So, you want to know how to turn high earnings into high net worth? Fantastic.
First, your standard disclaimer: I am no financial professional and nothing you read here is financial advice. It’s the sharing of my story in hopes that it also inspires you. Take ownership, and make your way in life.
After all, I’m a self-professed techbro. The word itself inspires visions of spurious spending and flashy expenditures. Needless to say, this is a different version of techbroery entirely. More on that later.
I started my financial journey as an extremely fortunate (not lucky, they are very different things) recent graduate working in tech. I worked hard to get here, yet a well-paying job is far from the finish line. Now I’ve got some income, nice 😏, but how the hell am I supposed to know what to do now?! Can I spend it? I mean I want to, but how much? What about life goals? And why do I pay so much in taxes? Sure I can write a good bit of python and trace Dijkstra’s like a wizard, but WTF is a 401k and who is this Roth guy?
As you may have, I started off a bit overwhelmed. I’d worked a handful of jobs and internships, but I never gave so much as a second thought to retirement or the thick packets from vaguely familiar companies like Vanguard they put on my desk. Now they want me to select my benefits and set my contribution amounts? I just gave it a good swing and hoped for the best, shoutout to the ‘rents for making sure I didn’t butcher it too badly. Still, I felt as though I was leaving money on the table, not fully understanding what I was doing financially. My parents and I live in surprisingly different financial landscapes, so it’s up to me at the end of the day.
But there’s good news, we’re techies. We are smart and exceedingly capable. Learning about money and the tangible effect it will have on our everyday lives - today and 50 years from today - is much simpler than it seems. Dare I say it’s even fun! Much better than scraping virtually nonexistent documentation to figure out how to make some damn API call work. Unauthorized my ass! 🙃
First things first, you need to have some clear goals. It doesn’t have to be a 5-year or even 1-year plan, but what are you after with your money? A lack of perspective is the root of many financial struggles. Many people buy too much house or pay too much in rent. How were they supposed to know what to pay? That’s what it costs to live there! But goals are hard to achieve without any kind of plan. That’s where knowledge and financial literacy come in. There are numerous guideposts and recommendations out there for you, but you have to go looking for them. How much should you spend on rent?
As a young person in the world, now flush with cash to the looks of it, you are a target. A prime place for salesmen of all kinds to make a quick buck. A lack of financial know-how and discipline makes you a perfect customer. It’s not your fault, everyone starts somewhere, and hey, you worked your ass off to make a little coin. You deserve to celebrate!
There are lots of mistakes you and I can make, but the worst is willful ignorance. We know deep down that it’s irresponsible the way we sometimes handle money. It’s the American way. Most Americans can’t cover a single emergency with the money they have in savings. Now I realize I am not the average American, but it’s a sad state of affairs regardless. People should be taking better care of themselves, and that includes you and me.
56% of Americans can’t cover a $1,000 emergency expense with savings
So what do the likes of us about it? What’s step 1? The age-old question. Why, take advantage of the employer 401k match, of course! Free money! Well yes, but no. Step 1 is to embrace that lack of knowledge. Embrace a learning and growth mindset in your personal finances. You’ve doubtless heard it at work, but it applies here too and it’s real.
I’m tired, I worked hard for that paycheck, and I’d rather just go home and flip on Netflix. All the more reason not to squander it away! Do yourself a favor and read 20 pages a night on personal finance. You’ll be more disciplined and smarter. A better employee already!
with open('the_richest_man_in_babylon.txt') as file:
file.read();Be considerate to your future self, are you saving for retirement? Are you living at a sustainable rate, below your means? Learning how to manage your money will pay dividends as you provide yourself the freedom to pursue the life you want and deserve. Checkboxes do nothing of the sort, it is your story and you should write it. Give yourself the tools to do just that.
Step 1 is all about learning how to be a responsible member of the economy, putting yourself first. Have you been trying to keep up with the Joneses’? That’s okay. I’ll let you in on a secret of mine. I blew almost my entire sign-on bonus. 5 figures, it was more than I knew what to do with. Don’t get me wrong, I needed some things for the move into my new place. But did I really need 3 new pairs of sneakers? A brand new $500 hair dryer for the girlfriend? Hell no. I don’t regret some of those purchases, but I had no grasp on how much I could afford at the time and way overdid it.
Take ownership, take action, and take the first step.
The important part is to forgive yourself. It’s a new day, learn and be better. How does this fit into my expenses on a monthly basis? Now that I’ve started to educate myself on managing my money, I can still buy 7 concert tickets for friends and family as a Christmas present. But now I do it guilt-free, knowing that I planned for it and can thoroughly enjoy the gift and the concert.
We’ve made it through school and emerged on the other side, temporarily victorious. But the future has far more in store for me and you. I won’t be a junior dev much longer, and just as I work to become a better programmer and to take on bigger and better projects at work, I work just as hard to be smarter and more responsible with the fruit that such effort bears every two weeks.
Ready to take ownership of your financial life and to build a truly wealthy life? Music to my ears, stick around for some stories of my own struggles through learning about financial freedom and wealth. I don’t claim to know everything, but I certainly want to share my mistakes and knowledge so others can join me in this pursuit.
My goal is to build generational wealth. To work hard and make cool (and useful!) shit, and to take full advantage of the fruit that my work bears. To be able to travel with my wife and family without having to count pennies and nickels. To go to sporting events, concerts, and nice dinners when the opportunity arises. I’m far from those things today, but I believe with a little sweat and a lot of books, podcasts, and YouTube videos, all of those things are well within reach.
Sound good? Climb aboard, let’s go bro.*
| * - Ladies are of course welcome if they can stand my awful writing style.