A reader asks:
How do young people get rich besides crypto?
Young people becoming fabulously wealthy is still a relatively new phenomenon.
Jerry Seinfeld once said, “The eighties was the first time that young guys could make a lot of money fast. Never existed before. Rich guys were Aristotle Onassis, Andrew Carnegie, shipping, iron. You couldn’t make a lot of money fast in those days. And it has poisoned our culture to this day. It’s poison.”
It’s likely never been easier for young people to create an insane amount of wealth as it is today.
Tech founders, start-ups, YouTubers, TikTok influencers, crypto, etc. The information age has opened up a world of opportunities to become fabulously wealthy seemingly overnight.
I guess the simple answer for young people today would be artificial intelligence or becoming an influencer. All you have to do is have the brain power or personality to be in the top 0.1% or so of people.
I’ll be honest getting rich in my 20s was never the goal. I didn’t have the skillset or mindset for it. It was also a much different environment back in the early-2000s with two recessions and two stock market crashes. No one was getting rich overnight.
Not to sound like an old man yelling at a cloud here but this is a be careful what you wish for scenario. I don’t think it’s a healthy goal to want to become rich when you’re young.
Sure, money is great and all but there is probably more downside than upside in it. Think about all of the child stars who have seen their lives ruined by fame and fortune at an early age.
Getting rich overnight is often more of a burden than a blessing.
Jon Hamm was in his late-30s by the time Mad Men made him a star. He’s talked a lot about how waiting helped:
I think if you find crazy success at a very young age, then it can be quite dangerous. The road to celebrity is littered with people who got too much too soon and weren’t equipped to handle it.
George Clooney was in a similar boat by the time ER made him famous:
I was 34 before [fame] hit. And I’d failed a lot. And having failed a lot I understood how lucky success was. Because it’s not just about your brilliance. Luck has a huge hand it in. I think the reason why a lot of young people are such screw ups..is oftentimes they didn’t have the luxury I had of forming important relationships and opinions and life experiences before having success.
Striking it rich at an early age can warp your sense of reality. Obviously, no one is going to turn down a life-changing amount of money at a young age but you have to be careful it that’s your goal.1
Some people will hit a lottery ticket but here are some more worthy financial goals for everyone else at a young age:
- Build strong savings habits.
- Automate your finances so you don’t obsess over them.
- Create a spending plan that balances now and then.
- Improve your career prospects.
- Figure out how to make more money.
Plus, the journey is often better than the destination when it comes to getting rich. The anticipation of wealth is almost always than the wealth itself. In fact, you appreciate the money more the longer it takes to make it.
The wealth will come later on.
You just have to be patient.
Josh Brown joined me on Ask the Compound this week to answer this question:
We also discussed questions from our audience about using options to lock in profits on your stock picks, bitcoin vs. gold, my Boglehead credentials and how public corporations can reach more retail investors.
Further reading:
It’s OK to Build Wealth Slowly
1It should be said that mid-30s is still pretty young but Hollywood grades on a curve.
