One problem that occurs when you are younger, is that it seems like "everyone else" has a ton of dough, and you are flat broke. My net worth, for example, was pretty much negative until age 30, and much of that was due to my own malfeasance.
But, 20 years later, well, a lot has changed.
It may seem unfair to start out young and with nothing, but that is how it works. And the only way to fix the situation is to start saving and get into lifetime habits of frugality.
And before you know it, you wake up one day and you have a boatload of money. It happens. But it takes time - and if you are in your 20's, one thing you have a LOT of, is time.
So don't sweat it, if the contributions to your 401(k) seem pitiful, and your account doesn't seem to grow at all, since you checked it five days ago. It doesn't work that way.
And I remember thinking, at that age, "Gee, I'll never, ever get ahead in this game! It simply takes too long and it is too hard to save!"
But over the long haul, things will improve and market values for your investments - yes, even homes - will go up. It is just a matter of waiting and playing the game.
It is tempting - and immature - to think, "Well, I've been saving for a year now, and hardly have a couple of grand! Might as well buy a Jet Ski and enjoy myself instead! Besides, they are offering 0% financing - it's like they are giving them away!"
And you can spend a lot of dough having fun and treating yourself in the here and now - and totally fucking yourself over a decade or two from now.
And one reason my net worth was negative at age 30 was that I had had a lot of fun - at the expense of my future life. And yea, it was kind of stupid, too. I could have had just as much fun, for a lot less money, by spending more wisely. Yea, a motorcycle is a stupid purchase. Buying a band new motorcycle is even more stupid. Right there is $1000 I could have banked, instead of spending - and the net effect would have been about the same.
And, as you might guess, one reason I started turning things around was that I finally sat down one day and calculated my net worth, and realized, with Student Loans, car loans, and other debt, I was actually upside-down on my life. I had no assets to speak of, and just debt. And that's when I decided I needed to turn things around.
Did it happen overnight? Hell, no. We're talking a 20-year journey, that is still not over. And there have been pitfalls along the way - expensive pitfalls, too. But overall, things have worked out well. And I am optimistic for the future, too. But that is the subject of my next post.
The Journey of 1000 miles begins with a single step. The sooner you take that step, the sooner you will reach your goal.