A few days ago I was speaking to our technology team about wealth creation. After all if we are in the business of helping people grow their money, so why not our own employees?
Most of the team members I spoke to are in their twenties. During the course of our conversation I realised that when people are in their twenties, they rarely have large amounts of money to invest. In fact saving itself is a challenge.
This got me thinking about my own early days. Many Scripbox team members have asked me this question:
“What did you do in your twenties that has helped you achieve financial independence?”
There were 4 specific habits I had since my early years which helped me achieve financial independence, and I would like to share them with you.
Habit #1: I budgeted
I don’t like feeling guilty and I hate taking loans, whether from friends or in the form of credit cards. As I started with a modest salary, I made sure most of my expenses were planned well in advance, including those meant for leisure and fun. I understood that spending is inevitable, but when you plan for it, at least it is guilt free.
Habit #2: I always had a financial cushion
As part of my budgeting, I also made sure that I always had a buffer. This habit made sure that I would never have nothing to invest later in my life. My friends and relatives still joke about my habit of always having a buffer when it comes to money.
A buffer for me was simply some extra cash left over after I had taken into account both expenses and savings. I never compromised over this safety net. This is why I could often afford seemingly expensive purchases as I was never compromising on my savings.
Habit #3: Although I started investing later than I should have, I always made sure to treat investments as expenses
I began to invest substantially only in my late twenties. Taking the lessons from my first two habits, I ensured that saving and investing was just another expense. It had to be catered for. Savings, for me, were never something to do with “leftover money”.
I saved first just as I paid rent or catered for fuel costs. There was nothing like “Oh, I don’t have enough money to save this month”. If you have to pay rent, you also have to “pay” for your savings.
Habit #4: I ensured jumps in my salary by continuously improving my work skills
Merely savings are never going to make you rich. You have to invest and you have to keep investing more. You can’t invest more if you don’t have money to invest.
I knew that the easiest way to make more money was to increase my salary. No one will pay you more if you bring the same skill set to the table year after year. You have to improve. I did that by upgrading my skills. This, at that time, meant an MBA, while I was working. I also took every training course my employers offered.
As I was constantly engaged in becoming better, I found better opportunities to grow. This had an obvious impact on my salary, which grew faster than if I would have simply done nothing and just hoped for an increment.