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How do I make money at a young age?
How, do I make a million dollars? At a young age to financially provide myself for when I’m older.
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11 answers
Updated
Alvarez’s Answer
Bear with me. First there is the obvious, which is get a job. Second, setup three separate bank accounts: checking (spending account), savings (online high interest savings accounts like Lending Club) and an investment account (that can also be a checking account that is linked to a brokerage account like Charles Schwab or Fidelity or STASH). So, with the money you earn for your job, put 50 cents of every dollar you make into your spending account. Put the other 50 cents into a high interest savings account until you have saved 3 months of expenses (Emergency Fund). Once you have saved 3 months of expenses for your emergency fund then, only put 15 cents of every dollar you make into the savings account/Emergency Fund until you get 12 months of expenses. The other 35 cents will then be put into your investment account.
Emergency fund: figure out how much money you need to have for an Emergency Fund. An emergency fund is by far the most important part of your financial journey/stability. If you are living with your parents now, look online or in the newspaper and get an idea of what a one bedroom or studio apartment costs per month, assume $100 per month for utilities, assume $75 per month for internet, assume $400 per month grocery expenses, car payment if you have one or bus/subway monthly expenses, laundry expenses, health insurance, car insurance, etc. Add all that put to get an idea of what your monthly expenses are (including eating out/movies, gym fees, whatever). You'll have an idea of your monthly expenses. Multiply that times 3, times 6, times 12....hence, 3 months of monthly expenses is the minimum you want for an emergency fund and 12 months of expenses is exceptional.
While you are saving money in your emergency fund, google "how to invest", "how to invest when you are young to be a millionaire", "what is an index fund", "what is an ETF", etc. There are plenty of youtube videos that can help you with financial education. Hence, once you've gotten your 3 months of expenses saved in your Emergency Fund and starting to put money in your investment (checking account #2), you can start investing with knowledge. Another great source on youtube is Jaspreet Singh. He gives very solid practical advice on your journey.
Very important, ask yourself what your rich life looks like to you? Is it fancy cars, expensive apartment, expensive dinners and clothes? Is it the ability to travel, buy a home, start a business, etc.? What is being rich to you? Not what you see other people doing but what is important to you?
Emergency fund: figure out how much money you need to have for an Emergency Fund. An emergency fund is by far the most important part of your financial journey/stability. If you are living with your parents now, look online or in the newspaper and get an idea of what a one bedroom or studio apartment costs per month, assume $100 per month for utilities, assume $75 per month for internet, assume $400 per month grocery expenses, car payment if you have one or bus/subway monthly expenses, laundry expenses, health insurance, car insurance, etc. Add all that put to get an idea of what your monthly expenses are (including eating out/movies, gym fees, whatever). You'll have an idea of your monthly expenses. Multiply that times 3, times 6, times 12....hence, 3 months of monthly expenses is the minimum you want for an emergency fund and 12 months of expenses is exceptional.
While you are saving money in your emergency fund, google "how to invest", "how to invest when you are young to be a millionaire", "what is an index fund", "what is an ETF", etc. There are plenty of youtube videos that can help you with financial education. Hence, once you've gotten your 3 months of expenses saved in your Emergency Fund and starting to put money in your investment (checking account #2), you can start investing with knowledge. Another great source on youtube is Jaspreet Singh. He gives very solid practical advice on your journey.
Very important, ask yourself what your rich life looks like to you? Is it fancy cars, expensive apartment, expensive dinners and clothes? Is it the ability to travel, buy a home, start a business, etc.? What is being rich to you? Not what you see other people doing but what is important to you?
I am really grateful you took the time to answer this question.
Daniel
Updated
Suzan’s Answer
Hey there! It's great to see that you're thinking about your financial future at such a young age. Making money as a teenager can be a fun and rewarding experience. Here are a few ideas to get you started:
Part-time jobs: Look for opportunities in your local community, such as babysitting, pet sitting, lawn mowing, or working at a local store or restaurant. These jobs can help you earn some extra cash and gain valuable work experience.
Online gigs: Consider exploring online platforms that offer freelance work for teens, such as tutoring, graphic design, writing, or social media management. These platforms can help you showcase your skills and earn money from the comfort of your own home.
Start a small business: If you have a passion or a talent, why not turn it into a small business? Whether it's selling handmade crafts, offering tutoring services, or starting a small online store, entrepreneurship can be a great way to earn money and learn valuable business skills.
Now, when it comes to financially providing for yourself in the future, it's important to start building good money habits early on. Here are a few tips:
Save and budget: Make it a habit to save a portion of your earnings regularly. Creating a budget can help you track your expenses and ensure you're saving enough for your future needs.
Invest wisely: As you grow older, consider learning about investing and explore options like stocks, mutual funds, or real estate. However, it's important to do thorough research and seek advice from professionals before making any investment decisions.
Education and career planning: Focus on your education and explore career paths that align with your interests and goals. Higher education or vocational training can open doors to better job opportunities and higher earning potential in the future.
Remember, it's never too early to start thinking about your financial future. By taking small steps now, you'll be setting yourself up for success later on. Good luck!
Part-time jobs: Look for opportunities in your local community, such as babysitting, pet sitting, lawn mowing, or working at a local store or restaurant. These jobs can help you earn some extra cash and gain valuable work experience.
Online gigs: Consider exploring online platforms that offer freelance work for teens, such as tutoring, graphic design, writing, or social media management. These platforms can help you showcase your skills and earn money from the comfort of your own home.
Start a small business: If you have a passion or a talent, why not turn it into a small business? Whether it's selling handmade crafts, offering tutoring services, or starting a small online store, entrepreneurship can be a great way to earn money and learn valuable business skills.
Now, when it comes to financially providing for yourself in the future, it's important to start building good money habits early on. Here are a few tips:
Save and budget: Make it a habit to save a portion of your earnings regularly. Creating a budget can help you track your expenses and ensure you're saving enough for your future needs.
Invest wisely: As you grow older, consider learning about investing and explore options like stocks, mutual funds, or real estate. However, it's important to do thorough research and seek advice from professionals before making any investment decisions.
Education and career planning: Focus on your education and explore career paths that align with your interests and goals. Higher education or vocational training can open doors to better job opportunities and higher earning potential in the future.
Remember, it's never too early to start thinking about your financial future. By taking small steps now, you'll be setting yourself up for success later on. Good luck!
Updated
Michael’s Answer
As a former financial advisor, Alvarez's Answer is spot on. If you are young and are starting to save, building wealth will be the outcome of your actions. Starting early is the key. Even saving a small amount consistently will get you part way there with the help of compound interest & investment growth over time. Please take account of risk and diversify. I like the recommendation of index funds that track broad markets like the S&P 500. ETF are attractive, as most have low expenses and are tax efficient. If your career grows year over year, Alvarez's formula should yield you well over a million dollars in retirement if you start savings in your 20's. As motivation, you can map this out starting at age 20, 30, 40, and 50. Once you see the end results, you will understand why saving early makes sense.
Updated
Jody’s Answer
Hello Khemani,
There are multiple ways to earn income. The most common way is by trading time for money and providing services. At a young age the pay rate may be very low. I started working as farm labor for less money than the other students made working at a grocery store but I learned how to drive commercial trucks and tractors and I loved my job. I used that farm experience as a stepping stone into Industrial Construction which paid very well. Another way is buy selling products, SALES, is a very lucrative way to make money if you have products that are in very high demand. Some lucrative products may be i-phones, laptop computers, and automobiles. Sales people can make a very good living selling products that are in high demand. If you want to become a good salesman I recommend you learn how to be a public speaker. There is a non-profit organization for students and for adults called Toastmasters International, https://www.toastmasters.org/. I was a member of this club and lost my fear of public speaking. You are already working towards your own success by seeking answers at a young age. You will be successful Khemani , work hard to find your success and you will help others as well along the way. I recommend you learn how to get out of your comfort zone and keep growing as you get older. Cheers !!
There are multiple ways to earn income. The most common way is by trading time for money and providing services. At a young age the pay rate may be very low. I started working as farm labor for less money than the other students made working at a grocery store but I learned how to drive commercial trucks and tractors and I loved my job. I used that farm experience as a stepping stone into Industrial Construction which paid very well. Another way is buy selling products, SALES, is a very lucrative way to make money if you have products that are in very high demand. Some lucrative products may be i-phones, laptop computers, and automobiles. Sales people can make a very good living selling products that are in high demand. If you want to become a good salesman I recommend you learn how to be a public speaker. There is a non-profit organization for students and for adults called Toastmasters International, https://www.toastmasters.org/. I was a member of this club and lost my fear of public speaking. You are already working towards your own success by seeking answers at a young age. You will be successful Khemani , work hard to find your success and you will help others as well along the way. I recommend you learn how to get out of your comfort zone and keep growing as you get older. Cheers !!
Updated
Violaine’s Answer
Hello! First things first, secure that job! After you do, don't forget to establish a 401k or a comparable plan if your company provides it. Trust me, your future self will be grateful. I wish I had started earlier. And here's another piece of advice: don't just focus on the salary. Consider all the benefits that come with the job. Wishing you all the best in your journey!
Updated
Derek’s Answer
The equation to accumulating a million dollars before the age of 40 has a number of steps, but it isn't a complex equation.
First, try your best to do the following things in order. The more out of order these things transpire, the less likely you are to attain upper class wealth, generally speaking (not always, but generally speaking):
1. Go to school
2. Get a job
3. Get married
4. Have children
Now, regarding school: "Go to school" doesn't always mean college. College isn't for everyone, and a vast majority of college majors are a waste of money. If you go to college or are already in college, study a major that has a return on investment (ROI). Simple google searches can help you find out what those majors are, I will not list the ones that have low ROI in efforts to not offend those that studied in those fields.
Other key items to think about, which will allow you to save money that others don't and accumulate wealth:
1. Don't buy pets you can't comfortably afford to feed. Being a "dog Mom" if you can barely pay your rent is non-sensical. Average cost of taking care of a dog or cat these days is a few grand a year....it adds up.
2. Don't buy a car that costs more than $25,000. Your car payments should not be over $500 / month. Do not be afraid to buy a reliable used car (Honda, Toyota, etc.). Cars are a common wealth sucker.
3. Settle for reasonably good living conditions. Don't rent a luxury apartment for $2,500 + a month. It's ridiculous. You don't need in-unit washer/dryer, you don't need central A/C. A wall unit and a nearby laundromat will do just fine :)
4. When interest rates are high, put any money you know you don't want to touch in a CD. Right now you can get 4% + annual risk-free return. Sometimes higher.
5. When you attain gainful employment, get a 401(k) and make the highest elections possible that still allow you to live comfortably.
6. If you can, ALWAYS pay your credit card bills in full, never pay late, never pay the "minimum" amount or partial amounts.
Now, if after applying the above advice for a few years you find yourself with some extra cash on hand, toss some of it into some well-indexed mutual funds. Chase has a very easy to use, user-friendly banking app. Happens to be my favorite. I'm not an investment advisor so take this as a grain of salt, but these happen to be pretty solid no or low-load mutual funds in my own experience: SWPPX, VASGX, VGHCX, VBIAX, PRSCX.
One last thing: If you are lucky enough to have great parents, and they are willing to keep you around for a bit after college....move back home and get a job near your family. Live at home with Mom and Dad for a few more years if your parents can handle it. You have no idea how much money you'll accumulate if you can avoid rent payments (or pay low rent) for even 2 or 3 years. Also....when you have kids, if you live close to your parents....you get some free babysitters here and there (HUGE perk). :)
There's a lot more, but I thought I'd stick to some easy pointers that have all did wonders for me in my 20s.
First, try your best to do the following things in order. The more out of order these things transpire, the less likely you are to attain upper class wealth, generally speaking (not always, but generally speaking):
1. Go to school
2. Get a job
3. Get married
4. Have children
Now, regarding school: "Go to school" doesn't always mean college. College isn't for everyone, and a vast majority of college majors are a waste of money. If you go to college or are already in college, study a major that has a return on investment (ROI). Simple google searches can help you find out what those majors are, I will not list the ones that have low ROI in efforts to not offend those that studied in those fields.
Other key items to think about, which will allow you to save money that others don't and accumulate wealth:
1. Don't buy pets you can't comfortably afford to feed. Being a "dog Mom" if you can barely pay your rent is non-sensical. Average cost of taking care of a dog or cat these days is a few grand a year....it adds up.
2. Don't buy a car that costs more than $25,000. Your car payments should not be over $500 / month. Do not be afraid to buy a reliable used car (Honda, Toyota, etc.). Cars are a common wealth sucker.
3. Settle for reasonably good living conditions. Don't rent a luxury apartment for $2,500 + a month. It's ridiculous. You don't need in-unit washer/dryer, you don't need central A/C. A wall unit and a nearby laundromat will do just fine :)
4. When interest rates are high, put any money you know you don't want to touch in a CD. Right now you can get 4% + annual risk-free return. Sometimes higher.
5. When you attain gainful employment, get a 401(k) and make the highest elections possible that still allow you to live comfortably.
6. If you can, ALWAYS pay your credit card bills in full, never pay late, never pay the "minimum" amount or partial amounts.
Now, if after applying the above advice for a few years you find yourself with some extra cash on hand, toss some of it into some well-indexed mutual funds. Chase has a very easy to use, user-friendly banking app. Happens to be my favorite. I'm not an investment advisor so take this as a grain of salt, but these happen to be pretty solid no or low-load mutual funds in my own experience: SWPPX, VASGX, VGHCX, VBIAX, PRSCX.
One last thing: If you are lucky enough to have great parents, and they are willing to keep you around for a bit after college....move back home and get a job near your family. Live at home with Mom and Dad for a few more years if your parents can handle it. You have no idea how much money you'll accumulate if you can avoid rent payments (or pay low rent) for even 2 or 3 years. Also....when you have kids, if you live close to your parents....you get some free babysitters here and there (HUGE perk). :)
There's a lot more, but I thought I'd stick to some easy pointers that have all did wonders for me in my 20s.
Updated
PwC’s Answer
Get a part time job while young and allocate a percentage of that into a savings account where it is harder to access than a checking account. Get out into the world and create value for people in any way you deem suitable and start selling some sort of service.
Updated
Sarah’s Answer
Word like “young” and “older”could mean anything! Look at the Department of Labor’s website, which tells you the expected growth and salaries of all careers. I would suggest an area that interests you vs. one that is merely a money-maker. Would you rather have to work 15 years doing something you hate, or work 25 or 30 years doing something you like. Earning a million is easy. Saving a million is a different matter. Lifestyle choices, like marriage, kids, saving and spending habits, cost of living, and real estate situations will affect your ability to accrue wealth. This part is not career advice, but if you take care of your health (physical, mental, dental) you’ll be in a better position to save, enjoy vacations, and be healthy enough when you are “older”.
Volunteer in an area of interest to you, and meet actual professionals.
Clarify your goals in terms of actual years. It’s OK if they change in the future.
Get a grasp of what your abilities are. Try things you are afraid of.
Sarah recommends the following next steps:
Updated
Trevor’s Answer
Start with any job you can get at a young age! Retail is always a good option.
Updated
Kasey’s Answer
Hello! Persist with your education and actively pursue your passions, whatever they may be. I firmly believe that when you follow your heart, financial success will eventually follow. If there's a particular field that sparks your interest, take the initiative to connect with professionals within that industry. Seek out volunteering or internship opportunities to gain practical experience and never hesitate to ask questions! I also strongly recommend exploring investment opportunities as early as possible. If your employer offers a 401k plan or other retirement benefits, make sure to utilize them to the fullest.
Updated
Keyston’s Answer
Exploring potential career paths involves discovering what excites you and aligns with your strengths, even if college isn't in the picture. In my journey, I found my calling later on, becoming a facility maintenance supervisor, supporting my wife's business. Making money at a young age requires creativity – consider starting a small business, learning valuable skills, or embracing opportunities others might overlook. While aiming for a million dollars is ambitious, focus on building a solid foundation through hard work, dedication, and making wise financial choices. Remember, success takes time and effort, but it's about the journey as much as the destination.