I recently read a jaw dropping article seen here on Elite Daily. Simply put, I was blown away at the financial irresponsibility the author maintains. As an investor, if this doesn’t make your blood boil, I don’t know what will.
I’m honestly not sure if this article is satire, but I’m going to assume it reflects the author’s actual views due to the fact that I have several friends whose views somewhat align with the author’s. The article is entitled “If You Have Savings in Your 20s, You’re Doing Something Wrong.” The basic premise is that you should enjoy your 20s and not save a dime. Live carelessly because once you grow up and have kids, your freedom will become defunct. Only at that time should you worry about savings.
The author goes on to argue that nights out with friends, eating out at restaurants, and impulsively buying clothes is more important than saving money. A direct quote: “[Saving] $200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.”
Raise your hand if a night out at a bar or club landed you a $60,000 pay raise… didn’t think so.
I’m not going to get into the compounding growth of your savings and investments. If you are reading my article, you either are a real estate investor or an aspiring real estate investor, and you know good and well what compounding growth can do to your wealth.
What’s More Important: Fun vs. Savings
Having fun and living vicariously are NOT more important than money. At the same time, money is NOT more important than having fun and living vicariously. But to totally disregard the need to save is inherently a fatally flawed argument. Money and savings are extremely important. By disagreeing, the author essentially guarantees that she will never have savings.
The Law of Attraction simplifies this idea: If you don’t think something is important, you will disregard it or get rid of it in totality. For example, if you think your friends are important, you will naturally work to build long-lasting relationships with them. On the other hand, if you don’t think a pet dog is important, you likely won’t have a pet dog.
The same can be said for money and savings. If you think money and savings are important, you will save, invest, and find that more money somehow comes your way. The author doesn’t think this way, essentially guaranteeing herself a lifetime of financial pittance.
Even More Concerning…
What concerns me the most is that someone my age clearly possesses a lack of financial education and perspective (not that it’s her fault) and further has the audacity to share her ignorant advice with the rest of us. I’ve discussed this before with a few other younger folks on BP, and I think we are among the *lucky* ones whose parents took a vested interest in our financial education. That education will eventually lead to financial success and freedom.
But here you have someone who seemingly has a decent paying job, yet recklessly manages her finances and disregards smart financial decisions. Who failed her? Was it her parents? Educational institutions? A combination of both?
This is NOT just a problem for 20-somethings; it’s a chronic disease that our entire country, regardless of age, needs to work to correct. Why? I don’t know about you, but I don’t want my tax dollars to help someone who never learned to respect money. I don’t want to see more Occupy Wall Street movements. I don’t want to see our economy unravel because a collective group of financially uneducated people think that living with extreme financial risk (i.e. paycheck-to-paycheck) is perfectly fine.
We need to work together to instill upon everyone a basic fundamental understanding of personal finance.
Sure, this author obviously takes an exceptionally contrarian view in regard to financial management. But it saddens me because I personally know 20-somethings who think along the same lines. The most classic thought is, “Well, when I die, I can’t take money with me.” True, but it takes an awfully long time to justify that line of thinking, wouldn’t you say?
How Can We Help?
There is a growing need in this country, and even the world, for financial education. I see it among my peers, I see it in the articles I read, and I see it in macro and micro-economic statistics. In the past, I’ve volunteered to teach local middle school kids basic principles of personal finance. There are organizations out there currently pushing, with some success, the need for integrating the teaching of financial literacy into our school systems. But it’s still not enough.
How do you disseminate wealth building fundamentals to the masses? The younger generations are increasingly connected, so why aren’t they receiving this critically important information?
By the time these people “grow out of it” and realize how important personal finance is, it will be too late. How can we, as a collective group of bright investors, help people realize the significance of financial literacy at a younger age?
I don’t know the answers, but I want to help build solutions.
I’m all ears.
[Editor’s Note: We are republishing this article to benefit our newer members.]
In your opinion, what would be the best strategy for combatting the financial illiteracy of our nation?
Let us know your ideas below—and let’s talk!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.