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New Personal Finance Advice For 20-Somethings

Money Tips For 20-Somethings You Haven't Heard Of

Sure, we know the typical "save more, spend less" personal finance advice that experts tell us all the time, but bestselling author and entrepreneurJames Altucher recently gave some nonmainstream money advice for 20-somethings on Quora. He talked about how we shouldn't focus on saving money but instead on making more. Read on for a refreshing take on personal finance:

A) Don't save money. Make more. If you think this is not so easy then when you walk in a certain direction then eventually you will get there.

B) That said, don't spend money on the biggest expenses in life. House and college. Just saving on these two things alone is worth over a million dollars in your bank account.

C) But doesn't renting flush money down the toilet? No, it doesn't. Do the math. You can argue all you want but the math is very clear as long as you are not lying to yourself.

D) Haven't studies shown that college graduates make more money 20 years later? No, studies have not shown that. They show correlation but not causation and they don't take into account multi-collinearity (it could be that the children of middle class families have higher paying jobs later and, oh by the way, these children also go to college).

E) Don't invest in anything that you can't directly control every aspect of. In other words . . . yourself. You can't make or save money from a salary. And salaries have been going down versus inflation for 40 years. So don't count on a salary. You're 20, please take this advice alone if you take any advice at all.

F) If you want to make money you have to learn the following skills. None of these skills are taught in college. I'm not saying college is awful. I'm just saying that the only skills needed to make money will never be learned in college:

  • How to sell (both in a presentation and via copywriting)
  • How to negotiate (which means win-win, not war)
  • Creativity (take out a pad, write down a list of ideas, every day)
  • Leadership (give more to others than you expect back for yourself)
  • Networking (a corollary of leadership)
  • How to live by themes instead of goals (goals will fail you)
  • Reinvention (which will happen repeatedly throughout a life)
  • Idea sex (get good at coming up with ideas. Then combine them. Master the intersection)
  • The 1% rule (every week try to get better 1% physically, emotionally, mentally)
  • "The google rule" — give constantly to the people in your network. The value of your network increase linearly if you get to know more people but EXPONENTIALLY if you the people you know, get to know and help each other.
  • How to fail so that a failure turns into a beginning
  • Simple tools to increase productivity
  • How to master a field. You can't learn this in school with each "field" being regimented into equal 50 minute periods. Mastery begins when formal education ends. Find the topic that sets your heart on fire. Then combust.
  • Stopping the noise: news, advice books, fees upon fees in almost every area of life. Create your own noise instead of falling in life with the others.

If you do all this you will gradually make more and more money and help more and more people. At least, I've seen it happen for me and for others.

Altucher's advice totally goes against the grain, but I think it makes a lot of sense. Oftentimes we learn the skills of negotiation way too late, when it would've been helpful to have known them at the start of our career. Schools definitely teach us a lot, but there are a bunch of "real-life" skills that are missing from the curriculum.

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