If You Have Savings In Your 20′s, You’re Doing Something Wrong.

[MJ DeMarco]

How much did you save in your twenties, MJ?

A few hundred thousand.

In my mid-20's, it wasn't about saving, but debt reduction. I felt I couldn't save until I paid off all my debts so my excess cash went into A) My business or B) My debts; credit cards, student loans, etc. Once the debts were gone, my savings rate grew.

For the bystanders here, I recommend this:

You have excess cash?
A) Reinvest it in your business if it is growing and shows promise. Don't throw good money at bad businesses.
B) Attack debt until you have none other than living expenses.
C) Save the rest.
D) Reward goals met, such as savings level, business objectives, new clients, etc. Reward with travel, toys, whatever.

 

[AgainstAllOdds]

People are more likely to share an article if it outrages them than if it's something they agree with.

We all know the author's "opinion" is wrong, and want to talk about it.

However, we should consider studying the article's composition and virality instead. This girl, whether or not she believes what she wrote, just got 49,000 shares. Assuming 100 pageviews per share, and an $8 CPM, here's the math:

49,000 x 100 = 4,900,000 pageviews.
4,900,000 / 1,000 = 4,900 [for calculating CPM]
4,900 x $8 = $39,200 in ad revenue.

She pissed us off. We got angry. We went out of our way to show our friends how dumb she is.

In the meantime: she and Elite Daily made off like bandits.

 

[biophase]

Basically you should be 30 and broke, but have experienced a lifetime in your 20's. Of course, then you pay for all of it in your 30's. No house, no money to raise kids, etc...

She did have something right when she said, "This goes back to a piece of advice a very successful friend gave me: “Don’t save money. Make more money,” he nonchalantly stated, pushing me into a taxi."

Unfortunately, her friend was very successful and she was not. Of course, she did not expand on that statement at all.

I do tell people that all the time. Don't save, make more.
In your 20's, don't save $5,000, use it to make $10,000.

Don't blow it on a jetski or a motorcycle.

So I would agree with her.

Don't save it, but use it to make money.

 

[biophase]

You guys will like this video....

Lil Dicky‘s song “$ave Dat Money’ is all about, well, saving money! That’s why the rapper wanted to create “the most epic rap video ever without spending ANY money,” as he explains in the video. He went around asking owners of mansions, yachts and clubs if he could use their spaces for free to shoot the video and he really pulled it off!
- http://hollywoodlife.com/2015/09/18/lil-dicky-save-dat-money-music-video-watch/

 

[DeletedUser394]

Whether you make $30k or $300k or $3M per year, you should be putting aside money. Cash is, and has always been, king.

I'm not talking about taking it and investing it in some mutual fund, I'm talking about having adequate reserves of cash (or near equivalents) to not have to deal with other people's shit.

The author sounds like a typical irresponsible young adult that spends 150% of what they make (yay credit card debt, because YOLO AMIRIGHT??!!??!!). I hope she enjoys writing articles, because she's going to have to for a long time.

I never liked Elite Daily.

 

[Jakawan]

I used to read finance books and get rich books and some Dave Ramsey, and they talked about compound interest and the magical "If you save just $2 per day for 30 years! Blah blah!"
I grew up very poor. Counting nickels and pennies to buy Great Value bread kind of poor.
So when I finally got to where I could make money, I became OBSESSED with saving.. I developed a scarcity mindset.

I got used to denying myself the things I wanted. I denied myself from getting the meal I wanted, I'd eat what's on special. I wore my clothes until they had holes. I wore several shoes down to the rubber where I could literally stick a finger through. I didn't buy my first Nike's until I was 25.
I wouldn't drink anything but free water at restaurants. I wouldn't waste food if you told me to. I saved and saved and saved... and barely reached $9000 by denying myself all those Frappe's and espressos and steaks and vacations I could have went on and trips and shoes and computers, and games, etc.

I focused so much on SAVING, that I was never able to focus on INCREASING my income. I made $12k-$25k per year for all those years.
I was too afraid to invest and grow. Spending even $100 on marketing or books or courses scared the DEATH out of me.

I've spent the past year trying to get over this scarcity mindset. And by doing so, I've invested up to $1500 in a single month on marketing. And just recently gave $900 to my church, spent $5000 on mentoring, and bought a used 2008 Dodge Ram for $3500. Spent just over $10,000 in a month.
From this growth, I've been able to buy books, drive a nicer vehicle, I got my Nike's, I drink high quality teas, beers, espressos, I have a lakeside meal every once in awhile, I try not to deny myself anything within reason. I'm still thrifty and negotiate where possible as I enjoy the hustle.
And on top of that, my income has tripled and I've had several five figure months now.

So the summary of this wall of text is...

Enjoy yourself within reason.. don't be like me and deny yourself to the point where you sit and ask yourself, "What is the point of life? What is the point of making money if I don't spend it, I don't go anywhere, and I DO nothing?"

Celebrate your successes. And above all else... INVEST in yourself... whatever you need to do, whatever you need to buy, to help yourself get to the next level... do it. To get your accountability, your knowledge/training/education, and marketing to get the word out there about how you can help people and exchange value. And as previously stated... focus on your income, not pinching pennies. The amount of money I save by price shopping a hotel, a plane ticket, and what I'm going to wear on the trip next week, or whatever... I could have been on the phone closing a $5k+ deal.

 

[MJ DeMarco]

http://elitedaily.com/life/savings-20s-something-wrong/1214445/

What do you guys think?

The author is getting beat up pretty bad around the web (tons of rebuttals, Time, Reddit, etc.) and I understand her point to prioritize experiences. But no saving? Very Sidewalkish however what's interesting is the Slowlaner response.

Slowlaners who've pinned their financial future to Wall Street are going bonkers over this advice.

 

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[SBS.95]

I think it's Elite Daily trying to be edgy (as usual.)

Also if you click on the author's name you can see her other articles. She seems like a "I'm-27-and-let-me-tell-you-I've-seen-it-all" type of person. Definitely not someone I want to take advice from.

I too believe in Experience > Things, but I don't like the idea of living paycheck to paycheck. She refers to someone's 40s as being the years that one spends stressed out about their mortgage and kid's college fund. Ironically that seems to be a direct result of living one's 20s on the sidewalk, the lifestyle she is advocating.

This article is sidewalk, the harsh response is sidewalk, and I choose neither.

 

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[LifeTransformer]

I can see the argument, but if you save well whenever you can (without making yourself a boring pauper), the quicker you'll have enough "f you" money to be able to do whatever the hell you want.

The fact one of the things that this person seems to enjoy doing is going to the club, gives you a bit of a clue as to the type of person writing the article too.

 

[Mattie]

The woman reminds me of my younger self. And frankly I would tell her, having fun and being focused on the wrong things will get you no where in life. There's so much she doesn't know about life. And saving money isn't always enough as I've learned. You can have an emergency fund, and just a side walk job, any job, but it's not enough when life hits you hard. I think we can be very naive when we're young. We believe we're invincible, bad things can't happen to us, family will always be there to support you and pick you up off the ground no matter what happens in life.

Realistically, it doesn't happy that way for everyone. I bought into a lot of things when I was younger. Half truths and being influenced by others that never made it themselves beyond side walk or slow lane. I invested my money in the wrong things, and of course you believe your family and others know what they're talking about.

And you find out later they don't have a clue. I think this woman is just on the edge of knowing what she's taught isn't the answer, but still not there yet. I hear this kind of stuff from my son's friends and generation all the time. And they're on the right path, but still have the attitude, the rebellious nature, and don't have the work ethic and haven't learned to hone that knowledge and personal power to direct it in the right direction to create the world they want to see. I listen to their ideas, know they're intelligent, and will break the rules of society. It will be interesting to watch them navigate in this world and where they will take the world.

 

[Kung Fu Steve]

It's sound advice -- unless you haven't been given the rest of the picture (which it sounds like she hasn't).

Two other statements that I took to heart early on:

@MJ DeMarco said "Don't skip the starbucks in the hopes you'll have a million dollars years from now."

@snowbank said "If your goal is to win the game, every penny after your living expenses should be used to try and win the game."

But to take these statements at face value (like this lady seems to have done) means you don't "get it" ... yes I'm not going to skip that second glass of wine to save $8 -- but at the same time I'm not blowing all of my money on hookers and blow, either.

Yes, I spend all the money I have... on investments, business ventures, marketing, etc -- for the purpose of making more money.

This girl has clearly taken these comments at face-value without truly understanding them and decided "oh well, YOLO!"

It's not the worst thing in the world to spend all the money you have... but when you start spending MORE than you have -- you're gonna have a bad tiiiiimmme.

 

[mittenslol]

First post ever here, but after reading the article I just couldn't help myself to make this the thread I came in on.

MJ, I read your "free mentoring" post, followed you, and then went into this post within my news feed..

Lauren explains a pretty reckless way of life.. at least in comparison to myself, and apparently to many across the web as well. The first thing I would have to ask her is "why does it have to be so black and white"?

Why does the ENTIRE previous generation have to be considered die-hard savers? She makes it seem like everyone's parents are just annoying and brainwash their children to be OVERLY cautious with their money...

Why does this ENTIRE generation have to be so hard up for attention, social acceptance, and just dying to get out and do something wild? She again just generalizes her situation.. or even her and her friends and then uses that to summarize how it is for EVERYONE in their 20's?

And really.. why does she think it's so cut and dry?

---------------------------------

Here's my thoughts..

I'm 24, I make 1000 dollars a week.

6% of that goes into 401k, matched by my company.
25% goes to taxes. (roughly)

After all bills are paid I end up with around 600-700 dollars a month. Sometimes more, sometimes less.

I aim to put back 50-100 a week. 5-10% of my gross income.

I'm pretty liberal with my money I think.. I go out every weekend, I eat well, I have a new car.. everything that most money-mizers say not to do! And I still have a savings, a retirement account.. I have security, and I have fun.

---------------------------------

Is it really sacrificing my youth by investing 6% into a company matched vessel?
Is it really sacrificing my youth to save $50 a week when I have hundreds more to play with?

---------------------------------

I'm not even touching on what people's personal preferences will have them do.. some people would rather not go out.. some people would rather make food at home, save a little money and maybe use extra cash to invest in prospective businesses..

Too much black and white.. she is talking about people here.. we come in all shades, shapes and sizes.

 

[luniac]

I just don't understand this whole thing with "ENJOY YOUR 20'S!!! ITS YOUR BEST YEARS, NO AMOUNT OF MONEY WILL BRING BACK THE YOUTH OF YOUR 20'S, PARTY IT UP GO OUT MEET GIRLS DO STUFF, YOULL REGRET NOT DOING IT WHEN YOUR'RE OLDER!!!!!"

Everyone F*ckin tells me this, my coworkers, my mother, my friends, EVERYONE!!!

I just don't understand... is my body gonna go into chronic failure the moment i hit 30?

I'm making it a habit to work out and push my body almost daily for the rest of my life. I do my best to eat well. I'm working on my fastlane one baby step at a time...

If i don't earn financial freedom until im 30 or later then why the F*ck can't i live my 30's as my best years, and my 40's and my 50's etc etc etc... if i look great, feel great, and financially free then what broke snot nosed punks in their 20's are gonna tell me im too old to party or something...

If I followed these people's advice the only regret i'd have is following that advice... as im still paying off my car loans and mortgage at 40...

 

[Rethagos]

@luniac - remember the Law of Everyone?
Everyone is living a mediocre life. Guess what you get for doing what "everyone" does.

 

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[MJ DeMarco]

meditation don't pay the bills.

And recklessness creates more bills.

 

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[The-J]

The article is stupid. Sounds like she's just trying to be edgy and cater to the whole 'live in the moment' thing.

She says to 'not save money but to make more money'. Since when did these two things become mutually exclusive?

I get she's trying to attack Slowlane mediocrity, but her delivery is all wrong.

 

[LifeTransformer]

Just come up with a little "quote/poem" pondering this thread.

Many people take many paths, at various points in time,
If your's does not encounter this one, don't belittle mine.

 

[sija1]

I used to have the same mindset. I've spent a lot of money before I was 23 chasing experiences and fearing that I would be too old later to have fun. I don't regret it since this has brought me a lot of experiences that shaped who I am today. But on the other hand, I now understand that it would have been smarter to save and invest wisely and build something. If we all knew when we were younger what we know now, all of us would have been millionaires before hitting 22-24.

That being said, I can understand her point of view. And on the other hand I can understand the opposite. Those who were living their life to the fullest and having experiences by the time they hit 20 struggle today. And those who had nothing, live better lives. Wisdom is built on experiences, better life on sacrifice. Balance is the perfect solution, but also the hardest thing to master.

 

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[Roland]

Don't save it, but use it to make money.

That's exactly what I think. Save some money while you work on your first ideas. As they will most likely fail, you won't loose too much money while you are learning the 101 of entrepreneurship, then invest in your project when it starts going well.
If your money is giving you more that 5% ROI then it is better invested in your business than in your bank account. Just keep a safety net if you can afford it or take a calculated risk at the beginning.

 

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[mayana]

And recklessness creates more bills.

I think some people might've skipped over the part of your book when you talked about that

 

[AntEmpire]

The slowlane responses to this article were as expected, but this one from Elite Daily's comments section really summed them up:

"If you were to invest the $200/month (that you claim is meaningless)--over the course of 45years (about the average time GenY has left to retire at 70), you would amass a wealth of over $1 million using the lifetime average of the S&P 500 (8% annually). This money could be used to retire, start a business you've always wanted, buy a vacation home...you name it. Overall, people who save for retirement can actually retire, and not be forced to work until they die. Pension plans and Social security are dying with our grandparents generation."

Sacrificing today with the hope of a better tomorrow....

 

[Freedom61]

The slowlane responses to this article were as expected, but this one from Elite Daily's comments section really summed them up:

"If you were to invest the $200/month (that you claim is meaningless)--over the course of 45years (about the average time GenY has left to retire at 70), you would amass a wealth of over $1 million using the lifetime average of the S&P 500 (8% annually). This money could be used to retire, start a business you've always wanted, buy a vacation home...you name it. Overall, people who save for retirement can actually retire, and not be forced to work until they die. Pension plans and Social security are dying with our grandparents generation."

Sacrificing today with the hope of a better tomorrow....

This thread popped up on the bottom of my page and I had to check it out.

I sure hope the guy that left that comment in Elite Daily's page from your post finds MJ's book. Who has the patience to wait 45 years to start the business they've "dreamed" about? Do they forget the fact they might not even live that long? I'm beyond thankful I found MJ's book among other entrepreneurial outlets (Secret Entourage, etc.), otherwise I'd be stuck in the slowlane with my former slowlane biz and/or working a slow lane job wishing for wealth.

 

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[D11FYY]

I think we should send her a copy of the fastlane.
Everyone is diffrent some like to travel, some like to study/learn new things (believe it or not), some are sidewalkers and like the flash life (*cough* debt lover), some are savers from the get go but the main thing is each individual is diffrent with various aspirations in life.

Always believe you should be sensible no matter what you do and if you cant afford it well either save or create something that will help you attain it.

@AgainstAllOdds if she did it for ad revenue she is a genius. But great way to look at it lol.

 

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[Guest3722A]

Saving just to save isn't as important as developing a secure enough foundation to launch from and experiences uncover needs, develop character and help people adjust to risk

 

[Trivium iz rC]

Interesting article, It's interesting to see how the other side of (the millennials) view money & there youth.

I believe in living life & experiencing different things. But she seems like a "Event" type of person always looking for instant gratification. Most people that are broke in there 40's & 50's are the same people who are living the lifestyle like she is in her 20's.

Your youth is the most valuable asset in your life-time. Most people throw it away to partying & consumerism thinking there youth will be endless in there life-time. Soon enough time catches up with them & they are 40 looking in there mirror and asking "were did the time go".

If you look at some of the wealthiest people, they all used there time in there youth very wisely. They worked hard and re-invested that money in themselves or back into there business's. It's amazing how if you work hard in your youth and Invest & keep growing your businesses how fast the compound effect works.

Most people spend there youth dicking around. Few people do what @MJ DeMarco did and build a business in his youth and live a wealth of a lifetime.

 

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[Bouncing Soul]

Debt reduction is "savings" by the "official" metrics of the government.

We tried to outearn our spending until about our 30's when we woke up about a million in debt (student loans and mortgage over $900k of that), in spite of quadrupling earnings in about 5 years. Hitting that magical 1 million mark, except red instead of black, truly drove home you've got to have your shit together. Especially as I was trying to launch a business at the time, but we needed paychecks. You can spend all your money no matter how much you make, and history is littered with examples. Debt is properly called leverage, earning more money and continuing to use it to borrow more will just see earning more money dig you an even bigger hole and faster.

For me, this "experiences over stuff" thing is horrible advice in so many ways. It suggests you're dead when you hit your 30's, get married, have kids...whatever.

I personally don't particularly consider travel much of an investment in myself, and I've traveled a lot. Learn, try, fail, succeed at making money, investing money and how your body works, get comfortable in your own skin...that's what I think you should do in your 20's, those investments will pay off forever. Your motorcycle trip across India or whatever, that's always possible.

 

[Jake]

Your youth is the most valuable asset in your life-time. Most people throw it away to partying & consumerism thinking there youth will be endless in there life-time. Soon enough time catches up with them & they are 40 looking in there mirror and asking "were did the time go".

It's difficult to tell or even judge someone on how they spend their prime years. I'm 32 now and every birthday I think "were did the time go?" The clock moves faster and faster every single year.

Do what makes you happy. Hopefully that includes creating something that other people find valuable.

 

[luniac]

@luniac - remember the Law of Everyone?
Everyone is living a mediocre life. Guess what you get for doing what "everyone" does.

can't escape these people, they're everywhere....

 

[AndrewNC]

I'm not blowing all of my money on hookers and blow

Glad you're not spending ALL of your money on that

but seriously though...

It's not the worst thing in the world to spend all the money you have...

Living life and filling it with experiences sure beats permanently pushing happiness out of the now and into the future.

 

[H. Palmer]

Let's look at the big guys.
Here are some people whose lives I studied.

Alan Sugar, Donald Trump, Dan Pena, Bill Gates, Mark Zuckerberg,Warren Buffett, Ingvar Kamprad, Jeff Bezos, Arnold Schwarzenegger, Karl Albrecht, Peter Thiel.

All of these had savings in their twenties.

These....

Robert Kiyosaki, Felix Dennis, Sam Walton ...

... I'm not sure of because at that stage in their career they weren't settled yet.

But if they could have saved, I'm sure they would have.

 

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