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If I had to give my 20-year-old self money advice in one sentence, I’d say, “Bring your lunch and go to Paris.”
You see, it may not seem like it, but you are going to make a lot of money over your lifetime.
I know, because as a 25-year veteran financial planner, I’ve taken a peek into the financial lives of thousands of people.
Let’s say you start your first job making $50,000 and get a 3% raise every year. Even if you never get a promotion in your entire career, you’d still make more than $3.7 million dollars over 40 years. A lot of money will flow through your hands — what you do with that paycheck is very important!
When I look back over my career, I am shocked at how much money I wasted on things that didn’t matter — convenient things, like lunches out, wasteful things, like buying clothes I never wore much, and services, like bloated cell phone or cable bills.
With the money I spent on these things, I could have gone to Paris for an entire week, every year! And I was a good saver and investor.
Being a financial planner, I knew to:
- Save as much of my income as I could — at least 10% for long-term goals and 10% for emergencies, plus savings for predictable but irregular expenses
- Invest in a diversified portfolio for the future
- Get comfortable with volatility
- Watch my tax liability and use strategies to reduce my taxes
- Pay off credit card debt every month, or at least as soon as possible
What I didn’t realize was how little things add up.
So much money slips through your fingers when you don’t pay close attention. For example, going out to lunch costs about $10 a day. So if you’re doing that five days a week, that’s $50 a week and $200 a month.
A vigilant brown-bagger still has the to pay for food, but the cost is substantially less than having someone else prepare it for you. If the cost of food you prepare at home (or peanut butter and jelly stashed in the communal work refrigerator) is $2 a day, you’d pay $10 a week for lunch instead of $50.
That’s $160 a month in savings. Over a year, you could buy a plane ticket to Europe and still have money for ground costs — plus a lifetime of memories! All because you ate a sandwich and an orange for lunch at work.
There are even interesting alternatives to the crumpled up paper bag.
I have a stainless steel PlanetBox lunch box that opens up to a place setting that can be used in any breakroom, boardroom, or picnic spot. There’s no plastic or disposables, so it’s eco-friendly, too.
I’ve spent a lot of money over the years on clothes, sporting equipment, and other things that were not wise purchases.
If I could get back all the money I’ve wasted over the years on things that didn’t bring me value, I could have visited every continent on the globe.
My advice to my younger self, myself today, and to you is make the most of every dollar you spend. A $10 lunch truly could mean you are missing out on a walk on the Champs-Élysées.
Put your money where your happiness lies. Then you can say, “We’ll always have Paris.”