with your peers and superiors. It creates relationships. It lands you job interviews. It sells things.
Investing your time in writing something…anything…on a consistent basis will continue to offer more and more the better you get at it.
So, what’s the best way to improve your writing?
- Write for yourself, but always loop back around and present your thoughts for the reader. Aim for a sort of succinct clarity when you express complex ideas.
- Pay attention to how a variety of skilled authors showcase their ideas.
- Realize you have a huge leg up if you excelled at higher-level writing courses in high school (e.g. AP English).
- Realize that some individuals are naturally better writers than others, yet anyone can improve toward their personal best.
The realest answer is you improve your writing by writing and editing.
- Travel
I’m of the opinion that the earlier you can get the travel bug out of the way, the better. Yes, you could find a remote company to support you while you roam around southeast Asia, and execute on a very specific and defined task. But those jobs — while I can guarantee they exist (particularly in writing and healthcare spaces) — usually don’t have quite the potential of growing your career.
Also, if you’re receiving inconsistent income freelancing or in between jobs — know that traveling when you’re stressed about your job and/or money isn’t fun. I wouldn’t recommend it.
Now, feel free to ignore my advice if you’re netting 30k a month dropshipping various trinkets on Amazon. You’re part of a peculiar bunch with lives that I have no intention of reproducing for myself. Same thing if you’re a serial entrepreneur: that’s impressive, cool, and all the rest. But just not for me.
For the rest of us, this could mean that — gasp — you buy a car so you can do things like travel within your country, particularly if you live in the US.
In the time it took me to write that sentence, I’ve already received no less than 10 death threats from personal finance bloggers and public transportation enthusiasts everywhere.
Just kidding.
Not kidding about the car thing, though. Because like it or not, the US is a car-centric country. Sure, you could just fly or pay an obnoxious amount on Amtrak tickets to visit expensive cities. There are good times to be had taking that route, for sure.
But the coasts, mountains, and deserts are particularly beautiful, too. Looking at you, California, Utah, and Colorado. If you live in the US, you’re missing out by not having a reliable car — I’d suggest a sporty, powerful one for safe mountain driving.
Because you definitely don’t want to mess around driving on snowy mountain passes without a reliable car and proper (read: snow) tires. If you do, you’ll quickly realize that mother nature couldn’t give less of a hoot about you.
I have more thoughts :) Mostly about not doing a west coast tour in the winter. But off the soapbox for now.
Point being: certain life-changing experiences (e.g. travel, education, relationships) will only become available after you attain some financial comfort and/or career leverage, in large part because they take you out of the working world.
Which is okay for a little while, but not for months at a time.
Some additional investment ideas:
- Sending thoughtful thank you notes and gifts to those who have helped you navigate crucial periods in your life.
- Choosing riskier opportunities that offer better career growth, over ones that let you have a cushier lifestyle or more money for the short term.
- Reading books on things you’re interested in (e.g. I like many things psychology/brain/mind related, and I‘m super excited for this book to be released).
- Seeking out non-fiction subjects that are important to most (e.g. investing, relationships, fitness, business, personal development). If you can’t remember what your favorite book in recent memory was, seek it out!
- Targeted skill development (e.g. Coursera MOOCs)
Hopefully this post got you thinking about how to understand and approach, hands down, the most important asset of your portfolio: Your Potential.
He’ll explain why it’s so important to beef up that skillset, use your existing leverage, and set your life up in such a way that maxes out your potential for the long-haul.
Stay tuned (follow us on Twitter and LinkedIn) for more.
Read about the simple next steps needed to set up your financial foundation here.
