2020 is surely an unforgettable year, not just because of the surprising entrance of the coronavirus pandemic but also because of how banks cope with it. Central banks all over the globe printed insane amounts of cash, injecting trillions of dollars into the economy. This crazy move led to inflation.
Some experts don’t really believe that hyperinflation is happening, but Jack Dorsey, the founder of Twitter, presumes otherwise. The inflation record peaked in 2020, and Dorsey made his statement saying, “Hyperinflation is going to change everything. It is happening!” Several professionals have also warned people about its coming emergence.
Despite the fact that both oppositions are opinionated, what’s happening now clearly shows that it could actually happen. And we should take it seriously! It could, perhaps, bring more serve damage than the economic decline during Covid-19.
The reign of the dollar will end the very moment that people begin losing faith in it since no valuable asset backs it other than people’s support. Although we have no individual power over inflation, we certainly have control over our money.
While inflation is still not at its highest percentage, make your utmost effort to invest your money that will rise together with inflation. To kick off your financial expedition on the right track, there are particular money traps that you should avoid while you’re still in your 20s to be financially free. Keep your eyes on the screen!
Avoid gambling
You’ve probably heard the Korean hit series Squid Game unless you’re living under the rocks. If you looked deeply at the lesson it was trying to impart to viewers, you would realize that it’s trying to depict a person’s will to find the quickest way to wealth.
Hopelessness drives us to believe that we can take the ‘shortcut’ to wealth if we bet on the right horse, the right team, or whatever it is you are betting. However, the shortcut route isn’t for everyone.
Winning a high streak is only for the lucky ones. The probability of winning the uncalculated risk is only one in a thousand or even one in a million. This only means that you’re more likely to lose than win in gambling or betting.
Hence, no matter how sweet and enticing this get-rich-quick path looks like, avoid taking this path. Real wealth takes big efforts.
Avoid sacrificing your future for today’s sake
Never ever do things today that will negatively impact your life in the future. This trap is where most young people fall into. We want instant gratification. We want to enjoy life “today,” without thinking of the cost we need to pay 5, 10, or 15 years from now.
But here’s the question you should engrave in your mind: enjoy little today and enjoy a lot later?
Sacrifice yourself now for the future ahead might not make sense when you look at it at the surface, especially when you know that life is not guaranteed, and you can run out of breath anytime soon. Nevertheless, it would help if you also considered that spending money isn’t the only way to enjoy yourself.
Enjoying “now” doesn’t mean splurging money on things that give you temporal happiness. You relish what you have today simply by spending time with your friends. If you would only look back at your childhood, you would realize how much fun you had with your playmates just by doing superficial random things. You could still live like that in your 20s!
Even without a single dollar in your pocket, you could enjoy watching television with your friends, playing your favorite card game, or chit-chatting on spontaneous topics.
Or, if you don’t just want to enjoy your 20s but also make the best out of it, you can develop skills that will help you land outstanding projects in the future. You could also enjoy your hobbies and learn things you have always wanted to understand.
Avoid satisfying your earthly urges by spending money on trivial things.
Don’t stop yourself from learning new technologies
Not learning anything new, especially technology-related stuff, is one of the biggest mistakes that today’s people make as they get older. As we enter the elderhood stage, it gets quite difficult to use difficult-to-navigate gadgets.
In the past five decades, the world has drastically changed, having wealth transferred from one generation to another. Would this scenario probably be a repeating cycle in the years to come…or not? What am I trying to point out by saying this?
Families who have inherited the fortunes of the richest man in America are slowly losing their fortune. Yet, college dropouts like Mark Zuckerberg are continuously reaching new heights.
The difference between the two is that one kept on living under his father’s wings, while the other knew how to take advantage of the emerging technologies. If you stop learning the moment you get a little older, you will lose.
If you want to make a lot of money in the future, keep learning and don’t set yourself apart from curiosity.
For instance, the new arising technology is blockchain, and new cryptocurrencies are exponentially growing. Rather than ignoring these two because you have no single idea about them, you should try learning about them instead. This way, you’ll open up a lot of opportunities for yourself ahead.
Avoid being impatient
Impatience can hold you back in many different ways. It’s surely not a good character trait to have.
For instance, you know your original goal is worth sticking to. However, you wanted to take a shortcut to get where you wanted to be, so you switched goals and received less reward. Or, although you stick to your original goal, you’re still constantly looking for alternatives, which causes distraction from your work.
With impatience, your life will be filled with second-guessing, unnecessary agitation, and bad decisions. That is why you need to push yourself to become patient.
Let’s take the stock market as another example. The stock market is volatile and often fluctuates. Prices go up and down in just a tickling of a clock. The thing here is, you cannot buy stocks and expect yourself to become a millionaire the next day. You have to wait patiently for your funds to grow.
A patient investor would hold his stocks even when prices fall down and wait for the market to recover and stand on its foot again, giving him good margins in the long run. An impatient investor would immediately sell his stocks while panicking when stock prices seem to decline, earning nothing but losses.
Bitcoin has plunged several times, and every time it does, it reaches a new milestone. Those who have held on all those times profited a lot. However, being patient doesn’t guarantee investment growth. Analyze the stock and see if it’s also worth waiting.
Never ever invest all of your money
It’s no secret that investing is really awesome. But keep in mind that life is unpredictable, and anything can happen in a blink of an eye. Things could go smoothly today and go south tomorrow.
If you put up all your money in an investment without leaving cash at hand, you’ll end up acquiring debts that interests way higher than what your investment can generate in case an emergency happens. Hence, having an emergency fund before kicking off in the investment world is essential.