Do you always see people get asked debit or credit when buying something? Today I’m going to go over that.
Paying in cash or card doesn’t really have a difference until you get into the details of credit history, inflation, availability, and rewards. Now unfortunately minors cannot get a credit card but you can sign up to be a authorized person on your parents card.
Debit
A debit card is connected to a checking or savings account which means the money you use is your actual money. Using debit allows you not to worry about paying off debt on your credit card.
The only negative is that you are using that money now instead of buying something but getting the real money later.
Credit
Credit cards are a bit more complex as they come with terms and such. The premises is this: you are paying with a banks money and you need to pay it back or you will pay a fee if not.
An example of this is you used a credit card to buy a tv which was $1000. At the end of the month you have to use your money from either a checking account or cash/check to pay it off later. If you weren’t able to you would pay more like around 30 for the first late fee.
Using credit cards allow you to build a credit history which lets others to see if they can trust you with their money. You can get better rates if you have a better score.
As credit cards come with different things like rewards or travel points it can become a little more hard to understand. For now I’ll just leave it at that but I could go over this in the future.
Which One?
I personally think everyone should have both, but you have to be responsible and careful when using credit cards. It can be easy to just forget about your payments. The benefits of having a good credit score opens many doors that otherwise would not be available.
Just be financially responsible and you can achieve success while using these tools.
Knowing what you want in generalis hard, so how do you know what you want in your financiallife?
Whether it’s becoming a millionaire or just having money to spend on traveling, everyone has some goal. They don’t have to be big or crazy it’s actually pretty normal to have a relatively small goal. Let’s talk about what these could be.
Financial Freedom
If you don’t want to live with the stress of having to pay debt or living from paycheck to paycheck this could be for you. Freedom from the restraints of money is possible. It takes hard work upfront but is worth it in the long term.
You technically have to start by building passive income streams while living on below what you make. You save and invest and soon enough you’ll be able to make the choice to work or not.
Still Working While Enjoying Life
Do you want to not have to deal with creating too many income streams or just don’t have the passion to build your own empire? That’s okay because this could be for you. It is 100% possible to work a normal job, work less than 3 days in person, and travel while doing it.
You may have to work a little bit harder in the beginning when convincing your boss to believe you can work remotely. But afterwards you’ll be able to take vacations while not working as much and making the same amount of money.
(Disclaimer only applies to jobs with obvious ability to work remotely.)
Having Money All in a Portfolio
Investing can bring amazing returns, but you don’t have to constantly sell or if you’re just okay with holding and watching for a long time this could be for you. Saving and investing the difference are the basic steps to building wealth. When you invest, or at least when I invest I imagine my money gone because I don’t want to touch it.
If you invest a large percentage of your income into a portfolio, you could gain massive returns but sometimes it takes a few years and a lot of money. If you wait it out and invest in dividend stocks you could receive those on a somewhat consistent basis.
There is always a risk when investing because you can’t predict the market. Always think long term wealth.
Bottom Line
There are many things you can do with your money. It just depends on your goals. These are just the basics that I think and have experienced good returns. Do what would be best for you financially.
There are infinite types of lifestyles, but only a handful will change a cash flow that is negative to one that is positive.
Lifestyle is one of the many unique things about society. It ranges from saving every penny to extravagant living and everything in between. A lifestyle change doesn’t mean to turn your whole world upside down, in fact you probably can just tweak things here and there to create the change in your life.
The Power of a Lifestyle Change
Lifestyle as a teenager will be constantly changing. We experience different things and learn what works for us. We pretty much have a never changing environment. That’s not always a bad thing though, you see when everything changes, including us, we learn new skills and hobbies that we never thought of before.
Starting as a pretty average kid, I went through multiple phases of how I wanted to live and why. I got to better understand me and my goals through the process. I now know I won’t want to attend college but instead pursue a financially lucrative business in high demand. My lifestyle helped me realize my goal and it can help you too.
I started as a kid who believed money is the goal, now I know that it is only a tool I will use to get to that goal. The power of your lifestyle can dictate literally every aspect of your life. Make sure it’s doing that in a positive manner.
Lifestyles Are Personal
Someone my age with a different lifestyle may achieve the same goals I did but they had different things they did that may not work for me. Lifestyles are an intimate part of being human, we all have one even if it seems silent or nonexistent it’s there affecting every decision we make.
A lifestyle is who you are but displayed in your actions. The things you purchase, the way you live, and the habits you have. This is who you are. You don’t have to change you as a person, but changing habits, tweaking things here and there can create the ability to produce more profit.
Inhibit a New Productive Lifestyle
Create a lifestyle that benefits you, just because a lifestyle is a part of you, doesn’t mean it’s good. Make sure it matches your morals and goals and who you want to really be as a person.
A general good lifestyle would include a balance between dedicated focus and bluntness, and a relaxing while taking in life. Anything without balance falls, so make sure you have a little bit of everything to well round your habits.
Being young is hard and made harder when a unhealthy and unsustainable lifestyle is in the mix. Develop good habits so later on you can start ahead of others, and begin your journey to success without too many bumps in the road.
Summary
Start to plan how you want to live as an adult, critique your lifestyle so you will always be successful when achieving your goals. Lifestyles are so unique but certain traits and habits will make an impactful change.
Saving money could make or break your financialsituation, learn how to makesure it makes yours.
Starting any job whether it’s a W-2 or a side gig it’s exciting. Seeing a steady flow of money for the first time can produce a euphoric feeling. The first time I got a big paycheck I was so surprised at the quantity. I knew the importance of that money and so I saved it.
How Much Should You Save?
I don’t know what expenses you may have, but I assume you don’t pay for groceries or rent. This allows us as minors to set ourselves up in the future. I don’t have a set savings account as I vary my opinion on how much I should save and how much I should spend/invest.
Some people suggest saving 60% or 40% but I would say saving young and saving more than 50% can create a successful start building wealth. I have set a goal to save up at least 60% if not more of my paycheck because it works for me.
Decide what will work best for you and start there. Don’t feel like you need a fixed savings rate just stay consistent with your savings, no matter the quantity .
Benefits of Starting Early
No matter your age, you can create income. You can set yourself up for when you are legally able to buy property or some type of investment. Creating a savings of at least 10k as a safety net is personally my first goal in regards to saving. Having this net can allow me to pursue more risky possibilities without worrying if I have something to fall back on.
You also learn mistakes that could have been detrimental to your finance in the future but wasn’t because you started young. Overall saving is something that a surprisingly amount of people don’t do, but that doesn’t mean you shouldn’t.
What To Use To Start?
Opening a savings account can be a good way to get tempting money out of your checking account, and somewhere safe. You should research what would be best for you whether it’s an online bank or a normal one look and compare rates.
Never ever open an account that has an annual fee, if it has one go somewhere else. Opening an account is quite simple, but you need your parents information for them to create s custodial account.
Savings as a Whole
No matter how much, savings is one of the best things you can do as a teenager to set up your financial future. Start on a safety net, then if along the way you need a new car or something of the sort learn to save for that the same way for the safety net.
It’s an acquired skill, but an easy one. Start today to set yourself up for success.
Getting started is exciting, but what happens when you stall and don’t know where else to look? Letme help.
Finding reliable resources to learn can be extremely hard and meticulous. You find XYZ source, read good reviews and then suddenly people are trashing their information and quality. I have read and listened to many books and podcasts to see what I think distributes good information for people getting started in their financial journey.
Books
Set For Life – Scott Trench. This book absolutely changed my view on my future financial life. I suggest reading this to better understand how simple it is to be in control of your money and become successful no matter the way in which you do.
The Millionaire Next Door – Thomas J. Stanley. After reading this book I got a much better grasp on the reality of being wealthy. If you still think that you should have a mansion once you have the income to do so, read this.
Stock Market 101 – Michele Cavan. I love this book because of it’s simplicity to understand the market. It can give you a starting point when learning about investing.
How To Invest in Real Estate – Joshua Dorkin and Brandon Turner. Such a good book especially if you have no idea where to begin when researching real estate. You can learn basic topics that can help you make a complicated situation into an easy problem.
Podcasts
The Biggerpockets Money Podcast. I love this show very much as it brings on so many people who have such a variety of situations and experiences. You can learn about how to manage your money to having a 150 unit real estate portfolio.
The Biggerpockets Real Estate Podcast. Similar to the money podcast but goes in depth on strategies when investing in real estate as well as the intricate details like legality and tenant screening
What Else Besides Classic Books and Podcasts?
Talking to people you know who have experience with money and life in general. Whether that be your parents or a friend, getting insight from someone can give you a whole new perspective.
Watching documentaries and videos on how to do certain things that you have a dedicated interest in. The internet holds such a large quantity of information that you can drown in it. So when you start researching make sure you have a specific topic in mind.
Overall
Learning is a huge part of anyone’s life, but starting young can give you opportunities that others don’t have the time for. Use it and grow from it.
Starting young gives you a huge advantage, but if you don’t know how to take advantage of it then what’s the point?
I’m still learning about what I can do right now to improve my future. Looking at what I know right now, it doesn’t seem that complicated there’s just some extra hoops we have to jump through to get started
Building Credit
Getting credit is an important step in the financial world. Being underage it’s hard to achieve it. Credit, for those who don’t know, is a score that keeps track of your financial health and let’s others know if they can trust that you’ll pay your debts.
Fortunately, you can add yourself to your parents credit card as a authorized user. Hopefully your parent have good credit so that when you turn 18, you’ve already built a good credit history.
You can use credit to qualify for a mortgage and getting good rates when buying a car and getting loans.
Learn Negotiating Skills
Getting a job like real estate or sales, negotiating can be a good skill to have when getting or making offers. To learn about this you have to read and research and then get actual field experience.
You can use negotiating to get better deals when refinancing, getting a job, or applying for a loan. You can manipulate the terms for better offers to allow more flexibility financially.
Experience
I assume you don’t really know what you want to do as a career or something to bring in profit. Maybe your oscillating between entrepreneurship or working as a tradesman. Start building experience now. In the process you’ll learn skills that may be profitable in the future.
Under legal guardian care you don’t have financial stress to deal with if you wanted to start a side hustle. You have a business idea? Go for it you have almost nothing to lose except your ego. You want to try out a new job? Who cares if the pays low, you’ll gain experience in the workforce.
Don’t Stress It
Thinking about your future may stress you out but don’t let it. It’s a process you need to learn how to enjoy and use to your advantage. Thinking about possible careers? Research it now see how it could benefit you currently and in the future.
Everything is subject to change and that is one of the only sure things we have in life, use it to create a constant in yours.
Buying things is like a leech, it sucks out all your money and takes it away never to be seen again, frugality is like salt it’ll completely diminish that and save the day.
Growing up I never really had that savings instinct. I would get $20 on my birthday and blow it instantly on something unnecessary. Even today I still battle the constant niggling that I need to buy something. But it’s possible to slowly get used to spending less and less.
How to Start Being Frugal
It’s all just a mindset. You don’t have a biological need to purchase or save money. Psychologically it’s a different story. Everyday we see ads on the new best deals for whatever item. Sales up to 75% off! But do you really need that new object?
Frugality is a skill that can take years to master. You have to think twice before buying something. As a teenager we have no other expenses to worry about, so the only thing we are buying is new things we probably won’t use. This is why it’s good to start now.
When you don’t have to cut out expenses to pay a mortgage it’s pretty easy to stop buying new clothes or tech that really isn’t necessary. I have started looking at where I spend the most money on which would be entertainment and devices. I think to myself if purchasing that item would change my life or bring me profit. If it doesn’t I instantly forget about it.
You can start frugality with the small things. If you only get cash on holidays, save it instead of buying something that will only bring you joy for a few days. It is simple and it will greatly improve your financial health.
Why Be Frugal?
Let’s go to the future. Say you’re now 27 and you have just bought a house. You have a monthly income of about 5k that’s a $60,000 salary. Now you can live like you make a 5 figure salary buying new cars, tv, going out to dinner, and vacations. Or you can live like you like 25k a year saving and investing the rest. Instead of financial independence in 50 years imagine 10 or even 5.
Now I’m not saying don’t buy things or don’t go out to dinner, if that truly would mean something to you then just fit it in your financial plan.
Also if you want to live below your means it doesn’t have to be an extreme gap between your salary and expenses. You could make 50k a year and live like you make 40k. You are still saving it’ll just be at a slower rate. Enjoy life and do what is best for you.
Frugality Long Term
If you’re thinking about your future hopefully it’s long term and not just a year. When you want a long term result you must act in a way that will produce it. You can’t expect that once you reach a financial goal such as a 1 million dollar net worth that now you don’t have to be frugal.
If you continue being frugal you will accumulate wealth continuously to support the lifestyle that you want, but enjoy life in the process.
Investing doesn’t have to be like a life or death situation, in fact it can be used as a steady starting point when distributingyour wealth.
Starting as a young teenager, my grandfather was a financial advisor. I’ve always been a pretty curious person so I would ask him questions about his job and what he did. He tried to explain the basics of the market and investing which led to me 5 years later now using that info to invest and to teach you the same.
The Stock Market
The market may be one of the most volatile things in the economic region, but that doesn’t mean long term it can’t be used as a tool to bring in stable income.
Stocks are just pieces of a company that decided to trade/share it privately or publicly depending on their goals. The stock market is well like a (now) virtual “market” that depicts the actions of those stocks as well as the performance, price, and other factors that would go with analyzing a company.
Now you can use the market to see how the economy is doing. Looking at big indexes, they track the big deal companies stock like Amazon, like NASDQ or S&P500 you can see how the market might be performing as a whole.
Typically ups and downs on a daily basis can look a whole lot more volatile and scary than in reality. Instead of looking at the last week or month, look at their entire life as a company. Is there a obvious steady growth? Did they grow for a few years but then dropped in 2008 and haven’t recovered since? This information can help you as an investor know how well the stock is doing.
This is just information from my perspective and experience, as a young person you should talk to others more experienced in this area as well as extensive research on terms, meanings, and other information to decide how you will invest.
Strategies For Investing
Investing is kinda like playing chess, you have to think 4 moves ahead and hope that you’re opponent (stock market) doesn’t do something you didn’t predict. Except that the stock market could care less if you lost thousands of dollars, and you’ll probably never learn really how the market will act.
That may seem a little disheartening to hear but it’s true. This doesn’t mean you can’t be successful investing in the stock market. Using a mix of investing strategies and knowledge you can make choices that actually are profitable long term.
Let’s go over some just 3 common ones. (Disclosure I will be using my own nicknames and personal experience to depict each strategy.)
Strategy 1.) The Slow and Steady Snail
Don’t get all down about the name as it seems pretty boring, but it can reap large sums. This strategy includes investing in index funds or ETFS (which are a bit more different than index funds.) These track different indexes (NASDAQ for example) and different sectors (Cybersecurity is one.)
The difference between ETFS and index funds is that the ETFS are traded in trading hours and index funds are traded at the end price of that trading day. For example if I were to buy CIBR at 10:30 EST it will go through right there, but if you bought FCNTX you would have to wait until it closes and it will go through later.
Basics of this strategy is that you can invest in let’s say FCNTX, it follows the S&P500 index and is investing capital appreciating companies. It holds multiple types of companies such as Amazon and has a steady yearly return of about 11% or so which is about an average return. So let’s say you invest $200 in FCNTX and then $50 every month. In a year that would accumulate to $800 with a 11% return you’d be up to $888 earning $88 by doing nothing. Doesn’t seem like much but over time and bigger investments it can grow into something much bigger.
Strategy 2.) Wall Street Wannabes
Investing in the market is fun, you get to see your money grow and get adrenaline rushes when a stock soars 150% in a day and continues to go up for a few days after. But what about when it crashes, as the saying goes, what comes up must go down.
Now this is a strategy for a reason, you can make money this way, lots in fact, but then again you may lose lots.
In my opinion the way to go about this is to learn about stocks and how they act to identify trends in stocks so you know when a stock is at the tip of the growth spurt so you don’t lose all your money when you hold for too long. Then you can decide to set money aside in your portfolio to experiment with gambling. Similar to wall street investors only because you try to look for the best stocks ever whilst competing with real wall street investors.
Strategy 3.) The Crypto High
Cryptocurrency has started popping up everywhere. In some countries it’s became a government regulated currency whilst others are banning it from being traded.
Investing in crypto can be risky because of it’s insane volatility. One day it can be up to 50k then the next it’s down to 30k. But there’s different cryptocurrencies like Bitcoin or Ethereum. Each has different set prices and company background. People can make money off of it but you have to be patient and diligent and not get stressed when you may have to cut your losses.
People who invested in this years ago are the few who are now able to successfully make a dependable profit off of it. Unfortunately to invest you must be 18 to but it’s good to learn about everything first anyways.
Investment World
There is way way way way more to stock market investing than this. I’ve just written what I know so you can get started learning what you think would work for you. If you want suggestions on topics to read about I suggest analytical analysis and how news and media can effect a companies stock.
The stock market may seem intimidating but don’t fret, it can be learned and it’s not as scary as it looks.
Buying a house seems to be one of the main reasons people have debt, but what if that debt wasn’t as bad as you thought and it brought you profit?
Real estate is such a huge topic that talking about it in general won’t really help you much, so I’ll be telling you about a specific strategy or subgenera of real estate; multi-family homes.
What is Real Estate Investing?
When I was learning about finance, I only knew about the stock market and even then I barely knew what a dividend was. Now I try to plan my financial future around real estate.
Real estate investing comes in many different shapes and colors (literally.) Some people have specific techniques and strategies they use to bring in profit, such as BRRRR. I could write a whole page on just that method.
Real estate investing is mostly this though, buying a property, managing it, rehab, and then either renting it or sell it for a higher price then you got it for. So it seems pretty simple at least in print.
How To Start Real Estate Investing?
The first thing that I believe every investor or just person in general should do is get a safety net of about 10k. If for any reason you were to lose a job or some unknown tragedy were to happen you would be able to live off of that until you get back on your feet.
Okay on to real estate. Since this site is intended for teens and such, the process to REI is going to seem so far away that you almost don’t care or it seems discouraging. I understand but bear with me.
When starting REI you have to learn everything about it, all the different types and real estate that you can invest in. Listen to podcasts and read forums. Connect with local real estate agents and groups and just listen. See how the real estate market works and why it may work that way.
Look at properties nearby in a certain condition that you think future you would be happy to live in which means others will want to live in, meaning tenant and monthly profit.
Now if you are of age to buy your first house, if you saved up money young, you can put a down-payment on a house. Then you are given choices for types of mortgages (fixed rate, variable rate, etc.) that is basically a loan with a certain interest. Once you buy that house if you went with an FHA loan which allow a lower down-payment then you have to live in that house for a certain period of time. You can still have a tenant though, this is called house hacking.
Is House Hacking For You?
House hacking is just when someone lives with you and you split the rent, the only reason people call it that instead of “roommate” is because instead of using that money to buy personal entertainment you use it to pay off your mortgage.
This strategy is what most people start with when they get into REI, or at least to me it seems like the best option for affordable living in your own home.
Here’s an example, let’s say you found a house for 150k it’s a two unit 2 bed 2 bath (a multi-family unit) and you decide you would like to rent it out the other side to your friend. You qualify for a FHA loan which means that (in this loan) you have a 10% down payment which is 15k. Now you have this loan to pay off with an interest rate of 3% for 10 years (this is just an average, real rates will vary) so every month you have to pay about $793 for 30 years. Split that with a roommate and you’re only paying $396. Boom.
There is far more to this such as cash flow and expenses that can vary how you are to go about buying properties this is just one very simplified version.
Multi-Family Home Investing
Now you have seen a simple example, let’s talk about multi-unit properties. There are all types of properties; rental, residential, commercial, raw land etc. Multi-unit would be considered residential. Buying these types of units allow multiple income streams per month from however many houses you theoretically would have.
The downside to it is management. You can always hire a property manager when you reach a large portfolio, but if you only have one or two you can and should learn to do it yourself.
Starting young means you can’t technically buy a house now, but you can teach yourself negotiating skills and people skills in general. If you’ve had a bad landlord you know what I mean.
Managing a multi-unit portfolio can be greatly rewarding but also required hard work and dedication.
Bottom Line
REI is simple and straightforward but making it a successful one is more difficult. If you believe you can network and create a team to help you better understand REI, you will be successful.
There is so much more to REI then what I’ve written above, but it’s a starting point to learn anything and everything. I suggest reading Biggerpockets forums and listening to their podcasts if you really want to get into the nitty gritty of it.
Financially Independent Adolescents 