We Want Guac | Financial Independence for Gen Z
Episode 268
Episode Guide
Episode Timestamps
ChooseFI Podcast Episode Show Notes
Episode Title: Optimizing Your Twenties for Financial Success
Episode Summary:
This episode features Amy, who achieved a net worth of $150,000 by age 26, despite starting her career earning only $30,000. She shares her journey from fear and financial insecurity to a place of confidence and wealth creation. With dual degrees in communications and international relations, Amy overcame job search challenges, tripled her salary to $93,000, and emphasizes the importance of networking, skill building, and effective financial management.
Key Topics Discussed:
-
** Podcast Intro:
Introduction to the podcast and the theme of financial independence. -
Amy's Financial Journey:
Amy’s path from graduation without job offers to becoming a successful financial blogger. -
The Disconnect of Education and Income:
Discussed the realities of higher education and job market challenges. -
Job Market Realities:
Amy shares her initial job experience earning $15/hour through a temp agency. -
Networking and Job Applications:
The importance of leveraging LinkedIn and networking to increase job offers and salaries. -
Building a Skill Stack:
How to identify marketable skills that enhance employability. -
Budgeting Insights:
Amy discusses how budgeting can be a tool for financial freedom, not just restriction. -
Final Thoughts:
Recap of actionable insights and encouragement to optimize financial strategies.
Timestamps & Key Insights
- "Graduated without job offers, but landed on my feet."
- "That year? My year of fear."
- "Earning more is great, but managing spending is crucial."
- "Discipline leads to freedom in financial choices."
- "Your early twenties: a path to wealth."
Actionable Takeaways
- Leverage LinkedIn for networking and job opportunities - .
- Create a flexible budget that allows room for enjoyable spending - .
- Focus on building a diverse skill set that meets market demands - .
Discussion Questions
- What financial strategies can help in optimizing personal finances during your twenties? - .
- How can networking advance your career prospects? - .
- What mindset shifts are necessary for achieving financial independence? - .
Related Resources
- Blog: WeWantGuac.com - A blog dedicated to financial independence and wealth-building strategies.
Speaker Highlights
- Brad Barrett: Co-host and financial independence advocate.
- Amy: Guest who achieved a net worth of $150,000 by age 26.
Conclusion
** Podcast Extro:
"You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time."
Optimize Your Twenties for Financial Independence
Understand the Importance of Financial Independence
Financial independence (FI) is not just a distant dream; it's a state of having enough personal wealth to live without having to work actively for basic necessities. Achieving FI often starts in your twenties when the financial foundations of your future are being built. The earlier you begin to optimize your finances, the better prepared you will be for a secure financial future.
Build a Strong Financial Foundation
Create a Flexible Budget
Budgeting is essential for financial health, especially for young adults just starting their careers. Rather than viewing a budget as a restrictive tool, consider it as a freedom tool—a way to control your finances while allowing room for enjoyable spending. A flexible budget can enable you to enjoy life while still saving for the future.
Action Item: Draft a budget that includes necessities, savings, and discretionary spending. Make sure it is flexible enough to adapt to changes in your income and expenses.
Focus on Savings Over Spending
While it’s true that earning more is beneficial, understanding how much you spend is crucial. Many young professionals mistakenly believe that simply increasing their income will solve all financial problems. In reality, without proper spending management, increased earnings may lead to increased spending—a phenomenon often referred to as "lifestyle inflation."
Quote: "Earning more is great, but managing spending is crucial."
Career Development: Increasing Your Income
Leverage Networking
Networking is a powerful tool for career advancement that is often overlooked in traditional education. Rather than simply applying for jobs through platforms like LinkedIn or Indeed, flip the script. Focus on how to make recruiters and potential employers come to you. Building connections and reaching out to individuals in your desired field can lead to higher-paying opportunities.
Action Item: Identify and reach out to professionals within your desired industry. Attend networking events, join relevant online groups, and connect with people on LinkedIn.
Market Yourself Effectively
To stand out in a crowded job market, you need to market yourself in a way that highlights your unique skills and experiences. This includes tailoring your resume and LinkedIn profile to reflect the language and requirements of the jobs you’re aiming for.
Key Steps:
- Identify your desired job roles and research associated job descriptions.
- Note the key language, skills, and qualifications that employers are seeking.
- Incorporate this language into your resume and LinkedIn profile to improve visibility.
The Importance of Skills Development
Build Your Skill Stack
Developing a diverse range of marketable skills enhances your employability and can lead to higher salaries. Identify the skills that are in demand within your industry and actively work on acquiring them. For instance, combining a marketing background with technical skills like HTML can make you more appealing to employers.
Action Item: Identify at least one skill that is relevant to your career aspirations and find resources to learn or improve that skill.
Embrace the Growth Mindset
Young professionals should adopt a growth mindset, believing that they can develop their skills over time with effort. This mindset is essential for overcoming challenges and achieving career goals. Understand that mistakes and setbacks are opportunities for learning rather than failures.
Cultivate a Positive Money Mindset
Shift from Scarcity to Abundance
Experiencing financial fear can lead to a scarcity mindset, where every dollar feels under threat. However, transitioning to an abundance mindset allows you to realize that managing finances can lead to greater security and freedom.
Quote: "Discipline leads to freedom in financial choices."
Establishing a positive relationship with money can enable you to spend on experiences and social activities without guilt, while still saving and investing for the future.
Find Security in Your Financial Goals
Achieving a net worth goal can provide a sense of security during turbulent times. Setting realistic financial targets—such as reaching a net worth of $100,000 by your late twenties—can empower you and serve as a strong foundation for future wealth-building efforts.
Take Action Now
Define Your Financial Goals
Understanding how to set and achieve financial goals is essential for building a secure financial future. Whether it's increasing your savings, optimizing your income through career moves, or investing wisely, having clear goals can guide your actions.
- Set a clear savings target for each year.
- Invest in your education and personal development.
- Reevaluate your financial situation regularly to stay on track.
Connect with the Community
Engaging with a community that understands financial independence can provide insights, support, and accountability. Consider joining forums, following financial blogs, and participating in discussions related to FI.
Resource: Explore websites and blogs geared towards financial literacy and independence, such as WeWantGuac.com for further inspiration and actionable tips.
Conclusion: Your Financial Future Awaits
The journey toward financial independence is shaped significantly by the decisions and actions you take in your twenties. By cultivating a strong financial foundation, developing your career skills, and embracing a growth mindset, you will place yourself in a position of strength for years to come. Start implementing these strategies today, and you will pave the way toward achieving your financial goals and securing a prosperous future.
Amy a.k.a Darcy from We Want Guac
Website: We Want Guac
Twitter: @wewantguac
Instagram: wewantguac_blog
Email: [email protected]
What You'll Get Out Of Today's Show
Optimize your finances during your 20s, no matter what your income is, and build significant wealth. But what are your options when working an entry-level job when you have a large amount of student loan debt?
Amy's first job out of college was an entry-level position earning $30,000. By the age of 25 had a $100,000 net worth and has tripled her salary in the last few years by learning how to market herself.
The average cost of a four-year college degree in 2019 is $122,000. Amy was fortunate to receive enough scholarships, work earnings, and help from her parents to pay for college graduated with degrees in Communications and International Relations without any student loan debt.
She graduated without any job offers and her only source of income came from waitressing which wasn't enough to live in Boston on. After a couple of months, she contacted a temp agency and got a job earning $15 an hour.
Nearing the end of college, she saw that recent graduates weren't getting the jobs they had hoped to get. She calls that time her "Year of Fear" because she didn't have much in savings and terrified of what was going to happen. For the rest of the year, she continued to work full time at her temp job and waitressing on the weekends.
With the benefit of hindsight, she realizes she has an average amount of skills as anyone else coming out of college, which is inadequate for the realities of today.
The ultimate goal of going to college is to graduate and get a well-paying job. But the focus is on grades and prerequisites, not how to find mentors, write a resume that resonates with people, or navigate the application process to get the jobs you actually want. The way the job application process works now is broken
While there may not have been any skill Amy believes would have initially made landing a job easier, it would have helped to find people who agreed to meet and interview her in the first place.
After submitting resume after resume to company websites and since times out of ten hearing nothing, Amy emphasizes flipping the script and having the companies and recruiters come to you.
Amy was able to go from $30,000 to $93,000 a year by learning how to market herself on LinkedIn so that people found her.
What makes you stand out and how can you improve your chances?
The first step is to decide what it is that you want. If you are marketing to everybody, then you are marketing to nobody.
Next, start looking at the job positions and titles that you want, study the job applications for those positions, the job requirements, descriptions, and language used.
Using that verbiage in your resume or LinkedIn profile allows hiring managers to see that you are perfect for the role and HR departments who use algorithms to narrow down the prospects, which relies on keywords that your resume or profile will likely also have.
It can be difficult to figure out what you want at the age of 20. Amy chose a degree in Communications because it could apply to almost anything she wanted. Though she says to figure out what it is you want, figuring out what you want for just the next couple of years is fine. You can always pivot, but you just need a direction for your resume.
Employers don't generally look for someone well-rounded, instead, they are looking to fill a specific need. Show you can fill that need and you're more likely to be hired.
The salary increase she received for her second job out of college was pushed by the recruiter Amy was working with who found her on LinkedIn.
Amy continued to use the same tactics with her next move but added in extras that may not have been relevant, like her HTML skills. That one change opened the door with recruiters looking for marketers who also understood coding. Landing that job bumped her salary up to $86,000.
Answering the question, "What do you do?", always results in a simple answer, like Marketing, not what you actually do or what skills you possess.
When helping out a friend earlier this year with his resume, Amy noticed that the skills section of his resume didn't speak directly to his particular skill set for the jobs he wanted.
You don't have to be world-class at anything, but with the right variety of skills, you can stand out because there are fewer people who have that intersection of skills.
Earlier this year, Amy started her blog, We Want Guac, after looking at different finance blogs while trying to figure out what to do with her new and higher salary. Building the blog has continued to add to her talent stack.
Amy says that in 2016 she was the ultimate cheapskate, attending events to take advantage of the free food, and ordering small items when eating out with friends. The salary increases enabled a shift in mindset from deprivation to one of abundance.
Part of her mindset shift came out of creating a budget. Her budget didn't mean restricting herself from spending. Instead, the numbers showed her the limits could be more than she expected and it would be okay if she did spend more. It gave her permission to spend more on herself, leave more in tips, and give to charity.
Like the saying by Jocko Willink, discipline equals freedom. Amy's budget was the discipline that gave her the freedom to see her limits could be bigger and move beyond a scarcity mindset.
The goal of We Want Guac is to help people better understand how to manage their money.
When doing the math, Amy calculated that a 25-year-old with $65,000 invested in an index fund can retire with $1,000,000 at the age of 65 without ever investing another penny. With a net worth of $100,000, she figured she could retire at 50, and if she continued to save, she could retire in her 40s or even her 30s.
Amys says having $100,000 saved in your 20s makes an incredible difference. It is five figures of investment growth during bull markets and it is security in downturns.
