Your 20s are some of the most important years for your finances and your career. This week on The Payoff, I'll tell you the 5 best investment I made in my 20’s
My college degree. I know there’s room for debate on whether college is worth the investment. But it was the best thing I could have done for my career. I chose a state school that was not only affordable but also had one of the best programs in the country for my degree of choice. I moved off campus, worked part-time to pay the rent and graduated with just $7,000 in student debt. That’s a fraction of the $25,000-plus most graduates my age had to deal with.
Thank you notes. Believe it or not, gratitude is probably one of the most important skills I’ve developed in my career. I can link the first two jobs I landed after college back to a pair of thank you notes. I left thank you notes at every internship, part-time job and college class I had. When it comes time for your old boss or professor to recommend someone for a job, you might suddenly find yourself at the top of their list. I’m not saying it’s not important to have the skills to get the job done, but when you’re competing against a bunch of other folks with the same experience you have, it’s the little things that help you stand out from the pack.
My 401(k). I wasted so much time in my early 20s thinking I was too broke to save for retirement. I could barely pay the rent! But then I started reading books like "The Automatic Millionaire" and "Think and Grow Rich." They were written decades apart but they share a common thread of advice: to really build wealth, you’ve got to start small and start early. Compound interest became my new best friend. I started saving 5% of my paycheck when I was 24 and I eventually worked my way up to 10% when I could afford it.
My credit. I consider paying off my credit debt after college a huge investment. I had three different credit cards with interest rates from 9 to 19%. And I was carrying a balance each month. I’d pay the minimum balance and then get charged just as much or more in interest fees. At the time, I told myself it was more important to save money than pay off my debt. But my bank offered a horrible savings rate of less than 1%. So it made more sense to pay off my high-interest debt first and save later.
Me time. Some people thought I was crazy but I turned down a job after college to travel through South America. I figured once real life started, when was I ever going to have six months of uninhibited time off again? But I didn’t spend all that time sipping cocktails on the beach. I decided to make it count. Before I left, I found freelance work that allowed me to keep working on my professional skills while I was on the road. It was a gamble that really paid off. I can’t tell you how many job interviews I went on where we wound up talking more about my adventures abroad than my GPA.