Tuesday, August 9, 2022

The 5 Best Purchases You Can Make in Your 20s

You don’t need flashy material items to be worthy of someone else’s time. But I learned that the hard way.

During my freshman year of high school, I started to become more conscious of what those around me thought was cool. As I walked through the long and narrow hallways every morning, it was hard to spot someone who wasn’t wearing at least one piece of designer clothing.

Up to that point, I had never felt any real pressure to dress a certain way in order to impress people.

Suddenly, I wanted to fit in with the crowd. Spending $100 on boots or $50 on a designer wallet seemed normal. During my high school years, I wasted a lot of money on material goods just so I could blend in.

And it was a huge mistake.

Still, it was a period of learning and growth for me. By the time I got to college, I realized that buying frivolous items I could barely afford was completely unnecessary.

Instead, I poured time into forming real relationships with people who didn’t care whether or not I carried a designer purse, and I found smarter ways to invest my money.

The following are five incredible purchases you can make in your twenties that have the potential to grow your wealth exponentially in the years to come.

1. This Transportation Essential

Having a reliable mode of transportation, such as a car, is very important. I personally waited until I was 21 to buy myself a car. Up to that point, my parents graciously let me use their old powder blue Town Car.

It was a pain to park because it was so large, but driving it for years allowed me to save up some extra money to put towards a reliable car that wouldn’t break down on me.

While I did purchase an older car (I got a 2004 Mercury Sable), it only had about 50,000 miles on it when I got it, and it was extremely clean. I’ve had it for over two years now, and it’s proved to be a great purchase.

If you are also looking to buy a car, I recommend getting a used one, because the moment you drive a new car off the lot, it will depreciate in value.

According to Forbes:

“An automobile is a depreciating asset. As it ages, it loses value rapidly and drastically. There is very little chance an automobile used for personal transportation will appreciate in value.”

Therefore, buying a used car will save you money while still providing you a reliable mode of transportation to get you everywhere you need to go.

2. Education

An investment in knowledge can pay off immensely, so it’s one I highly suggest looking into.

I’m grateful I put money into furthering my education after high school. It was a lot of work, and definitely difficult at times, but I truly do believe that getting my bachelor’s degree in electrical engineering was worth the investment.

College might not be the right path for you. But that doesn’t mean you shouldn’t invest in furthering your education in some way.

There are many routes you can take, like online courses, two year programs, etc. that will help you gain more knowledge and experience at a lower cost. After all, knowledge is power.

3. Business Investments

This is the one that I would consider the most risky. You never know if a business venture is going to pay off and work in your favor.

But, in my opinion, it’s a risk you should be willing to take, especially when you’re young.

I’m sure you have heard the saying, “you have to spend money to make money”. This is definitely true in business. I invested in inventory for my online shop on eBay, and while it was scary at first, it paid off for me in the end.

As long as you research what you’re getting into, I think it’s ok to take a risk and invest some money in a potentially profitable business.

4. This Crucial Technology

Having a personal computer is more important than ever nowadays. Without a high quality laptop, I would never have been able to build my business.

My main sources of income right now are online reselling and blogging. Without a laptop, I would not have been able to type the article you are reading right now.I wouldn’t be able to easily list my items on eBay either.

You may not think a high quality laptop is important, but it really is. Even if you don’t work online/remotely, much of the work people do today involves the internet.

In fact, Forbes states:

“Close to 40% of all jobs can be plausibly done from home.”

And if you add a side hustle to your typically 9–5 job, such as e-commerce, you’ll likely be able to make all the money back you invested in a laptop within a few months (or less).

5. The Biggest Purchase You’ll Ever Make

A house is the only purchase on this list that I have yet to make. And it’s one of the biggest purchases you’ll probably ever make. There’s a lot that goes into it, and you have to be financially ready for it, but it has the potential to be a phenomenal purchase.

According to Forbes:

“When you purchase a house, you are really getting two things. First, you are getting housing services, which is the most important part because everyone needs a place to live. Granted, when you rent, you also get housing services. Secondly, and significantly, when you buy a home and pay your mortgage, you are essentially being forced to save.”

There are also quite a few drawbacks to consider when buying a house, and it’s really more of a service than an investment. However, depending on where you’re at in your life, it could be the right move to help you save money in the long run.

I (unfortunately) have to rely on renting for the foreseeable future. I have moved around quite a bit since high school, and while I don’t know exactly where I will end up, I hope to be able to buy a home by my late twenties or early thirties.

There’s a good chance you will purchase a home at some point in your life, so you might as well start researching your options early on.

Final Thoughts

Making large purchases can be scary, no matter how old you are. However, if you invest your money in the right places when you’re younger, you can set yourself up for greater security and a greater quality of life in the future.

By spending money on necessities and profitable investments like my business, brand, and my car now, I know that I’m setting myself up for a better life in my thirties and beyond. And you can do the same.

If you do your research, save as much as possible, and invest intelligently, you’ll be well on your way to building your wealth for many years to come.

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