One of the most frequently asked questions I get from readers of InvestingArchitect.com is some variation of: Knowing what you know today, what advice would you give your 18-25 year old self?
I’ve thought about this question a LOT. The critical concept I didn’t know at that age that I know today is that Money is not the only resource/currency that matters. In fact, 18-25 year olds have a MAJOR advantage when it comes to TWO other resources that can help overcome the lack of investment capital: Flexibility and Time.
So, the advice I’m giving my sons when they are that age is:
- Build and take care or your credit score. Don’t dig a hole that will take you years to fill up again
- Buy a home with low/no down payment as a primary residence. Live in one of the secondary rooms or the couch and rent out the others to roommates (it’s okay to be a little uncomfortable)
- After a year or so, turn that house into a full rental property and purchase another property as primary residence.
- Leverage your flexibility and rinse and repeat that process 3-5 times in the next 3-5 years.
- With time on your side, you’ll be AMAZED at what this strategy will do for your financial future. You will easily be in the 90th+ percentile of your peers, with lots more options to live the kind of life you want, not the one you have to.
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