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5 Things I Wish I Knew When I Was 20

By JLP | September 19, 2006

Have you ever caught yourself daydreaming about being young (or younger) again? I admit to thinking about this every once in awhile. Usually when this happens, I end up thinking about how great it would be to go back to those days, knowing what I know now. It is a shame that young people don’t take the advice of people who have already gone through what they are about to go through. Anyway, here’s a list of five things I wish I would have known when I was 20-years old:

1. The power of compounding is incredible! I didn’t make a lot of money back when I was 20, but had I just been able to save 10% of what I made back then, I could easily have an extra $50,000 now. And that’s nothing! Take a look at how much you can save in a lifetime.

2. AVOID saddling yourself with credit card debt (or any debt for that matter)! Yes, you need to build up a credit history. However, you need to make sure that ANYTHING you buy on credit can be paid back immediately. Also, if you are borrowing to pay for college, borrow the least amount possible. Remember that whatever you borrow will have to be paid back, which means you will have to start your career already in the hole.

3. Fashion and trying to stay in style is fleeting and a waste of money. Be yourself and don’t worry about what other’s think. Yes, you need to dress nicely, but you can do it for a lot less than you think. Trying to stay with the trends is especially foolish if it means you have to charge it (yes, I did this).

4. Concentrate on the task at hand: college! It’s tough being 20-years old. You feel like an adult, you want adult responsibilities, and some of your friends are living it up because they skipped college and went straight into the workforce. Stick to your plan! You won’t regret it once you have graduated from college.

5. Enjoy your life as it is. Sure, it is important to have dreams and plans, but try to enjoy life at 20. Trust me, it won’t be long and you’ll be 36 (nearly 37) and have a wife, 3 kids, a house (and mortgage) and all the other stuff. Life has a way of happening, whether you enjoy it or not!

Those are five things I can think of right now. I’m sure there are others.

Topics: Basics, Financial Planning, Personal Growth | 16 Comments »


16 Responses to “5 Things I Wish I Knew When I Was 20”

  1. Dave Says:
    September 19th, 2006 at 9:58 am

    Exercise. Your body breaks down fast after 30.

  2. DSA Says:
    September 19th, 2006 at 10:22 am

    6. Budget your money and build a “rainy day” fund. I’ve learned the hard way that it’s easier to get in the habit of doing both when you’re single that when you’re married and have 2 kids.

    7. Read. You cannot stop learning, and reading is one great way to constantly absorb ideas and opinions.

    8. Network. Like JLP’s comments on compounding, the earlier you start building your network, the better off you’ll be when you really need to rely on it.

    9. Get an advanced degree. The global economy places a premium on knowledge, and a straight BA is quickly becoming a commodity.

    10. Lastly, remember to have fun. Now that I’m married with 2 kids, a dog, mortgage, minivan, graduate student loans and endless bills, I look back on the fun, crazy, spur-of-the-moment things I did in my 20’s and smile.

  3. Jay Bryner Says:
    September 19th, 2006 at 10:48 am

    One thing that I would add to this, is to fully fund a Roth – IRA in your young years. If you fund a Roth when you are still not making enough money to pay taxes, then you effectively get that growth tax free!

    One year I even used my tax refund (I love the earned income tax credit) to fund a Roth IRA.

    Free money!!

  4. fin_indie Says:
    September 19th, 2006 at 10:57 am

    Buy your first house early! Bought my first condo for $67k at age 23 and 11 years and 4 homes later, i have 75% equity in a half million dollar home.

  5. JLP Says:
    September 19th, 2006 at 11:01 am

    Great comments, all of them. I wanted to keep the list small, but clearly I left some things out.

  6. Miguel Says:
    September 19th, 2006 at 11:13 am

    While there are lots of things I wish I’d done differently, I don’t really think it would have been possible. I’m hard-headed and had to learn the lessons of youth the hard way. That’s the way it had to be. Since life hasn’t turned out too badly (desite my early screw-ups), I can’t complain.

    Okay – one wish – I wish I had entered my ultimate career sooner. But given the poor economy when I graduated, I had to take an alternate path for a few yrs, so not so sure I could have had more control over that. Mostly, I’m very very grateful to have had the oppty to fix those early mistakes and eventually get to where I wanted to be, though it’s taken more work than it probably should have.

  7. Matt Says:
    September 19th, 2006 at 11:24 am

    use your early 20s to figure out what you want to do, most of the people that I know left school having studied something completely different from what they do. Most of them hate what they do. Learn, grow, figure yourself out.

  8. More Bread Says:
    September 19th, 2006 at 11:51 am

    All of these are good advice. I would reiterate what JLP said for #5. Enjoy where you’re at. Yes, you don’t make a lot of money, can’t do a lot of things, but on the other hand you do have a lot of free time (hopefully) and not a lot of responsibility. Start figuring out what you want and make sure you live it up.

  9. Michael Says:
    September 19th, 2006 at 1:09 pm

    Hindsight is 100% … My five things I should have done:

    Taken the invitation from the coaches and been on the soccer and track teams in high school …. the only two sports (then and now) I had a snowballs chance of competing in.

    Get into my current career path earlier. My first career was based on a degree that with a high “employable” factor. Later I got into something I enjoy a lot more, and I make enough to have a nice life. If you do what you really like the money will follow, that’s what they say ….

    Stopped smoking pot sooner, lol … and that would have fixed a LOT of other things, lol ….

    Purchased a house and/or land as soon as possible ….

    In my 20s, had a long talk with my Uncle Ray about investng and financial planning; he came up from nothing and was (and is) the only millionaire in my family.

  10. Stacey Says:
    September 19th, 2006 at 7:10 pm

    I rue that I didn’t:
    1) study abroad for a semester (having had lots of Spanish classes. That would have been a great chance for lots of Latin boyfriends :)
    2) purchase fewer clothes when starting my career (but I needed suits and all the Big Eight accoutrements…)
    3) live at home another year after grad, altho’ the year I did live at home was almost unbearable. Hard to go back to having rules…but saving all that rent money would have been nice and would have enabled us to buy our home that much sooner
    4) take the dorm’s Resident Advisor position, but I had already signed an apt lease w/2 friends and didn’t want to leave them hanging
    5) get an MBA–always was told being a CPA was enough. Maybe then, but not now!

  11. mbhunter Says:
    September 19th, 2006 at 11:07 pm

    The stay-out-of-credit-card-debt tip is priceless. It is really tough, especially with all of the credit card offers being shoved at you.

  12. Vicki Says:
    September 21st, 2006 at 9:43 pm

    I’m currently 20, I believe I’m living 3 of the 5 advice above, debt free, I didn’t spend alot of $ on clothing [thus I don’t look like my age, I’m still wearing the clothes I had from HS]. I don’t work much though I has my $ save from my school grant, should I invest the $ or wait until I graduated from college? And about life, how do I enjoy it? being single or should I go out and party?

  13. » Weekly Blog Round-Up on Consumerism Commentary: A Personal Finance Blog Says:
    September 21st, 2006 at 9:47 pm

    […] AllFinancialMatters has 5 things he wishes he knew when he was 20. […]

  14. The Finance Journey » Posts Of The Week Says:
    September 22nd, 2006 at 1:02 pm

    […] JPL has a peice about 5 Things He Wishes He Knew When He Was 20. I’m sure all of us feel similar thoughs when we look back on the decisions we made at that time. Share This Post:These icons link to social bookmarking sites where readers can share and discover new web pages. […]

  15. Todd Says:
    September 22nd, 2006 at 3:24 pm

    There are a lot of great comments here! I am 22 and need to follow some of them quite a bit more than I do now!

    I think I’m doing okay for the most part. Just need to save a bit more and study a bit more.

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    September 24th, 2006 at 1:45 am

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