5 Money Lessons I Wish I Learnt Sooner

Hey guys! Welcome back to day three of the new money advent calendar. We've started off strong, three videos in a row. Um, I'm going to get real tested at like the 20th and the 21st of December, 22nd of December. Yeah, it's going to be tough. I have a feeling my videos are going to get shorter and shorter. But make sure you definitely subscribe to the channel if you are not subscribed! Click that red button, god damn it! And make sure you turn on notifications as well. We got a lot of YouTubers coming onto the channel over the next couple weeks, so make sure you don't miss that. We've got some really awesome YouTubers coming onto the channel, so I'm excited! Make sure you, you know, subscribe, notification bell, like the video, all that stuff.

But in this video, we're going to be talking about five money lessons that I wish I learned sooner in my life. Um, yeah, definitely they've... I've made some... well, I haven't made too many financial mistakes just yet, but there are definitely some things that I wish I knew about sooner. They would definitely have pushed me a lot further along in the process. But anyway, let's talk about it. Let's get started right now.

Okay, first money lesson that I wish I knew a lot sooner is that you don't need a university degree to make a decent income. I wish I learned this a lot sooner, but I didn't. I think the funny thing about university is that I think society really grooms you into a path. Especially when you're a kid, like, you go into high school, you go through college, then you go to university, you get a good paying job, and then you work that job for the rest of your life.

I don't know, just when I look back on university, university is really expensive. And the thing about university is that it doesn't even guarantee you a job. I think that was one of the points of my naivety. Before I started my uni degree, I thought, you know, I'll just get this degree and then, you know, you just get a job. It's like, it's just almost as though getting a uni degree gets you a job. But no, definitely not. In fact, my cousin, he studied architecture in South Australia, and I think he came second or third overall in his cohort. When he finished, I mean, this guy is super, super smart, and at the end of the day, I think he really struggled to find any available jobs going in South Australia at the time. I think he had to move across to Sydney to get a solid job in the architecture industry.

So I don't think that necessarily university really guarantees you a job, and it's totally... if you want to earn just a decent income, it's not necessary. Right? There are so, so many ways that people can make money. Especially now, at the end of 2020, there are more ways than ever before that we could potentially make money. I mean, you could yes, you could go to university, get a degree, get a job. You could go to TAFE or, you know, you could start your own business.

It's never been easier for someone to start their own business, especially with the power of the internet. But there are even, you know, apps that will automatically give you a job. Uber, right? You just sign up to Uber, then you get approved, and off you go. Start earning money. So I definitely think the first money lesson I wish I learned sooner is that you definitely do not need a university degree to achieve some high level of income.

I think there's a saying that like the C students, usually the A students in the class usually end up working for the C students because the C students kind of don't go to university and they kind of figure it out, maybe start their own thing, their own business, and then they end up employing the people with the fancy university degrees. They employ them in their business or something. I can't remember the quote, something like that. Anyway, that's the first lesson about money that I wish I learned sooner.

And then the second big money lesson that I learned or that I wish I learned sooner was: If you are a passive investor, do not try to time the market. When I first started investing in stocks or passive investing, we're talking about just participating in the market, buying ETFs that track the market and go up and down as the market does. I think the number one thing that I was thinking when I first started out, before I knew what I know now, is I was thinking, "Oh, you know, I might just get myself up to speed with this whole investing business so that when the market crashes, I can buy in really cheap."

That is very... in hindsight, that is a bad way to go about thinking about passive investing. I'm so glad that I learned about dollar cost averaging. Dollar cost averaging is just where you consistently buy the same amount or you invest the same amount over specified time periods, and you just keep going. Because here's the thing: if I had stuck with it and not invested and I would instead wait until the stock market crashed before I invested my money, I would have been waiting probably until the start of this year when the market crashed about, you know, 30 odd percent.

I would have waited through years and years of the stock market generating double-digit returns before I actually invested. And in fact, the point at which I invested, even after the crash, would have been a lot higher than the point that I could have gotten into just when I started learning about investing. So definitely, the second thing I wish I learned about money sooner is: If you're a passive investor and you're just participating in the market, don't worry about trying to time the market.

Just dollar cost average. And the only time you need to start worrying about where the stock market is is, like, when you're over 55. Because then, I imagine you, within the next 10 years, you're probably going to want to retire, at which case it actually does become relevant at what level, what valuation the stock market is, at what risk are you taking by keeping that big lump sum that you've invested throughout your whole life. What risk are you taking actually keeping that in the market when you are aiming to retire within the next 10 years?

But if you're a young person, don't worry about timing the market. Seriously, if you're a passive... like, if you're an active investor, then you don't want to time the market, but obviously you want to only buy stocks when they are undervalued. And that's how you reduce your risk. But if you're a passive investor, dollar cost averaging is where it's at. Basically, everyone that I talk to that's an investor says the same thing when it comes to passive investing: dollar cost averaging.

Anyway, that is the second thing that I wish I learned about money sooner. Let's move on to the third point that I've written down here, and that is... this is an interesting one: like, putting time into being frugal is great. However, most of the time, if you're a young person, that time should be much better spent trying to make more money. Make more money! Start some sort of side hustle, start some sort of business. In the long run, if you're thinking long term, right, your time is much better spent trying to generate more as opposed to just saving what you do make.

Yes, there is the saying that a dollar saved is a dollar earned, and that is exactly correct. However, if you think long term, you can't save more than 100% of your income. If you make sixty thousand dollars, the most you can save is sixty thousand dollars when it comes to your income. If you spend all of your time when you're young trying to snowball and grow your income, there is no limit to where your income can go.

Okay, in theory, your income can rise to infinity. Okay, obviously, it might not be realistic, but it does make sense. And it also matters when you make your money. Okay? It pays a lot to make your money as soon as possible, as young as you can possibly be. Think about it like this: if you've got... if you're 20 years old and you've got a grandparent that's 60 years old, and you're both holding one dollar in your hand, the dollar in your hand as a 20-year-old is much, much, much more valuable to you than the dollar that your 60-year-old grandparent is holding.

In fact, if we just think about the average market return, okay, then the dollar in your hand as a 20-year-old is 22 times more valuable to you. Put it this way: if you and your grandparent both won the lottery and you both won a million dollars, okay, to you at that point of time in your life, that one million dollars is technically worth 22 million dollars. The reason for that is because you've got 40 years on them, right? You've got a 40-year benefit that you could sink that one million dollars into the stock market, into some investment, and just at that standard 8% average per year the stock market generates, that one million dollars will snowball over time from when you're 20 all the way up through to your 60.

That one million will snowball into 22 million. And this is a really powerful concept to realize when you're young: the time value of money. If you buy a pair of shoes for a hundred dollars when you're 20, that actually costs you 2,200 when you're 60. But think about a bigger purchase. If you buy a car that's worth 20,000 when you're 20 years old, then by the time you're 60, you're giving up... you're giving up 440,000. So it pays to make money when you're young, and if you're a young person, every single dollar that you have is very valuable to you.

Okay? So always remember that. Anyway, that's the third thing I wish I learned. I wish I learned that when I was like 10 years old. That would have been fantastic. I'd be rich, even now as a 25-year-old. I'd be super rich if I learned that back when I was like 14 or something.

Anyway, moving on. The fourth thing I wish I learned about money sooner is not to listen to advice on money or on a particular topic from people that have never actually done what you're trying to do. If someone has been there and done that, then absolutely listen to them. If someone has been there and done what you're trying to do and have either succeeded or failed, you want their advice. You want to listen to their advice. In fact, probe them for advice—annoy them for advice.

However, do not take advice from people that have never done what you're doing, have never tried to do what you're doing. Because at the end of the day, all of their advice is based only on opinion. Whereas if you're taking advice from someone that's been there and done that, their advice is grounded in experience. And yes, some people can still provide you pretty good advice. Even, you know, just generally they can provide you a thoughtful opinion on what they believe when it comes to your situation. But absolutely, if you are going to listen to someone's advice, listen to someone's advice where they have done what you're trying to do because that advice, as I said, it's grounded in past experience.

Anyway, that's a big one because so many people get discouraged from doing something that they think will be fantastic. They get discouraged from starting a business, going out and doing something, you know, taking a trip to, I don't know, Botswana or something. They get discouraged from doing these things from people that have never actually done that. You know, for people that have just been an employee for 40 years, and they say, "Oh no, you shouldn't! No, definitely don't start a business!" It's like, "What the hell do you know about starting a business?"

Someone that, you know, someone that's lived in Canberra for their whole life and has never traveled overseas and you want to go and experience what the, you know, the Indian culture is like. You want to go on a big Indian tour or something like that, and they say, "Oh no, no, don't go to India! No, no, no, you don't want to do that!" It's like, "What do you know? You've never been there!" So definitely don't take advice from people that have just never done what you're trying to do.

Anyway, moving on. The fifth thing I wish I learned about money sooner in my life is that you, quite simply, you are going to get much further working for yourself as opposed to working for someone else. Because here's the thing: you can still go a long way working for someone else, but at the end of the day, the math just doesn't add up because you are a cog in a larger machine.

You, as the cog, can't become larger than the machine, right? It just doesn't work. When you work for someone else, you are always working to, yes, make yourself wealthier, get your wages and whatever, and save money over time and whatever. But at the same time, you're also working to make someone else richer, okay?

Sure, you can contribute a lot to the growth of the business, but at the end of the day, you are still making someone else richer. When you start your own business, you are no longer the cog in the machine; you are the machine, okay? And the machine can grow as large as... as whatever can just keep growing and growing and growing, okay?

That is a really important thing to realize. You are always... when you work for someone else, you're always going to be limited because you are never going to be the top dog, okay? When you run your own business, you are the business. So the business does well, you do well. The business grows its income by 500% in one year, your income grows 500% in one year.

So definitely consider that. Consider... I wish I knew that earlier. I wish I really had when I was in my teenage years someone, you know, took me aside and said, "Look, think about this. If you work a job, yes, you're going to earn money and yes, you can continue to get better jobs, but at the end of the day, the reason that you've got that job is to make someone else higher up richer—the owner of the business richer. That's why you've got that job."

Um, but it just... it pays some... and now that I've actually gone out and started my own business, I see this happening. I don’t say this to brag; I say it because it's impactful. When I was a physio, right? Well, now that I... I was a physio working full time, and now I've switched and I run this YouTube channel, and I also run another business, Profitful.

Okay, I'm now earning three times what I was earning when I was a physio just working for someone else, okay? Because I've taken charge and I've become my own boss. Now, whatever the YouTube channel does, whatever Profitful does, that's me. That's... whatever growth happens, that's also growth in my income. So overall, definitely you'll get a lot further working for yourself and doing something you're passionate about that you can put your time and your energy into as opposed to just working a job for someone else.

Because for your whole life, you're just going to be working to make someone else richer. Anyway, that was a much longer video than what I thought it was going to be, but I guess I'm so passionate about this topic, right? Because I really do wish I learned these things sooner because now, having gone through being an employee and now running my own business, it's just all of these things are now so obvious to me. It's like, oh my gosh, that makes total sense, you know?

So anyway, hopefully this provides some sort of value. That is the third day in a row of videos. We're getting stuck into it now, December! Whoa, what a big month. So I hope you enjoyed the video. Of course, leave a like if you like what I'm doing here with the advent calendar—25 days straight of videos. Definitely leave a like in the video. I really appreciate it! Thank you guys very much for watching. Check out Profitful down in the description below if you want to learn about how I go about my investing. But that's it for me, guys. Day three done! Guess what? I'll see you tomorrow!