Yahoo Finance How I saved $100,000 before I turned 20
At just 19 years old, I had $100,000 in my bank account.
A year later, I’ve managed to add another $150,000 to it.
But if you think there’s some hidden secret to saving cash, there really isn’t. In fact, my story doesn’t veer too far from all the tips and tricks you’ve heard about building wealth.
With that said, having researched wealth creation for around four years now, I can confidently say it only takes one or two small changes to make or break your money goal.
Here’s how I did it.
Step 1: The right mindset
The first thing I had to do was get into the right mindset.
No one owes you anything, and you are probably not special.
Most rich people weren’t handed their wealth on a silver platter, so you’ll need to learn to be inspired by those with more than you rather than envious.
Another thing to note is that it’s pretty unlikely you’ll just stumble into money by pure luck, so you’ll need to work hard for it.
Step 2: Find the right formula
Saving is different for everyone, so getting a formula that works for you and inspires you to save is key.
For me, I thought of all my purchases in terms of how many hours it took to me to make the cost of the purchase. For example, a $200 pair of shoes while I was making $8 an hour meant 11 hours of working at McDonalds to purchase the shoes.
While this was effective for some time, as my income increased I had to change my formula again.
Then, I almost exclusively only purchased things that were either a necessity, made me happy long term, made me money, saved me money or had some other profound impact such as health benefits.
Step 3: Make real money
I had been working for an employer from 13 starting at $8 an hour with a side-hustle of running a gaming/tech channel on YouTube.
Soon, I had to progress to applying for as many higher-paying jobs so I could handle.
Eventually, I was making $35 an hour.
Then, I used this money and every spare second I had to start a new side-hustle which soon blossomed into several success side hustles and ultimately one successful business I run to this day: AussieMoneyMan.
Step 4: Invest
I had to find a way to make the money I had saved work for me, which means I had to invest it.
That means investing it not only back into the business, but in other investments like shares or property.
Once you have done your reading on investing itself and your investment of choice and are 100 per cent confident in it, you can do what I did and invest every cent you get and start seeing the compounding of your money.
This is something that has helped so far but will really pay off later thanks to compounding.
What else can you do?
There are plenty of differing opinions in the finance world, people with biases, agendas, lack of research skills, general laziness and else, so you need to be critical of what you hear to make sure you’re making the right choices.
And if you think money is going to make you happy, it’s not.
There is evidence to suggest that 80 percent of happiness comes from relationships (family, friends and romantic) with the other 20 per cent coming from things like working towards reaching your potential and having meaning.
However, having money will mean you have much more time and resources to do the things that will make you happy, something infinitely more valuable.
This is important to understand to keep on the right track.
By Nicholas Muscat - See more from Nicholas at AussieMoneyMan on YouTube or AussieMoneyMan.com.au. You can also follow him @aussiemoneyman on Instagram or Facebook.
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