I started working when I was around 12 or 13 years old. It wasn’t child labor; I began by babysitting and then tutoring younger kids. Since I could play the piano quite well, my music teacher would let me use the music room at lunchtime to give an hour-long lesson. I remember charging $20 for that hour, which felt like a lot of money back then. While my friends were bored in the cafeteria, I was earning money!
My high school was located in a wealthy neighborhood, and most of my friends received substantial allowances. However, none of their allowances matched the $500+ I was making each month from my part-time jobs. After school, I’d pick up two kids and help them with their homework until their mother came home. By 7 PM, I was home, ready to have dinner and study a bit.
Studying came easily to me and didn’t take much time. I even bought myself a TV because I was bored. Looking back, I had about five clients for tutoring or piano lessons at any given time, along with occasional babysitting gigs, playing my piano, taking horse riding and tennis lessons, being a girl scout, playing the organ at church, and I still managed to feel bored occasionally!
When I moved on to college, I always had 2-3 side jobs going. From being the employee of the month at McDonald’s to working as a technical engineer for a computer multinational, I worked constantly. Most of my classmates focused on partying and claimed they were “too busy studying” to work. In reality, they just wanted to have fun and live carefreely for five more years. Now, they earn six-figure salaries yet are chained to their jobs, repaying student loans for nights they can’t even remember. Meanwhile, I’m the one lying in a hammock under the sun.
Nowadays, I manage a small team of workers and run a hobby blog. Reflecting on the past, I realize that your most productive years are when you’re young. Do you remember college, when you could sleep for two hours and still make it to class in the morning? I did that too, except I was waitressing until 2 AM and my classes started at 8 AM.
All those jobs allowed me to graduate from college with savings, buy a property during my final year, and travel the world for a year instead of joining the rat race. From what I’ve read on other blogs and heard from friends about their finances, I still have a higher net worth than most people my age.
Starting early gave me an incredible advantage. After a short career with an average salary, I left the corporate world at 29 and began living my life on my own terms. Let’s look at some numbers:
If you start saving $1,200 per year (just $100/month) from age 20 to 25, then increase it to $3,000 (up to $250/month) from 25 to 30, with an interest rate of 7%, you’ll have $25,843 when you turn 30. Yes, the rate is high, but you can afford to take some risks when you’re young. Let’s say you start a family, have kids, and stop saving but let your savings continue to grow at 7%. By the time you’re 50, you’ll have $100,000, having saved less than a car payment each month from age 20 to 30.
If you start saving at 35 and put away $4,000 a year, it will take 15 years at the same rate to reach $100K. You will have invested $60,000 instead of $21,000 to get the same $100K for retirement. Keep in mind, $100K won’t be enough for retirement, so while finding $4,000 a year might be doable in your 20s, finding $40,000 a year at 35 to build a million-dollar nest egg is a different story.
So, how can you find more money when you’re young?
Be cautious about college. I went to college because I didn’t know what else to do. I wasn’t passionate about my classes and don’t think I learned much during those five years. Had I taken a job as a bank clerk or some entry-level position, I could have started with around $20,000 a year and probably ended up making $35,000 after five years. Given that I saved $25K on half that salary, I likely would have saved $50K by age 22. College “cost” me $25K. Things might have evened out between being a college graduate with no experience and having five years of work experience without a degree.
If you do go to college, find a cheap degree. There are many ways to study affordably. You can start at a smaller college and transfer to a more prestigious one later. Find a job on campus that provides free housing or a significant discount on tuition.
Avoid lifestyle inflation. I didn’t own a car until I was 30. In Europe, public transportation is convenient, and I always lived close to my job. A car wasn’t necessary; I rented one when I needed it. While you don’t have to live with your parents until you’re 30, if you can’t comfortably afford your lifestyle, try to make do without.
Take any job when you’re young. Don’t be picky—a job is a job. I flipped burgers, changed diapers, and faked smiles at Disneyland, but it was money. You can handle the lack of sleep or physical effort, so go earn some. Laziness now will only get worse in 20 years. Sure, you could try for an amazing internship at your favorite company—that would be great—but if you don’t get it, find another way to earn.
Be good at your job, whatever it is. Even if you’re flipping burgers, aim to be the best and negotiate a raise after a few months. I taught an adult French class at night and the language school paid me poorly. After a few weeks of excellent feedback from students, I asked for a 20% raise and got it. You’ll likely be in an underpaid position, competing with other students lacking motivation, but if you stand out a bit, you can earn more, save more, and exit early.
Do your best to start early. If you didn’t for yourself, at least tell your kids.
What do you wish you had told your 18-year-old self about money?