30 Money Lessons I Learned By 30
I turned 30 recently, and it had me thinking about how far I have come since my 20th birthday. I’ve been thinking about how radically different my life is and I am as a person then I was 10 years ago. The more I think about it, the more I realize how much money (not having it mostly) has impacted me. Being a personal finance nerd, I have learned a lot about money over the past 10 years and wanted to quickly share some of my lessons with you.
1. The Time to Start Thinking About Your Finances is Yesterday
When your finances are a mess, I know it can be tempting to close your eyes and pretend it isn’t a problem. It is a problem, and the sooner you address that problem, the better off you will be.
2. You Need To Be Patient
Once you decide to address your financial situation head-on, it’s natural to get anxious and impatient with the process. Getting in financial shape is no different then getting in physical shape, It’s going to be a long, difficult and rewarding life-long journey.
3. It Takes Discipline
Did I mention getting your finances in order is like getting in shape? Once you have your plan in place, it will take tremendous self-discipline to follow through. If you make mistakes or temporarily fall back to old habits, make the adjustments you need and keep moving forward.
4. Sometimes You Can Make All the “Right Decisions” and Still Struggle.
Ask anybody who thought they were set to retire before the financial crisis in 2008.
5. You Will Make Awful, Emotional Decisions with Your Money
Ask anybody who was (understandably) panic-stricken during the financial crisis in 2008 and made an emotional decision to sell at the bottom of the market.
7. Our Educational System Fails Us When It Comes To Money…
I have 13 years of public school, 4 years of undergrad and a masters degree under my belt, and almost everything I’ve learned about personal finance has been on the internet.
8. …But There are Tons of great personal finance bloggers and resources out there for FREE
There are too many to name, but apart from myself, I would recommend Mr. Money Mustache.
9. The concept of Financial Independence
Speaking of Mr. Money Mustache, go read this post.
10. Carrying Huge Debt Can Be Emotionally Crippling
11. Paying off That Debt Requires Sacrifice…
When I got my first “Career job” I lived with my 2 buddies from University in a crappy apartment above a health food store. If you placed a tennis ball on one end of the apartment, it would quickly roll down to the other end and my room was more of a closet then a room. Why did I live here? Because rent was $300 and that allowed me to throw every penny possible into my student loans.
12. …But It is Totally Worth It
Happy to say that today I am debt free (apart from my mortgage) and it is every bit as freeing as you think it will be.
13. The Power of Index Fund Investing
14. What A Money Pit Your Car Is
It’s funny when I was broke and rode the bus every day I used to think “I wish I had a car”. Now I have (some) money and need my car for work I think to myself “if I didn’t have a car, think of all the extra money I could be investing”.
15. Sometimes You Just Get Lucky
The Year after my wife and I bought our house, home prices in our neighborhood rose by 60%. For the first time in my life, I had a positive net worth. I had done nothing to deserve it, but that does NOT bother me, like at all.
16. Lifestyle Inflation Is a Real Thing
You got the promotion and it comes with a big fat pay raise! The first thing you do is go out and buy a bigger, fancier car. That is called lifestyle inflation, and if you don’t watch it, you will have serious financial issues down the line.
17. Celebrate Your Victories, No Matter How Small
Don’t forget that by taking control of your finances, you are being brave and a total badass! Pat yourself on the back once in a while!
18. You Need to Take Risks
Taking risk can be scary, especially if you have financial anxiety. But everything in life is a risk whether it be investing, buying a house, getting married, having a kid, it’s all risky. To quote Jim Rohn “This is how risky life is, you won’t get out alive”. Don’t be reckless but don’t live in fear either.
19. Credit Card Debt is Evil and Must be Avoided
20. Life is Cyclic
Life is very much like the stock market, there will be “boom years” where life is a party and “bust years” where things go in the toilet. But don’t forget, if you are smart and persistent you will experience tremendous growth and success in the long run.
21. Pride Can be Expensive.
It is amazing how much money you can save if your willing to grab things out of the trash.
22. Bet On Yourself.
When I was 22, I was dead broke and dealing with serious financial anxiety. I was accepted into a master’s program in a town 2,000 Kilometres away in a town where I knew nobody. There was no guarantee that I would have success, but I bet on myself and my life has been exponentially better ever since.
23. Owning Real Estate Can be an Elevator to Wealth
24. The Concept of a Side Hustle
25. Money Spent on Trips and Memories is Almost Always Worth It
Especially when you take pictures, videos, and document every journey. One day these memories will be more valuable than your car.
26. The Miracle of Compound Interest
Ever hear the term “my money is working for me”? That should be amended to “compound interest is working for me”. The concept of compound interest is simple, and I dive into it more here.
27. Get Comfortable With Talking About Money With Your Spouse, Like ALL THE TIME
My wife and I are both very frugal by nature, but we have completely different tolerance for risk and investment. She would put all our money under the mattress if she could, and I would remortgage the house to reinvest money into the stock market in a down year. But we talk about money and our future and retirement ALL THE TIME and as a result, we are on the same page about money and coincidentally we have a happy relationship.
28. Insurance is Boring, But You Need It.
You know you do, so shop around for the best rates and just get it down with.
29. Writing Down Your 5-year, 10-year and 40-Year Financial Goals is Powerful
30. Be Willing to Question Everything and Keep Learning
I’ve learned a lot about money in the past 10 years, but the biggest lesson I’ve learned is that things change quickly, and you must be willing to keep learning. 10 years ago, nobody ever heard of Bitcoin, now I can’t get away from it. We never know what the world will look like in the future, so question everything and be willing to learn and adapt.