The 6 BEST Purchases To Make In Your 20s

What's up guys? It's Graham here. So don't ask me how this happened, but this morning I got insanely sidetracked looking through all of my previous YouTube videos, and wow, I talked a lot about the worst things that have happened to me. If you don't believe me, check this out: like here's the time where I evicted a tenant, the time where I quit my job because I hated it so much, the worst money mistakes you can make in your 20s, my worst financial mistakes, my dumbest money purchases, my three biggest mistakes so far in real estate. You get the idea, and the list goes on. If you want to search for it and get as sidetracked as I did, some of those old videos are pretty cringy too, but we'll save that for another time.

Anyway, after I saw all of these mistakes, I realized I gotta break this cycle, turn this upside down, and talk instead about the best things you could be doing in your 20s. The best purchases that will make you the most money possible and also the purchases that I have personally made that have helped me out tremendously in terms of building my income and growing my net worth. Not to mention all of these are things that nearly anyone can work towards and achieve in their 20s. Unless you're like 29 and a half right now, in which case you might be a little bit too late on some of these. I really need to start making videos about things you can accomplish in your 30s. But even then, this list is meant to be as practical as possible based off my own experience.

And all of this begins once I move this camera over to the chair right over there so I can switch scenes. So I'm gonna go ahead and do that right now. There we go, that's better.

The first best purchase to make in your twenties is an investment towards your career that will make you more money. Yes, I realize this sounds like the typical generic yada yada whatever filler that people throw in YouTube videos. I'm sure people get really tired of hearing that the best investment is in yourself. I get it, sorry about that, I agree it gets annoying, but also I would be lying if I left this part out or said it didn't have any importance whatsoever. Because my first actual investment in myself, besides me going and buying self-help books that ended up actually making me a crap ton of money, was me spending a few hundred dollars to go and get my real estate license.

At the time, I didn't know what I wanted to do with my life. I did not have a ton of money, and I thought me getting my real estate license would be my best chance at making money without being confined to an office all day. Little did I know the few hundred dollars I spent getting my real estate license would be the entire foundation of where I am today. If it wasn't for that, I never would have become a real estate agent. I would not have learned about the real estate market. I never would have had enough money to invest in real estate during the recession. I never would have had that experience to talk about when I first started making YouTube videos, and without it, I doubt I would be here today.

It's funny sometimes how one small choice can completely alter the entire path of your life, like smashing the like button for the YouTube algorithm. And for me, it was getting my real estate license and smashing the like button for the YouTube algorithm. No, don't get me wrong here, I'm not saying or implying that everyone should go and get their real estate license because I don't want the extra competition. I'm kidding! But no, seriously, you could apply this to whatever you want to do. If it happens to be real estate though, go and get your real estate license. If you want to get into a trade, go to a trade school. If you want to start your own business, spend some money going and learning how to do that.

And if you're starting off from the very bottom, really think to yourself what you enjoy doing, what your passions are, where you see yourself in the future, and then find career opportunities that fit that. And really, in your 20s, the best purchase is all just about increasing your income. I really believe your 20s are a time to work your ass off. Don't be stupid; be smart with your money, invest as much as you can, and solidify the entire foundation of your career. Then after that, it's all about just growing and maintaining your career that way you can continue investing, and then one day you'll make enough money from all of your investments to pretty much fund whatever you want to do without you having to work anymore. Unless you want to work, in which case just keep working, that's totally fine.

But it really does all start with an investment in yourself that helps make you more money. And if you're just completely lost and you have no idea where to begin, just go and read the books "Think and Grow Rich," "The 4-Hour Workweek," and "Rich Dad Poor Dad." Trust me, I read those books multiple times; it's life-changing. And that's gonna be enough to get the ball rolling and get you so amped up for the future you're not going to know what to do with yourself. Actually, you will know what to do with yourself after you read those books, so just go and read those books if you haven't done that already.

Next, the second best financial purchase to make in your 20s, assuming you don't already live in a place with really amazing public transportation, is a reliable used car. This is actually the first thing I really bought for myself when I started my career. I saved up all of my commissions from renting houses and apartments, and then used the money I had saved from working part-time throughout high school to put that towards buying a 2005 Toyota Prius with like 80,000 miles on the clock. I think I paid about $6,500 for it, and that was the car that I owned for nearly four years. That car never once broke down, it cost almost nothing in gas, insurance was dirt cheap, and I lost almost no money in depreciation by the time I got rid of it. At the time, I could never understand why people my age were out there buying or leasing really expensive cars when instead they could just use that exact same payment towards buying something that they would be able to own outright within a year.

And sure, even though a 2005 Toyota Prius is not glamorous by any means, it's not like the ladies are coming up to me like, "Wow, Graham, nice Prius! Is that yours?" You know, it did the trick and it served its purpose, which is why I strongly advocate for anyone in their 20s to put your ego aside and just get a reliable used car that is not going to depreciate in value, that is not going to cost you a lot of money, that just gets you from point A to point B. You’ll have your entire life ahead of you to go get cool cars, and if anything, you'll enjoy it much more having waited for it but also buying it when it doesn't cost you so much money financially.

For example, over four years, that car only lost about $1,500 in value, which means, in other words, it cost me only a dollar a day plus the cost of gas, insurance, and maintenance to own a car that I was able to drive for 12,000 miles a year. If you compare that to almost any other car I could have driven, that car saved me at minimum $2,000 a year at a time where the markets were at all-time lows, and I could go and use that money instead to invest and make me way more money. And that's why I suggest you do the exact same. There’s a multitude of really great reliable used cars out there that have already seen the bulk of their depreciation and are not going to cost you much money outside of gas, maintenance, and repairs.

And then, of course, with all the money that you're able to save, you could use that towards these next few things on the list. Now, the third purchase on this list is really something I should have mentioned earlier from the very beginning, but only people who get to this point in the video will completely understand. That's the best purchase you can make in your 20s is to smash the like button through the YouTube algorithm. However, you got to make sure to smash it an odd number of times! And some people want to smash it twice or four times, but that actually unsmashes it, and that's bad. So you got to make sure to smash it one, three, five, seven, or nine times for the best result. And once you do, I'm gonna be doing my best to respond to your comments with a little smiley face like this one.

Okay, no seriously, the third best purchase I highly recommend you make in your 20s is going and hiring a CPA when you go and file your tax return, which by the way, the tax deadline is April 15th. So if you haven't done this yet, then this is the perfect point in the video. Here's the deal: taxes are insanely complicated, way more than they ever need to be. And this is coming from someone who enjoys learning about taxes and figuring out all the intricacies of the system, and I still can't even comprehend half the time how it's worded. Not to mention, there's a lot of the tax code that's completely open to interpretation. So if you want to make sure you're maximizing the benefits of everything you're allowed to do within the law, of course hire a really good CPA.

My philosophy with this is that generally, a good CPA will, at worst-case scenario, at least pay for themselves. That is the worst case. And the best case is that a good CPA is going to end up saving you way more money than you pay out. And for me, hiring someone like this has saved me a lot of money. I was able to get set up with an S corp, maximize my deductions, properly scheduled depreciation, and apply everything I am entitled to. There are so many things that I did not know about, that I did not even know existed. There are literally professionals out there who do this full-time, around the clock for decades, who can give you all of their experience for a really good price. Trust me on this: taxes are something that you should at least just try to understand, and hire a good CPA to do it for you. And I'm surprised more people aren't talking about this. The amount of money that you'll save will probably be really worth it, and the more money you make, the less of it you get to keep. So gotta trust me on this one: learn how this works, hire a professional, and you're gonna be really glad you did.

Now, fourth, we got another classic that I mentioned here on the channel, but it's so important that you do this, especially in your 20s. And that is by purchasing stocks or index funds within a Roth IRA. And yes everyone, I am calling this a purchase! Now, for anyone who's not aware of what this is, a Roth IRA is basically just a retirement account that lets you contribute what's called post-tax money, and then all the money you make within that account becomes completely tax-free at the age of 59 and a half. Think of it this way: just like you have a bank account that gives you access to a checking and savings account, you can open up a Roth IRA that gives you access to your investments.

And the massive advantage to doing this is that all the money you contribute within that account is going to be able to grow completely tax-free. That means if you invest a thousand dollars in the account and one day it grows to ten thousand dollars, well, in any other situation, you would be stuck paying taxes on that. But with a Roth IRA, you can have all of that money completely tax-free after the age of 59 and a half. Now, the advantage of doing this specifically in your 20s is twofold. One, when you're young, you have the added bonus of compound interest working on your side. This means your invested money makes you even more money, and that makes you even more money, which then makes you even more money. The sooner you start doing this, the more money will make you more money, which will make you more money.

Just consider this: if you invest a thousand dollars in an average of a 7% return starting at the age of 20, by the time you're sixty, that $1,000 will be worth almost fifteen thousand dollars. However, if you invest that very same thousand dollars at the same seven percent return, except you start at the age of thirty, by the time you're sixty it'll be worth only seventy-six hundred dollars. That means that just by waiting an extra ten years to invest means you've lost out on doubling your initial investments in the future. This is really why you should do this as soon as possible and just not wait. Opening up a Roth IRA can really just be as simple as going over to Google and then typing in "how to open up a Roth IRA."

And second, the other advantage of doing this in your 20s is that, like I said, you invest with post-tax money, meaning the taxes have already been taken out of what you have left over. And most likely in your 20s, you're not gonna be earning a lot of money, which means you're not going to be in this high of a tax bracket as you will be later when you're earning more money. Which means you'll have more money left over to invest. Whoa, that was a lot to say! This is exactly what I did in my early 20s by opening up a Roth IRA with Vanguard and then just loading up on index funds. And if you're just starting out, you might want to look into VTSAX or any sort of total stock market index fund like this.

And then all you got to do, just say this with me now, is it's really simple: buy and hold! We'll say it once more: buy and hold! That's it! Just invest a consistent amount every single month without even thinking about it. Don't check the markets, don't try to time the markets, don't panic sell, don't panic buy. Just consistently buy and hold over a long period of time. It's that simple. Just do that consistently for 30 or 40 years, and then write me a thank-you card when you're worth millions of dollars from doing this.

I think it comes as no surprise that my next best purchase of my 20s was real estate. For me, this is what happened when I invested in my career, took saving money really seriously, worked towards building my credit, drove a used reliable car, and spent my time learning the markets. And within four years of doing that nonstop and saving as much money as I could, I bought my first rental property when I was 21 years old. By the way, that house was not glamorous by any means; I bought it for fifty-nine thousand five hundred dollars as a foreclosure owned by a hoarder. Needless to say, the place was a complete mess, but afterwards, I continued saving up, and within a year after that, I was able to buy two more properties.

Now when it comes to myself, those early real estate purchases not only changed my entire outlook on investing but also the rewards of diligent hard work. It was such an incredible feeling to look at a house and know that I was the owner and know that that was a result of so much sacrifice, so many late nights, so much self-doubt; seeing it right in front of me just made it feel entirely worth it. Like when it comes to personal finance, we don't get trophies or anything like that, but you could buy a really cool house, and you can look at it. But things really shifted for me the most when I started receiving rent every month.

The idea that I could get paid every single month without having to actively work towards it was absolutely incredible. It felt almost as though every morning that I woke up, I could basically just go underneath my pillow and take an additional $60 out for the day. I felt like I was getting money from a real estate tooth fairy in Beverly Hills, because I would imagine is that how much kids are getting paid for teeth in Beverly Hills? I wonder. Anyway, just knowing that every single day I would wake up and have another 60 dollars in my bank account from rent was just such an incredible feeling and really lit the fire for me to work even harder.

So I highly recommend if this is something you're interested in doing, work towards doing this in your 20s. And if you're curious now about how to do this, here is your next step that leads us to one of my best financial purchases of all time and something that I highly recommend everyone do, especially in your 20s. And that would be to buy a two to four unit property, move into one of the units, and then do what I call house hack.

Now, house hacking is a term where you buy a property that has multiple units, you move into one of the units, and then you rent out the others to cover your cost of ownership of the building. For example, you might be able to buy a triplex for 20% down, move into one of the units, and then rent out the other two to pay your mortgage for you, essentially giving you a free place to live. This is something that I started doing a few years ago, and I gotta say this has been one of my best financial experiences ever. I was able to buy a duplex in the center of Los Angeles that I was able to fix up, and between the rent I receive on the other unit, the equity I get by paying down the mortgage, and also all the tax write-offs, it essentially gives me a place to live and own for zero dollars out of pocket.

In fact, I've actually been able to make money on top of this because property values have risen over the last few years. This has allowed me to save a considerable amount of money; I have more money left over to reinvest in other things that are more profitable than housing payments, and I get to own and invest in real estate at the exact same time. See, the way I see it is that for most people, housing is the most expensive recurring monthly expense that they have, and studies have shown that Millennials are spending the most money by far at about 45 percent of their income.

Of course, I'm gonna mention here that it's not exactly easy, otherwise everyone would be doing it. You have to have the income to qualify for the loan, you got to have the credit score to get approved, and you also have to have the patience to wait for the right deal that makes sense to buy. But I believe if you could do it, your 20s are the best time to make that happen for me. This has really been a transformative experience, and now I'm spoiled; like I can never go and buy a property anymore that doesn't produce some type of income alongside it.

This also happens to be the best way to begin investing in real estate because not only are you saving money on your own housing payments, but you're able to get really favorable interest rates by buying a primary residence. It's really the ideal situation to get your foot in the door, invest in real estate, and make money at the exact same time. And if you want to learn more about how to do this, I have a few other videos where I've covered this in depth, so I will just link to those down below in the description.

And lastly, I just want to throw in two honorable mentions because you can't make a video about the best financial purchases without including these two. And the first for me would be my Tesla Model 3. Now this one was completely unintentional, but a year ago I bought this car because they ran the numbers and I realized that buying this would be so much less expensive when you accounted for tax write-offs and rebates than pretty much any other thing I could buy. Little did I know though that my review on that Tesla would become my single most viewed video on YouTube with over 6.3 million views and earn almost $56,000 in ad revenue from a single video. Not to mention all the new subscribers that have come in from watching that, and my entire out-of-pocket cost to own that car at the time was just under $5,000 for sales tax, license, and registration, which meant I was able to get a 1000% return on my money just for buying the car.

No, obviously me going and doing this was entirely lucky; I was not expecting it, and that was not the intention. You can't really replicate that, but I did want to mention it here in hindsight that for me, that was easily one of the best purchases I think I have ever made. And second, speaking of honorary mentions, I can't make this video without talking about my very near and dear Mr. Coffee coffee maker. I've been making my own coffee at home for well over a decade now, at a cost of about 20 cents a cup, compared to the horrible $4 a cup of coffee at Starbucks, which is a ripoff.

So in terms of something you could buy that's going to end up saving you a lot of money, this is it! Anyone wants to know the secret towards being so energetic on YouTube videos and getting so much done in a limited time during the day? Honestly, coffee is it! Like I have my coffee right over here, it's sitting off-camera, and then I will just have a sip, and boom, here's a YouTube video I just got done!

So there you have it. Those are the best financial purchases to make in your 20s and everything that has worked really well for me that has brought me here today. I really believe your 20s are such a unique time to get ahead, and anything you do right now is going to multiply by leaps and bounds in the future. And don't worry if some of these purchases seem a bit intimidating or you don't really know what to do; it’s entirely normal and don’t beat yourself up over it. Just start small, continually improve yourself every day, make small goals to accomplish as you go along, and as always, smash the like button for the YouTube algorithm.

So, what, that's it guys? Thank you so much for watching! I really appreciate it. As always, if you guys enjoy videos like this, make sure to subscribe and hit the notification bell. Also, feel free to add me on Instagram; I post there pretty much daily. So if you want to be a part of it there, feel free to add me there as well. On my second channel, "The Graham Stephan Show," I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that.

And lastly, if you guys want two free stocks, use the link down below in the description, and Webull is going to be giving you 2 free stocks when you deposit $100 in the platform, with one of the stocks being valued up to $1,400. So if you want a chance to get two free stocks with one of them valued up to potentially a lot of money, feel free to go ahead and do that! Let me know what two free stocks you get! Thank you so much for watching, and until next time!