When we look back to our twenties, or compare notes with others about their twenties, of course certain regrets pop up. Some of them are just things you wished you could have done if you had the opportunity and others are just mistakes you should have avoided.
Sometimes the best legacy we can leave the generation now entering the working world is to let them know what mistakes we made so they can try to avoid. Naturally, we’ll be ignored by most because who really listens to advice at that age? But for the few Young Earners that care to listen and avoid wasting valuable youth on repeating old mistakes, here are a few you should take into account (in no particular order).
Twenties are the foundation for the thirties
Sounds a little obvious, eh? But what we mean is life is great when you are young with decades in front of you. Sometimes, as you enjoy life in your twenties, you forget to think about your career. The reality is a successful career is usually established in your thirties. Look at most successful senior people; by their mid-to-late thirties, they are already in fairly senior positions laying the foundation for future executive positions in their forties and fifties.
While we are referring to office life above, the same applies for the self-employed / entrepreneurs. Of course, there are examples of self-employed persons who started a successful business in their forties, etc. But they are the exception. Most of them were toiling in their twenties and thirties to get their business going.
So, while you are feteing and enjoying being young, just remember, party hard but also work hard.
Forgetting you need to compete and excel
When they are job hunting, Young Earners don’t have the benefit of experience to strengthen their resume, so the only way for them to differentiate themselves from others are the quality of their school, academic performance, and well-roundedness.
The school quality is probably less of an issue in the Caribbean, but it is a factor to be bear in mind. More importantly is, what was your academic performance? Were you “average” or did you excel? Which person do you think someone will want to hire? How long did you take to complete your exams/qualifications? Do you realize that 10 years later, it will look awful that you took 6 years to complete your first degree?
Academics are also not everything. Recruiters will always favour candidates who made the effort to be more well-rounded. And we don’t necessarily mean sports and hobbies, although many sports allow you to demonstrate you can be part of a team. We are referring to volunteering for good causes and looking for non-academic ways to learn, grow, and demonstrate leadership qualities. These Young Earners will likely win every time in the competition for a job.
Entering into credit card debt
Probably the worst thing for a Young Earner is to be given a credit card. That little piece of plastic is a powerful financial product, but it appears deceptively simple.
For now, the simple message is, if you have a credit card, NEVER get into credit card debt. If you use it, pay it off immediately. If you do not expect to be able to pay off a particular purchase in full, then walk away and do not use your credit card.
We’ll get into the details in a separate post about credit cards (stay tuned!).
Not taking risks
There is no better time to take risks than when you are young and have time either to pursue the risk to a successful conclusion, or recover from an unsuccessful attempt. Risks can be any type: relocating to live abroad; starting a business; pursuing a dream; fighting for a cause; taking a job unrelated to your academics or experience; etc.
At some point, Life will step in and take over e.g. getting married, pursuing a career, having children, etc. While these are challenges as well, don’t be in a position where you look back and wish you had taken some time to pursue a particular dream.
The current generation of Young Earners live in an unprecedented time of openness and sharing because of the spectacular growth of social media (Facebook, Google+, etc.). They all have tremendous benefits but also particular drawbacks when you are job-hunting.
They are one of the first places your prospective employer will check to learn about the “real” you, and it therefore requires continuous foresight about the nature of the material that you make public.
Once something is on the internet, you can never recall it, so be careful what you publish about yourself.
While you’ll continually hear the mantra “invest while you’re young”, our response tends to be, “invest with what? Young Earners have no money”. Sure, it is a great idea to invest in stocks or get a jump start on a pension plan, but we are not sure how realistic that advice really is in most cases. But insurance does require a moment or two of additional thought.
Insurance is cheaper when you are young and you should consider if life or health insurance is worthwhile. We’ll discuss life insurance more in a future post, but health insurance in particular should be considered. You should discuss the pros and cons with an appropriate insurance advisor.
In The Budgeting Series, we spent a lot of time showing you how to create a personal budget. The simple reality is, it is impossible to have true Financial Freedom without a proper budget, and anyone trying to settle their life down will need to have one.
But the other reality is that Young Earners will likely not make this is a priority. We recommend it should be a priority, but we do acknowledge that it may not be. So what should they do instead?
Even if they haven’t taken the time to prepare a full budget, they should get into the habit of saving a reasonable percentage of their take-home pay (we recommend 15-20%) to not only Build an Emergency Fund but also to have a savings pool to meet one of the life events that must occur e.g. further studying, possibly relocating for a job abroad, paying for a wedding, downpayment on a home, etc.
Life in the Caribbean is fantastic. Family values tend to be important and it is easy to make and keep friends or relationships for life. But one of the drawbacks is you are lulled into a false sense of belief that the majority of the world lives the same way.
You should, if money allows, travel to a larger country and get a broader perspective on life, work, and competition. We are not suggesting you necessarily need to live abroad, but the experience of either traveling abroad or living somewhere else is invaluable and eye-opening. Amongst other things, it also builds character and confidence.
Have you made any mistakes you’d like to share with Young Earners? Give us your thoughts on the comments below!
We looked for a good book to recommend on this subject, but most of them are written for a North American market. Having said that, here’s a top rated option that has some good advice!