- When you sell a house, if you've lived in it 2 of past 5 years, those gains are basically tax free in US. Had to place this high because we have made big bucks this way. See below on buying houses. BTW I freaking love houses as assets.
- Don't take on any debt. If you don't have enough $ on hand, do not buy it. Save up, and when you buy what you really want, it will mean all the more.
- Pay off student loans and any other (aside from mortgage on house) as soon as you can. Attempt to get family members to help you pay this "hangsman's noose" off - it's choking for young people!
- - SPEND LESS THAN YOU MAKE (golden rule)
- Cook at home. Eat snacks at work. Avoid restaurants (yes this includes Starbucks), Enjoy avocados and other healthy foods, at home. Eat lavishly at home - enjoy life. I recently spent $500 on a fancy doctor to get this advice: eat whole foods you prepare at home. See, you've already saved $500, and made it more likely you'll live to be a rich old fart, should you do this :)
- If you do eat at a restaurant, take home leftovers and eat them dammit
- Try to get rid of your car, If you don't live by public transportation, you may have to temporarily drive a very unimpressive car. No worries, the best people you will know will like you for you, not your stuff.
- Buy energy-efficient minimally-polluting stuff. Even if a bit more expensive. So far, we just have this one earth.
- If work offers 401K max it. Nevah walk away from matching funds too. After tax it's pretty good.
- No pets - too expensive when you're young. If you need a fix, help a friend out by petsitting :)
- Any roommate must pay rent. Exception being a roommate who cooks and stuff, maybe in school. Just avoid people who take advantage of you :( Later in life, when you can afford it, help such people out.
- Don't f-up a windfall (co goes public or inheritance, etc) - bank most of it and party / splurge with 5- 10% maximum.
- At your age, equities are the play. Find a fund with research and don't necessarily trust financial advisors. Always diversify and don't put all of your eggs in one basket. Buy equities and other investments over time, not all at once. Things change, and plunking down a lot of dough at one time has always failed for me.
- Negotiate for more when taking a job. Don't be afraid to ask for a raise.
- No expensive hobbies - the idea is to have money and time for that when you're old and rich.
- Don't buy watercraft. Find friends who have boats and buy the beer. They are holes in the water the owner pours money in.
- Children are expensive. Maybe just have one - people say you should wait, but it's OK to have one or even two when you're young. Kids will make you tougher (and softer).
- Furniture is not an asset. It's an expense. Same with jewelry. Don't get me started on expensive knick-naks. Ugh.
- Buy clothes at a Goodwill or summat in a great neighborhood. That stuff rocks. If you are leery of used clothing, just go to conferences and collect that swag - which tends to include clothing :)
- Anything called a "loan" you make must be considered a donation. Loaning money to friends is a super bad idea :(
- Home buying tips:
- Location. Buy where people will want to live when you sell. Buy worst house with good bones in great neighborhood. Way to figure out bones on house is looking at attic and basement. That's the part fancy realtors won't get seller to fix. Look for watermarks in garage.
- If you're up to fixing up, do it.Weigh data on the investment on home improvement vs. return. A great neighborhood weighs in.
- Consider privacy - land is king
- Watch those HOAs and arrangement where you can be arbitrarily "assessed" for big money.
- Look for property that comes with land you can subdivide and sell later (never have done that, but way population is increasing, might be a good idea).
- If you get a bad vibe on neighborhood - listen to it
- Even if a house is worth $500K one day, no guarantee it will be that way a year from now. If you're way up, do like in Vegas and pull your chips off the table. Real estate bubbles suck.
- First home likely not the one you stay in for life. I've owned 14 houses so far. Then again, I *like* houses! Property is an asset, not an expense.
- If you've made a bad investment suck it up and move on. I've stuck with bad investments before - it doesn't work. Chalk it up to experience. Hesitate to make investments "friends" prod you to do. Take care.
- Don't smoke cigarettes, drink or do drugs. If you must, these expenses are in the "Exception - Cheating Allowance" category. Feel guilt for this and do what you must to make it up to the older you who wants to be wealthy.
- Think about being self-employed (contractor) Self employed upside - write off all the stuff you shouldn't be doing (see aforementioned). Downside - complicated and no bennies. Upside is you are young and unlikely to have huge healthcare expenses. Get a good tax guy if you do self-employed option.
- Don't be a douche - if you go to dinner or drinks, pay your fair share and a little plus. These are friends. Getting to wealth over money entails loyalty and being a good person. If it's a work event - don't pass it up if the exec to pays because they can likely expense.
- New cars: don't do it. You will pay a premium. I did that once, never got satisfaction. Now I buy 2 -3 YO cars from CarMax. Cars are an expense, not an asset. Kind of people think well of you for having a new car, well - suboptimal because they might not be very smart :(
- If you do have debt, consider this https://en.wikipedia.org/wiki/Debt-snowball_method - Kk but try to avoid this debt situation :)
Money does not relate directly to the fun you will have. Remember that. Stupid purchases will ultimately make you feel stupid. Some of these ideas seem no-funl at this time. But think of the older you, and how bad it would suck to be old AND poor someday. Having said that, travel, enjoy life, but think about that older person you will be, and be smart about your finances.
