BUILDING WEALTH FROM YOUR FIRST JOB

This piece of advice on building wealth from your first job is a letter to my youngest sister who just got her first job as an intern. I am the proudest big sister right now. What makes me even more proud is that she asked for some financial guidance as she starts her career path. It feels good to give needed advice because you are almost certain it will be used. And that I can always follow up later.

SIDE-NOTE:
All of this is what I wish someone told me when I was a twenty something year old starting out in the salary world.
Heck! I wish I got this when I was running a small business as a university student making a modest but sufficient living.
Forget that, I wish I was given some wisdom when I was a school child selling sweets to other learners.

Anyway, let’s get back to building wealth from your first job. Here are a few pointers for you gorgeous sister and any other interested person:

1. Stay out of debt. ALL debt is BAD. I know you will probably need some debt but it is never a good thing to owe anyone. This should be your principle! Credit cards and retail cards are the most toxic of debts. AVOID them at all cost.

2. Bad company corrupts good character. This piece of scripture will keep you in the straight and narrow. Friends who are flashy and materialistic usually think less. Surround yourself with people as smart as and even smarter than yourself.    

3. SAVE, SAVE, SAVE! If possible, save more than 30% of your income every month. 50% would be great. I’m sure you have no intention of working for a boss for the rest of your life. OK, I hope so. Watch your clothing budget!

4. FIRST things FIRST. The first thing you do when you get your salary (besides Spiritual commitments) is to transfer the portion you are saving to your savings account, preferably a Money Market account. This way you start building your Emergency Fund.

5. INVEST! Within your first months of being employed put a portion of the money you are saving in Exchange Traded Funds (ETFs) like satrix. This has to be a bigger portion of your savings. You will see it rise and fall but steadily building up. (I cannot emphasize on this point enough as part of building wealth from your first job). Later on in your life you will have this fund cover all your lifestyle needs in dividends.

When you get braver, you may start investing in stocks. It’s not as scary as it looks. Just don’t buy the products and software that they sell to teach you how to invest. If you prefer, go for property investing like I do. Buy property at below market rate and resell or rent out to tenants. It’s important to remember that NO investment is passive. You work your butt off building wealth with or without investment managers.

6. GROW with your career. You will ultimately get a raise in your job or get a higher paying job elsewhere. Raise your savings and investments with your increase in income. Stick to your percentage of savings and investments.

7. PROPERTY AND DEBT. In South Africa it is better to own your home. You never need to invest in your own home but it has worked out better for me and people I know. This is the only debt that is justifiable to have. When you do buy a house of your own, get a townhouse in a high rental demand, convenient and upmarket area. You may rent this out someday.

8. WARNING: Almost everyone around you will be carrying bucket loads of debt. Most will argue that you cannot live without debt. That’s a lie. A very few people will be debt free and labelled ridiculous names. Choose to be your own person and stay away from the crowds when it comes to your personal finance. You are guaranteed to lose friends over this. Press on; they are not worth it anyway.

There are a number of other ways you can fast track your progress when building wealth from your first job like earning extra from side hustles. For any specific how-to information, click on the active links within this post.

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