If I could go back in time, I would give myself 9 specific money tips that would have saved me years and prevented me from losing thousands of dollars. Today, I’m going to share them with you: 9 financial tips for investing in your 20s that I wish I’d known. The sooner you apply them, the sooner you’ll change your relationship with money, make better financial choices, and start building lasting wealth. But rest assured, no matter your age, it’s never too late to take action.
Faced with the problems of pensions, inflation, and collective impoverishment, having a financial education has become a necessity. Yet, talking about money remains taboo. I was fortunate to receive a financial education very early on, with my first securities account opened in 2003, more than 20 years ago, when I was still a minor, but not everyone is so lucky. Despite everything, when I started, there were so many things I didn’t know about money and opportunities I missed due to a lack of knowledge. Today, after years of experience, notably as a financial investment advisor and founder of the firm S’investir Conseil, I am here to help you avoid repeating the same mistakes.
1. Financial advice for investing in your 20s Don’t finance liabilities with credit
The number one mistake people make when starting in their working lives is buying “liabilities” on credit: a state-of-the-art phone, a QLED television, or a new car, for example. A liability is anything that costs you money without bringing you anything back. And the true cost is much higher than you think. A €10,000 loan at 7% interest over 15 years doesn’t cost you 7% once but 7% each year on the remaining amount to be repaid. In total, that’s €6,178 in additional interest that you’ll have to repay, or 61% of the amount borrowed, not 7%!
During this time, your liabilities will have lost value. For example, new cars lose an average of 20% of their value as soon as you leave the dealership, but your credit will remain intact. Buying a liability on credit is like digging a hole in the sand: the deeper you dig, the more it fills up.” Unfortunately, some end up in debt and are unable to repay their loans, which can lead to being listed with the Banque de France, having your assets seized, being evicted from your home, and even becoming socially excluded.
2. Understand that every job matters
Whether it’s a small student job, a part-time job, or a few hours here and there, you need to discover what motivates you deep down and what holds you back. Before starting my own businesses, I was an artificial intelligence engineer at a CAC 40 company. Before that, I was also a web developer in Australia. During my studies, I worked every summer: in the fields de-shedding corn, or de-spinning garlic, or on the assembly line at Peugeot. These jobs taught me the value of money at a very early age and gave me a taste of financial independence.
3. The golden rule the surplus budget
This is step number 1 to managing your personal finances well: have a surplus budget. Have more income than expenses. Spend less than you earn to avoid falling into a cycle of debt. It sounds simple, but it’s the pillar upon which all your financial security and freedom rrest It’s obportant to treat yourself, but your extra budget will allow you to build an emergency fund, essential for dealing with life’s tough times: a car breakdown, a medical emergency, or losing a job. Without this security, every unforeseen event becomes a crisis. But that’s not all: a surplus budget is also the key to investing. It’s this surplus that will allow you to invest your money in profitable assets, make your money work for you, create passive income from your capital, and build a future where you no longer depend solely on your salary.
4. Harness the power of compound interest
Would you rather receive 1 million euros right away or 1 cent that doubles every day for 30 days? Most people choose the million, but the doubled cent would earn you over 5.3 million euros in 30 days. That’s the power of compound interest. It starts slowly, but over time, the growth accelerates dramatically. Here’s how it works: If you invest €10,000 with an annual return of 10%, you’ll earn €1,000 in the first year. In the second year, that €1,000 will generate interest, giving you €1,100 in earnings, then €1,210 in the third year, and so on. In the tenth year, you’ll no longer earn €1,000 each year but €2,360. The earlier you start investing, the more compound interest works in your favor. Every euro you invest generates returns, and those returns, in turn, generate more returns. It’s a virtuous circle that, over time, transforms small amounts into impressive sums.
5. Your best investment is you
Knowledge is the only wealth that no one can take from you. Like compound interest in the stock market, knowledge accumulates and creates a snowball effect. Today, we’re incredibly lucky: the internet is an infinite playground where everything is just a click away. YouTube lets you learn a language, cook, edit videos, do DIY, or manage your finances. Pehad had a turning point 8 years ago. I bought my first guitar without knowing anything about it, and after only one hour of guitar practice per day for 1 month, I knew how to play guitar better than 90% of people. And the guitar is an instrument that can go very fast. By mastering a few chords, you already give the impression of playing well. This is what Tim Ferriss explains in his book “The 4-Hour Chef”: by dedicating about 20 hours of practice, or about 45 minutes to 1 hour per day for a month, you can master the basics of a skill well enough to outperform 90% of people. This doesn’t mean reaching expertise, but rather achieving functional and impressive mastery in a short period of time. And I can assure you that when it comes to investing, being better educated than 90% of the world can give you a huge head start, generate passive income, and change your financial future. With a few key principles mastered, you can achieve impressive results over time. If you want to learn about investing, I explain all these key principles in my free training and teach you how to invest to secure your financial future and generate passive income (even starting from scratch and without knowledge).
6. Take smart risks
Climbing a mountain without equipment or driving a car without a seatbelt is foolish. These kinds of risks are pointless; you’ll be in your danger zone or panic zone. On the other hand, taking smart risks ultimately means stepping out of your comfort zone and into your progression zone. In investing, unlike games of chance like casinos where the odds are against us, investing with strategy offers a major advantage: the odds are in your favor. The stock market has returned around 10% gross per year, or more precisely, 7.1% net of inflation, for over 200 years. While the stock market does present short-term risks due to market volatility, at this rate of performance, it would allow you to double your purchasing power every 10 years. Taking risks can also be about entrepreneurship. Starting a business can be the most rewarding experience of your life. I’ve never learned so much as I did through entrepreneurship, creating “S’Investir” and “ S’investir Conseil .” Whether it’s a startup, a service company, or a boutique, entrepreneurship allows you to test, learn quickly, and make a living from it if it worksNottt everything is rosy in entrepreneurship; there are still many businesses that do not survive after 3 years, particularly micro-businesses, where more than 50% of them do not survive the third year.
7. Have assets working for you
You’ll likely spend most of your life working to earn money. Why not generate additional income through financial investments? Not relying solely on your time or energy but having assets that passively generate income. Saving isn’t limited to a Livret A savings account. Even an investment of €100 per month can be enough to create a habit and discipline that will put you on the right track. For example, with an investment of €5 per day, or €150 per month for 30 years at 10% per year, this gives a final capital of €309,426. For 10 more years, this gives a final capital of €832,552. Imagine having an investment earning you €500 / €1,000 / €1,500 per month in additional income. Over time, this income can supplement your salary and give you more freedom over your time.This willl require savings to invest. I discuss this in detail in my free training course. Don’t wait until you have a fortune to start. Start as soon as possible, even with small amounts. The number one regret of the people we support at S’investir is not having started earlier. For example, by having invested only 10 years earlier in the stock market , the results can be very significant, with twice as much final capital.
8. Beware of compound charges
Make it a habit to research the vehicles you invest in, especially the fees, which can seriously impact your performance. Your banker or traditional financial advisor will most likely sell you life insurance or investments with exorbitant fees. That’s how it started for me at my local bank, with products loaded with fees. Performance wasn’t up to scratch at all. Just like compound interest, fees compound. Paying 3% in fees per year while investing €50,000 over 30 years means you’ve missed out on €250,000 in gains—that’s huge! That’s 57% of your gains gone up in smoke in fees.
9. Today’s money is worth more than tomorrow’s.
The value of your money decreases day by day. Inflation gradually eats away at your purchasing power. What you can buy for €1,000 today may cost €1,200, €1,500, or even €2,000 in a few years. That’s why letting your money sit in a low-yielding savings account is a losing strategy, and it’s guaranteed! It’s very risky to do so. Every euro strategically invested today works for you and gains value, while every euro left idle depreciates. For example, if you keep €10,000 in a savings account paying 1% annual interest while inflation is at 5%, you lose 4% of your purchasing power each year. In 10 years, you will have lost nearly a third of the real value of your money.
