The Advice I Wish I Had at 20.

If only I knew then what I know now.

The other day, I was at a little happy hour and one of my friends brought their interns. We had an absolute blast and it was refreshing to see some college aged kids so passionate about where they worked and what they were working on.

Anyway, one of the younger guys approached me and asked what I did for work. I told him I was a financial advisor and that I was introduced to his director through mutual friends in the space.

Then he just flat out asked me, “What’s the best advice you could give someone in my position? Contribute to a Roth IRA?”

While a Roth IRA is an amazing idea, my advice had nothing to do with where to invest, how to invest, or what to invest in.

I replied with the following: “If you truly want to become wealthy, I’d focus much more on your ability to increase your income than almost anything else at your age.”

I think this caught my new friend off guard. I assume they expected me to say something along the lines of saving a percentage of income, using tax-advantaged savings vehicles, or automating investments.

And all of these things are awesome. But in all honesty, the advice I wish I had when I was 20 is exactly what I told him.

I think this goes a long way for young professionals. Especially those who are willing to bet on themselves.

Obviously, I am not saying don’t save or don’t worry about expenses and go wild. I am saying that when it comes to things that really move the meter, income is largely the path of least resistance.

Trading a $5,000 portfolio into $10,000 could require tons of luck and risk. Whereas a $5,000 raise in salary could be much lower hanging fruit.

Personally, I wish that when I was in my early 20’s, I focused much more on my career capital than I did trying to be exceptionally frugal and save every last dime. From my own experience, this was a losing game. I lost out on experience, time, and sanity.

I think back on my mindset then and it was almost completely backwards. The ability to put another $50 away each month should’ve been outweighed ten-fold by the opportunity of building a network, finding new clients, and nurturing professional relationships.

As my income has grown and as I became more confident in my own professional abilities, I now know that the biggest tailwind to my financial life is likely my ability to earn more.

I truly believe that all young professionals should consider their income trajectory. It will likely be the biggest driver in their ability to attain wealth. From there, consistent increases in savings goes a long way. But the income has to be there before we can make further savings.

This is for informational purposes only and is not intended as legal, tax, or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of publication and are subject to change without notice. Past performance is not indicative of future results.