Different generations, no matter how old or young, are all very different, and that’s part of life’s excitement. But the core teachings about success remain largely the same. Young adults are starting their careers or engaging in entrepreneurship. I have two sons. I’m there with my own children and I don’t plan to retire anytime soon. In fact, I’m still running the same financial life planning firm I started twenty years ago.
In my tenure, I have encountered and mentored many people in different stages of their life. I also counsel people who wish they had done things differently as a young adult. Lessons learned. Since we can’t all have such a hands-on experience, here are essential life and financial lessons every young adult needs to know:
Ask the pro to lunch
Knowledge about the past will help you so much with your future, which is why I always tell young people to seek out the oldest people in their company, or the ones who have worked there the longest, to lunch. If they’re still employed after long service, they must have something to offer. If you ask, you’d be surprised at who would be happy to share their advice and wisdom. I still do it. Why re-invent the world.
They’ll be happy to do it, because no one ever asks them to share their experiences, their histories. Their tales will give you a different appreciation and insight into your business and industry, and it will be much more valuable to you than most of the too-often colourless meetings you attend regularly. Although, during these pandemic days, it will most likely be a virtual lunch. While a less intimate setting, virtual lunches give you the advantage of time: No waiting around for the waiter, food or check, and no spreading of deadly viruses.
Contactless Monday mornings
Busy people are getting into their business routines for the week, and the last person they want to hear from when they begin is you, because you represent a freebie, someone who is non-productive for them, wasting their time no matter how worthy you are.
And you, all eager to get on with life, are just going to annoy them if you call first thing Monday morning. Instead, call Tuesday afternoon, after lunch. By then, busy people are more accepting of these calls because they’re already into the rhythm of the week.
Starting a business
A few important rules that will save you a lot of time and money even if you’re not an aspiring entrepreneur:
Act fast – forget the business plan. I’ve seen countless entrepreneurs invest months into research and spreadsheets. Rather, have a two-page plan that your grandmother could understand. Then proceed immediately to the next point.
Get out there – sell your service. Collect the money. Get a client who will sing your praises and don’t worry too much about the margin you make. If you can do this, you’ll have validation that someone in the world actually wants what you think they’ll need.
Start young – it gets harder as you get older. Some people fancy the idea of running their own business, but lack the stomach for it if starting too late, or simply can’t afford the risk. You’ll probably fail a few times, but a true entrepreneur will always power through.
Study accounting – this will turn out to be indispensable. And I don’t mean finance or economics, I mean reading income statements and balance sheets. You’ll be more effective in dealing with financial people, and be more credible with eventual partners and acquirers.
Eye on the exit – I’ve worked in an industry filled with very smart people, but many never considered an exit strategy until it was far too late. And there’s no comparison in the amount of money you’ll take off the table, to say nothing of the difference in long-term capital gains rates. Decisions you make in the very early days can logically lead to an exit or may ultimately bar the door.
Saving people from themselves
I learned the hard way that there are people who take and take, particularly of your time. It’s like owning a stock you thought was a good idea to buy. And you buy some at $50, knowing it will be a winner for you.
But, for various reasons, the stock starts to go way down. You stay with it, feeling it cannot go below $45. Then, at $40, you can’t believe what a bargain it is. Finally, at $20, having ridden it all the way down, you can’t stand looking at it anymore and sell the stock.
You have to take your losses in relationships, as somewhat cruel as it sounds. But knowing the downside about relationships that sap your energy and your pocketbook can be beneficial to your mental health.
Ask the right questions
Here are the questions almost no one has ever asked me. And they are the key questions to ask anyone who may guide you in money matters:
- What’s your philosophy of investing?
- What has been one of your greatest triumphs in the market?
- What was the decision making that brought you to it?
- What did you learn from the process?
- What about one of your biggest mistakes?
- What went wrong and what did you learn from it?
- What do you own yourself?
- Where do you put your own money?
If they can’t articulate their philosophy in a few simple paragraphs, in plain English, then keep looking. Many people who want to oversee your money don’t have much net worth of their own. I would want a money manager to have skin in the game, to be eating their own cooking. So if they can’t answer the third question to your satisfaction, move on.
Sense of entitlement
If entitlement isn’t your least favourite word, it should be. I went to University with a group of great kids who were successful on the athletic fields and in their social lives, and comfy in their natural sense of superiority. In their belief that life after college would be a continuous party.
For almost all of them, that was their finest hour; adulthood proved to be one disappointment after another. They found it hard to reinvent themselves. Your blessings in early life can give you a very false sense that all of your adult life will be more of the same. It won’t. My father drummed into me, at an early age, one of his favourite lines… Just remember, life is really hard, punctuated by moments of brilliance.
For many years, I have been mentoring students and new small businesses for a municipal small business centre. I see many resumes and plans each year from people of all ages wanting advice. Almost all of them were plain vanilla. Education, work, history. Boring.
A young man who had little luck landing job interviews once showed me his resume. It looked fine, but had absolutely no life to it. I asked if he pursued any hobbies. I’m a black belt in karate, he responded. I got him to add that to his resume. Within weeks, he had a strong response and several job offers from people who, during interviews with him, spent the bulk of the sessions asking about the dedication and discipline it took to become a black belt.
Learning the right lessons as young adults will make a distinct difference. The unusual aspects of your young life can not only enhance and enrich your experience, they can open doors and keep them open. We need to keep our eyes open for them and embrace them in Keeping Life Current.