Don’t just focus on stock picks when you’re thinking of building retirement wealth I have had thousands of conversations over the years with young families who have dreams of living debt-free and achieving major financial goals, like owning a home or sending their children to college. In the 30 years since I’ve started, I’ve seen how things turned out for hundreds of those couples. Some are now retired and financially independent.
Others are still working at jobs they’d quit if they could. When I got started in the financial-services industry in my mid-20s, very few people I worked with had any money. For years, I sat at kitchen tables with couples in their 20s and early 30s who had a car payment, credit-card debt and kids they wanted to send to college one day.
They also had no real sense of whether they could pay for it all. We had pretty basic conversations about how to get rid of debt, whether to open a 529 plan for the baby, and if they could afford to bump their 401(k) contributions from 3% up to 6%. The decisions these couples made in their 20s had a lasting impression on their financial circumstances three decades later.
Income mattered some, but it wasn’t what determined the outcome. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it. I would like to receive updates and special offers from Dow Jones and affiliates.
I can unsubscribe at any time. Young adults are often told to start early, no matter how much money they have, because by the time you have enough money to feel qualified to invest, the decisions that mattered most happened 20 years before. Here’s what I’d go back and tell myself at 25, and what I wish those in their 20s knew now, to be on the right path for a lofty retirement.
You’ll notice they’re less about the actual investments, and more about the life you’re building. **Choose where you live carefully.**Keep your housing costs extremely low. Live with a parent, rent a small apartment with a roommate or two, or even better, buy a duplex and rent out the other side to help pay the mortgage. Those are all good ways to keep housing cheap in your 20s.
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