Landing your first job is an exciting milestone when you are a teenager, you start earning your own money while your responsibilities are close to zero financially speaking, you still live with your parents, who provide you with a roof, food, clothing and even whims.
So you think that all that money that you are going to start generating with your new job, you can spend it on your personal things, material things that maybe your parents have not wanted to buy you, or maybe you think that you are finally going to be able to go to the movies with your friends without skimping on expenses, or buy that pc or video game console that just came out, and let me tell you that’s fine, it’s your money, you earned it, you’re finally enjoying a little financial freedom.
But I want you to think, how long will that last, how long will that exciting taste of power and freedom that that extra money that you begin to generate offer you? If you answered “until the money runs out” you are correct and that is what this post is about, to make you see that money runs out, it is not infinite, and therefore to get more money, you have to work more. Or…
Without a plan for your hard-earned money, chances are you’ll spend your life working to keep generating money. A correct financial plan can put your money to work hard for you to create more money.
Please don’t waste your time buying things that will end up in the trash, maybe not soon, but in a few years.
From the start of your first job, be smart with your money, develop good management habits with your income, that can make you very rich for years to come. Start accumulating wealth from the first salary.
When you get your first job as a teenager, everyone talks about how good and important it is for you to gain experience and learning from the world of work, but no one talks about the experience and learning you should get in managing your finances, it’s important to remember that with this new income comes a great responsibility, not only work responsibility, but responsibility with yourself, this is the best stage to learn about how to manage your finances to create wealth and ensure a better future.
At this stage it is recommended that you learn and understand how to prepare a budget, track your expenses, create savings and investment habits, create an emergency fund for the first time and why not, also give a little to those less fortunate. With the right money management habits, you can build wealth and set yourself up for a successful future.
Teenagers, starting to accumulate wealth from your first job is more important than you think, and believe it or not, most adults today say that they would have liked to start accumulating wealth when they were teenagers, since now as adults , they would have enough money to not worry about debts or expenses.
Some of the reasons why you should start a plan to create wealth from your first job as a teenager, I will leave them below.
1. You get into the habit of saving
As teens begin to earn their own money, it can be tempting to spend it right away—they’ll probably spend it before they get their check. Establishing the habit of saving can help teens get into the habit of making smart financial decisions.
2. You start investing early
The sooner teenagers start investing, the more time their money will have to work for them. In the world of investments there is a saying that “the best time to invest was yesterday”, because a teenager basically finds himself in yesterday. your future, so start investing as soon as possible, investing early as a teenager can lead you to a path where you count millions of dollars, when you are still young enough to enjoy it.
3. You avoid debts
The largest percentage of the population struggles every day with debts with very high interest. But if you start a good financial plan as a teenager, this will not be your case, because when the time comes to buy a car or buy a house, you will have enough money to pay for these things in cash, or get a smaller loan with interest. Below average.
Debt can be a huge financial burden over a long period of time in your life. When you save and invest your money and avoid debt, teens can ensure that they have more money available in the future to save and invest.
4. You establish an emergency fund
Because of your teenage age, you may not know that as you enter adulthood in the near future, you are responsible for a million things, and those responsibilities lead to spending, yes, spending money and sometimes some you weren’t even expecting. , such as accidents for example, which causes you to incur expenses that are not in the budget, having an emergency fund can help you be prepared for any financial emergency, and this is only achieved by putting aside a little of your current income when they come in every month
5. You secure your retirement
Teenagers may not consider retirement as a priority, especially their first job, but if you start saving for retirement as early as when you are a teenager, you could be one of the FAT FIRE of the future, because you will take advantage of compound interest. and save an incredibly substantial amount of money for when you retire.
6. Gain financial independence
Starting to build wealth when they get their first job can help teens gain financial independence by giving them the security of having money saved for their future. It’s never too early to start planning for the future, and having a financial plan can help teens achieve their long-term goals.
7. Possibility of acquiring properties
That’s right, having a wealth accumulation plan, when you are a teenager, gives you the opportunity, sooner than you think, to start acquiring properties. Stories of teens owning 2-3 real estate rentals, even though they live with their parents, are not a myth, there are plenty of teens out there who are being smart with their money and putting it to work for them.
Reach $1 Million by age 30
As we’ve seen before, investing wisely is one of the most powerful financial tools teens can use to achieve their goals and dreams. For example, if a teenager starts investing her first paycheck from her first job, she could reach $1 million by age 30.
The amount of money a teen needs to invest to reach the $1 million goal depends on the rate of return and the timing of the investments. Generally, the younger the person is when they start investing, the more time they have to achieve the goal. This means that the longer the investment period, the smaller the amount of money that needs to be invested to reach the goal.
For a teen to set her goal of becoming a millionaire by age 30, she needs to start investing as soon as possible. The best way to do this is to start small and increase your investment amount as your income increases.
For example, a teenager who starts out earning a minimum wage of $7.25 per hour, could invest 40% per month or $2880 per year, and as her income increases, her contribution increases. If the teen invests her money wisely in an index fund or mutual fund with a rate of return of at least 10% per year, she could reach the goal of $1 million by age 30. To maximize her investment potential, she should also take advantage of tax-advantaged accounts, such as a 401(k) or IRA. These accounts are designed to help people save for retirement, but can also be used to help reach the goal of becoming a millionaire by age 30.
By investing your money wisely and taking advantage of tax-advantaged accounts, such as long-term investment accounts, a teen can reach their goal of $1 million before their 30th birthday. Investing early and often is the best way to achieve this goal, and for a teenager, the earlier you start investing, the better your chances of having a million dollars by the time you turn 30.
