Advice I would give my 25-year-old self

July 22, 2011

Dan Greenshields, CFA, is President of ING DIRECT Investing, a subsidiary of ING Bank, fsb. The opinions expressed are his own.

There’s nothing quite like being 25. By that age, for most, school and exams are permanently in the rearview mirror, work is novel and a steady paycheck not only brings financial independence from Mom and Dad, but also is yours to spend as you like.

Not that it’s all easy. This year’s college graduates are entering the professional world with an average of $22,900 in student loans. If they’ve racked up credit card debt and need a car loan, the final figure can easily overwhelm even a generous first salary.

Though there are some aspects of my 25-year-old life that make me nostalgic, for the most part, I’m just grateful for what I’ve learned between then and now. Obviously, I can’t go back in time and course-correct my own missteps.  But I can share with today’s 20-somethings the pieces of advice I wish I had received when I was their age.

Build relationships
Let’s start with people. Even if you’re not a person whose goal is to network your way to the top, making the right impression is always in your best interest.

No two relationships are the same. It sounds basic, and it is, but you’d be surprised how often people forget it. Patience, self-awareness and decisiveness are the keys to making and maintaining long-lasting relationships.

On the personal side, finding the right partner is not just emotionally enjoyable, it brings practical advantages, too. There are tax benefits, insurance benefits and, for two-income homes, cash flow benefits. The old adage that two can live as cheaply as one may not be 100 percent true, but partnership definitely brings down the average cost.

These partnerships, however, are never easy and shouldn’t be entered into lightly — or too young. Love has no schedule, but I wholeheartedly encourage young people to wait until they are in a financially strong, independent position before agreeing to any kind of legal partnership.

Manage your time
According to a recent survey, the average employee procrastinates more than two hours out of every eight-hour work day. That amounts to an entire work week every month, or 60 days a year, when the majority of people are mindlessly surfing the Internet or updating their social networking sites instead of focusing on their jobs. Be the person who excels and impresses, and that hard work will stand out — and ultimately result in both titular and monetary rewards.

Then there’s getting to work. A recent study revealed that when one or both partners endured a grueling daily work commute, that couple was 40 percent more likely to divorce.  If you’re in a city, pick an apartment near the subway or bus stop you need. If you’re in a suburban or small town, factor into your final housing decision how convenient that morning and evening drive to and from the office will be. And if you can’t avoid an extended commute — the job 90 minutes away pays too well, for example — use your time wisely: work on the bus, listen to audio books in the car, etc.

Prioritize equity
The average age for a first-time homeowner is somewhere between 33 and 35, depending on where you live. At 25, you’re probably not actively thinking about buying a home just yet. You probably also barely think about retirement and don’t really delve into the specifics of your health insurance plan. But you should be doing all of these — and you really should be saving as much as your salary and debt-load will allow, while also contributing as much as possible to your 401(k).

Your 20s are the time, before you start a family, when you can really afford to save — or better yet, invest — a larger percentage of your income. The earlier you start, the longer that nest-egg will have to grow and help you build the post-work life you want.

Find your passion early
The happiest people are those whose jobs don’t feel like work. What they do every day is truly what they love. Not everybody is so fortunate to be in this position, but the great thing about being a young person is that you have time to explore. The sooner you discover the intersection of what you love and what you’re best at, the sooner you can rise in that field.

And even more important, the happier and more productive a person, a partner, an employee, and a manager you’ll be.

One comment

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Thanks. Great advice. I would ADD.

Start the 10 percent solution early. AGE 25. Take 10 percent of you income and put it away for the future. Investing in stocks, real estate, small business or even yourself (improve you own skills and become more valuable).

Posted by jimfrancis | Report as abusive