Setting Up Young Adults for Success

First and foremost, I think it is extremely valuable for any young adults to understand opportunity cost at an early age. Adopting an opportunity cost mindset can help you make better decisions with regards to your finances, education, self-fulfillment, and general quality of life. It’s really important to understand that how you spend your time and money today can have compounding impacts on your future for years to come. If you invest a small percentage of your income into a 401k or Roth IRA (you should definitely be doing this if you have an employer match) today the effects of compounding growth will set you up for years to come and really put that much ahead of your peers. This process is highly touted by Warren Buffet. Whatever your dream is, go for it, but do not forget to evaluate the opportunity cost of doing so. The same goes for investments and employment opportunities. Do you feel comfortable working for a startup with tremendous growth potential, knowing that your income could substantially increase in the future due to opportunities in growth or do you prefer or more seasoned and safer route?

“Always weigh the risk and reward”. Along, the same vein it’s extremely important to evaluate the risk and reward of any given financial decisions and business opportunities. If you have a great startup plan and are living with little to no expenses, take the risk! Life has a funny way of working itself out. Always follow your passion, as this will help with fulfillment and if you are passionate about what you do, money will always follow.

“Set goals while still enjoying life”. You can’t have unrealistic expectations as a young adult, you should enjoy life, invest, save, plan and set goals—all within moderation. Everyone wants to enjoy life and achieve goals but keep in mind: “everything in moderation”.

“Take risks”. As a young adult you don’t want to have live too conservatively or too irresponsibly. You are young, take risk and if things don’t work out, use it as a learning experience. There will be other opportunities.

“Live within your means”. As a young adult it’s a great idea to adopt the habit of budgeting. Gamify the process if you have to! Compete against yourself each month and try to find new sources of revenues and new ways to cut unnecessary costs. Never spend more than you make and never make charges to a credit card for unnecessary purchases or vacations.

A wise man once said: “You get an education to land a 9 to 5 but you get a financial education to quit your 9 to 5”. This is the mentality you need to adopt as a young adult, so that you can live the rest of your life without the burdens of financial stress.