Money in Your Twenties, What Would You Do Differently?

This week I had an inquiry from Jackie, asking what I did successfully in my 20’s and if I could go back in time, what would I do differently – saying:

“Your 20s are typically the perfect time to start planning for retirement, but sometimes life gets in the way.

What did you do successfully in your 20s, or if you could go back in time, is there anything you would have done differently to ensure a better financial future sooner in life?

In a post on Family Money Values, I would love to hear your thoughts on how you could have built your financial safety net in your 20s better–and how you can start it now if you haven’t already. What would be your ideal retire at 65 plan?”

In answer to that, I’m going to repeat part of the story I told in my book Choose Wealth! Be a millionaire by midlife. In Chapter 4, I talk about my journey to becoming a millionaire, particularly some of the mistakes I made in my youth.

What I actually did in my youth.

I became a millionaire in my early fifties. It still kind of amazes me.

Here is how I got there.

The early years.

My birth family didn’t have money while I was growing up. Mom and Dad started poor – Dad the son of farmers and Mom the daughter of an immigrant.

I grew up in a lower socioeconomic neighborhood. Not a bad one, just not middle class. When I was little, we used a coal stove to heat, had no indoor plumbing and lived in a 4 room house.

As a child I sort of bumbled along, trying to please everyone. Shy as a kitten, I hardly felt I had the right to take up space in the school hallway.

There weren’t any formal money lessons at home or at school. Mom and Dad were savers and I watched their example, but they let me make my own mistakes – and I did!

I got 25 cents a week allowance for helping around the house, and spent most of it each week. The one thing for which I remember saving was my first two-wheeler. It was a green, no gear, girls bike with balloon tires, a basket on the front and fenders. It was $10. That would have been 40 weeks worth of allowance if I had saved it all (and I did give part to church). So I tried selling plums from our backyard tree and Christmas cards door to door and doing odd jobs for the relatives.

Eventually I had the money to buy that used bike. I still remember the feel of the wind on my face as I flew downhill on it; the sound of the pedals as they bumped slightly against the bike body and the scritch of the tires on the gravel road as I banked into a turn. Fun times!

I was clueless as to the existence of another kind of world. All my friends lived in houses just like mine and had no more money than I. We happily rode bikes in the neighborhood, and played tag, king of the hill and monopoly together.

College Daze.

My first exposure to a more luxurious lifestyle came in college. It was state U, paid for by my parents. They saved for years, and Mom went back to school for a Masters degree in teaching, got a job and used her salary to help pay the college expenses. All I had to supply were my clothes and spending money. For those I worked summers. I was blessed to have this family support!

I was dating a boy who had joined a fraternity. Of course I decided I had to fit in, so I joined a sorority. I’m sure Mom lobbied with Dad for this. She benefited greatly from her own teachers college sorority throughout her life and no doubt thought I would be smart enough to do so as well. But as usual, I was clueless. Yes, I enjoyed the fancy sorority house we stayed in and getting to know the other girls. But shy as I was, I neglected to make firm bonds with any; didn’t visit their homes; or meet their parents; or understand what their families did. Neither did I keep in touch after graduation to provide mutual help, support and contacts as we all grew in our fields.

I also neglected to make use of my college counselor and consequently didn’t explore potential lucrative and interesting career fields. Instead, when it came time to choose a major, I just picked one I liked – without regard to whether it would provide a living or even an enjoyable job. I had no dream or vision for what I wanted from life.

I did a few things right. I studied hard and earned good grades. I also learned to lead by taking on the roles of Chief Justice of the student traffic court and Scholarship Chairman of my sorority. These helped me learn how to work with groups of people.

Just Bumbling Along.

After college, I continued to bumble through life, grabbing the first job I could find, marrying and giving birth way too young, still trying to please everyone around me, never imagining a better life.

We were pretty poor, although the only debts we had were for real estate (our starter home and 40 acres of raw land). Every year we saved what we could from his salary. I was home caring for kids and working part time weekends at a retail sales job. Every year our savings went out the door at year end for annual bills and Christmas.

The stress built. My husband was working 10 hour days and then watching the 2 babies on the weekend. I was home with the kids all day and night 5 days a week, trying to provide a loving and educational environment with no money and no help, and working weekends for peanuts. He was mad much of the time. Mad that he made so little for so much effort. Mad that his salary had been frozen for many years, with no raises given at all. Mad that we weren’t able to get ahead financially. His mood made me resentful and angry. I remember being on my hands and knees on the hard Congoleum floor, scrubbing it with a brush to get the dirt out of the dimples and thinking – this is not what Walt Disney promised me! This is not a happily ever after. There is no prince charming. I want more.

My Trigger to Act.

I wanted more. I wanted earning power, I wanted control over money and I wanted a better life.

The stress on both of us was so great that I decided we needed to divorce unless things changed, but I wanted a way to be able to provide for myself and my sons before taking that action.

Note: He and I stuck together through these tough times. They were not only tough on me, but also on him. We recently celebrated our 41st wedding anniversary and are happily going strong together.

Getting back to my story – I researched jobs that paid the most, figured out what I had to learn and do to get one of those jobs, and then made a plan. I was determined to not take a penny of what he made to get prepared for that job. I was determined to pay back every cent he had earned and used on the family up until then – after I got that job. I did it too. I actually tracked the money for a few years, but gave that up as unnecessary when I started earning more than him!

To earn money to go back to school, I decided to start a licensed day care home. To be licensed, I had to get permission from all bordering neighbors – most of whom I didn’t really know. Swallowing my shyness, I trudged to the homes next door, across the street and behind our house and begged for permission. Luckily no one objected. I got the license and advertised for kids to watch. Since I had been the head of the church’s mother’s day out program, I quickly found a baby – Jeffry – to watch full time for $40 a week. I used some of the money to hit the garage sales to get equipment to help me with the day care home and added children – up to the max I could legally watch. This was the most difficult and tiring job I’ve ever done, and I did it for 3 years. I saved up all the money I would need for books, tuition, gas money and clothing to wear so that I could go to community college to get a data processing degree.

It was hard going back to school after all that time. I did it in the evening and on the weekends, still caring for our kids during the day. I studied every chance I got. After the first year, I landed a part time job in the school’s computer lab and after 2 years I had my associates degree in data processing with straight A’s.

To make a long story short, I took the long route to financial freedom. If I had done a few things differently, I probably could have retired in my fifties instead of at 62.

What I would do differently.

Be more curious.

Everyone should try to get outside of their own neighborhood – seeking out new experiences, different socio-economic neighborhoods, other geographical and cultural areas. I stayed within my box and consequently didn’t see that there were other ways of doing things and couldn’t dream a big dream about what I wanted from life. I wish I had been a more curious and exploratory child – pushing the envelope of my environment to see more of what different parts of the world were like.

For example, my nephews, one in college, one about to enter, have found ways to provide service in foreign countries without it costing their parents an arm and a leg. One is in Nepal now (during the 2015 earthquakes) as part of a semester of overseas clinic duty. What an experience. Thank heavens he is OK.

Choose a more lucrative path of study.

Part of those explorations should include not only the college subjects in which you have interest, but the monetary rewards they might bring to you. I went to college because it was expected. I hadn’t a clue what I wanted to study or what kind of career I should enter. I graduated in 1971, during a recession. Some say it was the worst decade of most industrialized countries’ economic performance since the Great Depression. Needless to say, a Bachelor of Arts didn’t get me a job of any kind.

Wait to have babies.

I was 22 when my first was born. If we had waited to have babies, I might have pursued an active career before getting pregnant and may have advanced further than I eventually did.

Listen to Dad.

During the late seventies and early 1980’s my Dad began to learn about the stock market. Back then, it wasn’t as common for regular folks to invest, but Dad was starting to do so. He also tried to educate me using a family newsletter that he laboriously pecked out on a typewriter. Since we didn’t have much money even to save, I pretty much ignored him and his message. Big mistake. Taking time to learn about personal finances then would have been a big boost for my life and our little family.

Develop alternate and passive income flows.

Looking around now at what others have done to have more than one source of income is inspiring. Pat Flynn, for example, from the Smart Passive Income blog, was laid off from his architect job, yet now is making hundreds of thousands of dollars a year, using multiple streams of income, some of them passive.

Things I did right.

Eventually, I did seek out a well paying career field and get trained so I could enter it.

My spouse and I were both diligent savers, which kept us out of debt and eventually helped us gain enough traction to start investing.

Based on my experiences, I have drawn up a Framework for Wealth, which I detail in my book: Choose Wealth! Be a millionaire by midlife. You can use this Framework to shape your own (or your child’s) financial life.

Thanks for the great question Jackie!

What would all of you do differently if you could go back in time – to be better positioned for early retirement?