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

Aug 28 2014 - 1:30pm

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 [1] recently gave some nonmainstream money advice for 20-somethings [2] 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:

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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