Billionaires and CEOs have something in common with the rest of us: They didn’t know everything in their 20s.
The people who start and run awesome companies, write best-sellers, and become household names haven’t always known what was best for their money. How do we know? We asked them.
From investor Mark Cuban, who laments his misuse of credit cards, to TOMS founder Blake Mycoskie, who cautions against chasing money, keep reading to find out how investors, CEOs, authors, and other highly successful people answered the question: What do you wish you’d known about money in your 20s?
Mark Cuban, billionaire entrepreneur, investor:
'That credit cards are the worst investment that you can make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market. I thought I would be a stock market genius. Until I wasn't.
'I should have paid off my cards every 30 days.'
Tim Ferriss, angel investor, best-selling author of 'The 4-Hour Workweek':
'In your 20s, optimise for learning, not earning. Work directly under or with master dealmakers, and acquire skills. This is particularly true for negotiating and hard skills like coding.
'What would you rather have: $US20,000 more per year in your 20s, leading to making $US100,000 to $US200,000 a year in your 30s, or a lower-paying job from 20 to 25 -- but one like a real-world MBA you're paid for -- leading to making millions in your 30s?
'It often comes down to prioritizing skill acquisition over immediate postcollege earning. McKinsey or Goldman can be seductive, but it's easy to get trapped in a 20-plus-year path of paying for a bloated lifestyle that is always a bit more expensive than the year before. Serfs can become self-made kings, but consultants tend to remain consultants. The only true job security is a superior skill set.'
Alexa von Tobel, founder/CEO of LearnVest.com, author of 'Financially Fearless':
'Not having a financial plan is a plan -- just a really bad one! Given what I see as a general lack of personal-finance education, it can be all too easy to wing it with your money.
'I was lucky enough to learn this lesson while still in my 20s, so I had time to put a financial plan into place for myself (and start LearnVest to help people nationwide do the same!).'
Blake Mycoskie, founder, chief shoe giver of TOMS:
'In my 20s I wish I knew that the best advice for any person is to follow their passion as opposed to chasing money. I've seen time and time again that the people who foster their true passions and true callings are the ones that end up the most successful.
'It's hard in your 20s not to worry about money, but to focus on making sure you do something you love. Today, I feel like every time I've made a decision at TOMS that I'm passionate about and improves someone's life, the company grows and makes more money.'
Kate White, former editor-in-chief of Cosmopolitan, author of 'I Shouldn't Be Telling You This':
'I was a great saver in my 20s -- my dad had persuaded me to save for retirement, which seemed insane at the time, but I'm eternally grateful. But what I didn't know and wish I had is that it's so much smarter to buy a few great quality items -- in terms of clothes, furniture, accessories -- rather than a bunch of cheaper stuff.
'Oh, sometimes you get a great bargain -- I have two Pier 1 prints hanging in my living room that look like antiques but cost $US25 -- but so often cheap stuff is poorly made and falls apart in no time.
'But the right quality goods last forever and are often timeless in design, something I discovered much later when I could afford better things. I wore a Prada dress the other night that I bought 16 years ago and it still looks good. If you can swing it, go for quality and you'll save in the long run.'
Kevin Cleary, CEO, Clif Bar & Company:
'In my 20s, I wish I better understood the power of investing. At the time, I had fewer expenses, more free time, and a long investment horizon -- it would have been the perfect time to learn about investing.
'While I was disciplined about saving money, I missed the opportunity to leverage my money over the long haul.'
Matt Maloney, CEO, GrubHub:
'Money does not define success or happiness. In fact, if you are truly effective at what you enjoy, money usually follows your passion. Passion drives interest, which in turn drives focus and commitment. Both qualities are requirements for success.
'When given a choice between ambiguous paths, choose the course that will bring you the most emotional and intellectual satisfaction -- not the most direct path to riches. Don't be afraid, you can live a very full life earning far less than you think you need.'
Debbi Fields, founder, Mrs. Fields:
'Looking back now, I know that I would have greatly benefited had I initiated an investment strategy as a young adult. I was so busy trying to save every dollar and living paycheck to paycheck that the idea of wealth creation was never really a consideration.
'Not thinking bigger than my bank account was my error -- I could have set up a simulated investment account, joined a club, or learned about the buying and selling of securities.
'The key to managing money and building a nest egg is learning how to manage small amounts and grow them wisely over time. It can start with pocket change and grow beyond anything you imagined! The key word here is 'imagined' ... You have to add a zero or two to your net worth and direct your attitude and financial strategy toward getting there.'
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