Building wealth in your twenties may not be your main priority. After all, you have a career to build, restaurants to try, bars to visit. But if you’re truly interested in building wealth, there’s literally no better time to start than your 20s.

Indeed, when it comes to building wealth, your best friend is time. The more time you have to accumulate savings and invest your money, the more your funds will have the chance to accumulate and grow.

Sometimes it can seem like everyone around you is more focused on spending money and accumulating things than building wealth. Ignore them. Their path is not yours.

So, in this article, we’ll look at five ways to start building wealth in your twenties. Once you start with a solid foundation, nothing will stop you from building the wealth you deserve.

Building Wealth in Your 20s

1. Learn about personal finance

The truth is that when it comes to personal finance, many people are illiterate. And it’s not their fault – our education system doesn’t focus on financial education, and many parents don’t have the ability or knowledge to help.

Your first responsibility when it comes to your money and wealth building in your twenties is to know all about personal finance. If you acquire financial knowledge, you will be able to make good decisions for the rest of your life.


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You don’t need a Ph.D. in mathematics or derivatives trading to be able to do so. There are many free or inexpensive resources to teach you all about making money on the Internet. In fact, you are reading this blog post on one right now!

I encourage you to read as many good personal finance books as possible. Resources are everywhere – you can read blogs, newspaper and magazine articles, listen to podcasts, and watch videos from trusted sources.

Financial education is an investment in itself that can never be taken away. The earlier you start your apprenticeship, the better.

2. Don’t waste college

It’s hard to resist the urge to party in college. But when it comes to building wealth in your twenties, make sure you take your education seriously, too.

One of the most important decisions you can make in college is your major, as it will partly determine your future career path.

As someone who majored in both philosophy and finance, I can attest that some majors are better at building wealth than others. Studies have shown that the highest paying college majors can earn you $3.4 million.

I’m not telling you to avoid studying contemporary dance or 15th century Japanese literature at university. But I suggest that if you pursue such studies, you also have a double major or only a minor in your passion subject.

This way, you always have a major that can help you earn a lot of money later. Of course, you might end up changing careers later on, and that’s okay either. It doesn’t need to be frozen at 20 years.

3. Maximize your income to build wealth

The first job of your career can have a profound effect on building wealth in your twenties and beyond. After all, revenue growth tends to stall after the first 10 years of your career.

When I was fresh out of college, I had two competing job offers. One paid $10,000 more than the other. I chose the lower paying job because I thought it would be a much better place to work and better aligned with my personal values.

Well, it was a terrible place to work, and I made a lot less money as a result. It was a huge mistake that I have since learned from. I encourage you not to make the same mistake.

If you don’t like your first job, that’s okay. You can always get another one after a year or two. But your starting salary at your first job will affect your future earnings at each subsequent job.

And above all, when you are hired for your first job, negotiate as much as you can. Of course, with little real-world experience, you won’t have much bargaining power, but you can do your best to increase your income from the start.

4. Live below your means

Maybe you landed a fancy, high-paying job right out of college. If so, good for you! However, there is a danger in this – it can encourage you to live way beyond your means.

One of the most important ways to start building wealth in your twenties is to make sure you’re saving and even investing money. Nearly 80% of Americans live paycheck to paycheck.

Do not choose this path. One way to avoid this is to follow the 50-20-30 rule. The 50-20-30 rule states that you must allocate your expenses as follows:

  • 50% of your take home pay on needs such as housing, utilities and essential groceries
  • 20% of your take home pay on cravings such as entertainment, dining out or a luxury wardrobe
  • 30% of your net salary on savings and investment

Religiously adhering to the 50-20-30 rule will ensure that you start saving a good amount of money in your twenties. This will help you build an emergency fund, pay off any debt, and start investing as soon as possible.

We live in a consumer culture. In general, you will be tempted to spend a lot more than you really should. Ignore all the noise and stick to your wealth building plan.

5. Avoid debt as much as possible

Debt is bad. Sure, some debt is considered “good debt,” like mortgages or student loans, but every dollar you borrow is money you won’t have later, eating away at your savings.

Credit card debt is the worst debt. With interest rates averaging 18.61%, that money will eat away at your future wealth at an alarming rate.

But despite that, you should probably still have a credit card. This is because credit cards help you build a credit history. This is crucial for getting good rates on important things like mortgages and car loans in the future.

You can put some money on your credit card each month as long as you repay in full at the end of the month. This way, you will build your credit history without incurring interest charges.

If you have debt, including student loans, be sure to start paying them off as soon as possible. In general, you can use the snowball method of paying off your smallest balance first or just start with the loan with the highest interest rate to do so.

Final Thoughts on Building Wealth in Your 20s

The good news is that building wealth in your twenties isn’t rocket science. You just need to commit to doing it despite many temptations not to.

A smart way to complete your financial education is to subscribe to the U investment e-letter, which is completely free. Subscribe using the sign up box below to get money and finance advice straight to your inbox.

If you start building wealth in your twenties, the sky is the limit for your future wealth. Getting a head start now will ensure a healthy financial future. And you may even be on the path to total financial freedom.

Read next: 5 Steps to Building Wealth in Your 30s