Many of you tell me that you send this section to your teenagers or young adults.
If it was your father, your mother or one of your grandparents who sent you this text, sorry. I can do nothing. You just have to reply to them with a heart emoji, press delete and return to TikTok. I won’t “take it personal”.
The reason why older people tend to send this to you, younger people, is that they would have liked to know everything that is being discussed here at your age. This is by far the comment I receive most often. “I so wish I knew that when I was 20! »
What they are really saying is that some simple knowledge could have changed their lives. And can still change yours.
If we summarize, I would say that the biggest mistake we make in our twenties and thirties is to increase our lifestyle without having first gotten rich. Let me explain what I mean by that.
This is not true for everyone. But for many, your twenties are the age when you start working after studying. So our salary will often go from a student salary to that of an entry-level worker. It gives us the feeling of being masters of the world.
The reflex at this point is to increase your lifestyle. For example, some will leave roommates to rent or buy a condo. And since dragging your old furniture and appliances into a nice condo seems crazy, many will furnish it on credit.
And so, is it happiness?
Almost ! This is because the car, which dates from 2012, is starting to look shabby. So we visit the dealership, and they offer us unbeatable 96-month financing on a beautiful, almost new SUV.
So, are we there?
Not quite ! Who likes to stay in the city on the weekend? It’s gray! Friends rent a chalet in the North and offer to split the bill. Yes !
It’s ok now ?
Not really. It’s Wednesday evening, the fridge is empty, it’s dark and it’s snowing. So we go to Uber Eats and there is a sushi combo for two people for $72 including taxes, transportation and tip. Go!
In fact, we take the new power that our new salary gives us, and we hand it over to others. We give it to the condo builder. We give it to the furniture dealer. To the car dealership, to the restaurant owner, to the cabin rental company.
And so, at the end of the month, when the credit card statement comes in, we’re just as tight as before. And we certainly didn’t get rich.
“I know, but it doesn’t matter! our person in their twenties or thirties will say. In five or six years, I will earn a better salary. This will be when I put money aside! »
In five or six years, you will have even more expenses. You will be as tight as today. Probably more.
My opinion ? The best approach is to get rich before and live like a rich person afterwards.
Your new salary is the raw material that you will use to enrich yourself. Your task is to protect her at all costs.
The dollars that land in your bank account are your new employees. And so if you pay off your debts and put those employees to work instead of handing them over to the next merchant, you start to improve your situation in life.
After several years, you will realize that your thousands of employees are multiplying, and are also producing employees who will work even harder for you.
The key is that the younger you start, the less effort will be required to save on your part. For what ? Because time is the main lever that increases the number of your employees. More time, more employees. More employees, more freedom.
Too good to be true ? Jean-Sébastien Pilotte, the author of the blog Jeune Retraité, stopped working at 39. Or the day when he and his partner calculated that their investments were now working harder than them. Vincent Morin, from the Retraite 101 blog, resigned in 2021, at the age of 35.
I’m not saying you’re going to want to do like them. I say that having the option is one of the greatest gifts we can give ourselves. After all, we only have one life to live. As author Todd Brison says, your workstation won’t attend your funeral.
Concretely, how to achieve this?
If the situation suits you, keep your roommates or stay in an apartment for a few more years (I spent some of the best years of my life with roommates in my twenties, roommates who are still my friends today).
Take care of your 2012 car. Better yet, walk or bike if possible, especially if it’s a challenge for you – it’s counterintuitive, but challenges make us happier than others. the search for comfort and ease.
Organize dinners with friends at home rather than at a restaurant. Don’t spend more than $30 per month on a cell phone plan. Stop buying brats on Amazon. Realize that your wardrobe only impresses you. Travel with your backpack on your back, not your credit card in your hand.
These few tips will allow you to make the most of your freedom. One of the side effects will be saving you hundreds of dollars per month.
Take those hundreds of dollars, and invest them in an all-in-one 80% stock, 20% bond index fund in your TFSA brokerage account. If you don’t understand the previous sentence, open a TFSA managed investment account with Wealthsimple or Questrade, and schedule an automatic transfer of a few hundred dollars each payday. Save and then invest part of your salary increases.
So. You are an investor. You have nothing more to do. You can forget all this and move on with your life.
I’ve already suggested an exercise here: write down the ten things that would make you happiest in life.
People who take the time to do this typically write things like “spend time with my friends, my family”, “write a book”, “hike in the forest”, “travel”.
To achieve all this, it helps to have money. Money allows us access to something even rarer: time.
When you are in your 30s or 40s, you will realize that you will be able to do things that no one around you can afford.
Things like paying cash for an expensive contingency. Or to buy a vehicle. Or take a year off to travel. Spending time with a sick parent. Watch your children grow up.
Around you, you will see people floundering from one debt to another. Will experience health problems due to stress. Will pay a fortune in interest. People who will take your hand, look you in the eyes and ask you how you are free.
This is what everyone would have liked to know at 20 years old.
Now you know.