I recently turned 23 this past October so I decided to reach out to other personal finance, early retirement, and freedom-seeking bloggers to ask them a simple question:
“Where were you at 23?”
I was curious to see where other bloggers were at financially as well as if financial independence was even on their mind at this age or not. Here are the responses I received:
At age 23 I was getting my butt kicked working in Manhattan for a major investment bank. I shared a studio with another dude, splitting the $1,800 a month rent. The studio was three blocks away from work so I could minimize my travel time since I had to get in by 5:30am! After realizing how brutal the work hours were, I decided to save as much as I could so I could one day retire early and live a more stress-free life.
In retrospect, I’m thankful for having to work 14 hour days early on because it gave me the fire to FIRE. If I got a regular 9-to-5 job, I probably wouldn’t have saved and invested so much to be free.
At 23 I was just finishing grad school and starting my first full time job after college. This is really the time when I started on my journey to Financial Independence and eventual early retirement at age 33. At the time we had just purchased what we thought would be our starter home but ended up being our permanent home. We focused on paying down the mortgage and after 12 years paid it off in full just after I retired. At 23 we had a pair of relatively new paid off Honda sedans that we drove for 13 more years.
Once I started full time work at age 23, I managed to save about half of my income. At first I invested with Edward Jones but soon realized I could gain access to much lower cost investments at Vanguard and made the switch. The focus on saving, investing, paying down the mortgage, and driving the same cars our entire working careers got us to early retirement in our 30’s. You can read more about our climb from zero to millionaire in ten years here.
I was fortunate to finish college at age 22 with no debt thanks to a few wonderful scholarships and several part-time jobs. Then I started med school. I acquired a mortgage and a ginormous student loan all in the same week. I felt sick. But it was good debt, they said…
Over the next four years, that student loan debt quadrupled. I had grown up in a frugal family and those habits served me well, but there were so many zeros that the numbers didn’t even seem real.
There are some life paths that are very difficult to pursue without acquiring student loans. If that’s the only future you can see for yourself, go for it with gusto! But live frugally and pay off your debts the moment you’re able. The fancy car can wait. You’re actually buying back your freedom to live by your values and choose your priorities. Remember to care for yourself and your family because life can be short, and if you don’t, those are the things you’ll regret the most. If you’re healthy and happy, you’ll be of so much more service to the world than if you aren’t. Choose what’s important to you and hold it tight. Best of luck!
At 23 I didn’t know anything about anything relating to money, other than I REALLY wanted a lot of it and I was hoping it would magically come some how without much work on my behalf 🙂 Now – over 10 years later – I’m thankful that not only have I started paying attention to my finances and grown my net worth from around $20,000 to over $500,000, but that I *appreciate* what money can do and no longer chase it just to “be rich,” but more to gain *freedom*. The freedom to, ironically enough, never have to think about money again if I don’t want 🙂
At either rate, if you’re in your early-mid 20s right now and on this blog reading this sentence – GOOD JOB!!! You are smarter than 90% of the world out there who sometimes never figure it out! Keep reading $$$ blogs and working towards your dreams.
At 23, I was dealing with two maxed credit cards, renting a place I could not afford, and struggling at a job in a toxic workplace. I decided to make a change, ended up receiving a full scholarship to go back to school, and completely changed my life. Since then, my financial situation has been the thing I care most about in my life. Sometimes a drastic change is all it takes to realize what you need to make you happy.
At 23 years old, I was completely broke. Two years prior, my mother committed suicide, I dropped out of college, and received an inheritance (from my grandmother) of about $60,000. By the time I was 23, however, I had wasted all the money. I was also unemployed. Oh, and I had student loan debt that had breached $30,000. Personal finance was definitely not on my mind. And I wouldn’t start my journey toward early retirement for another four years. But hitting rock bottom means you can only go up. And great things can and do come from very humble beginnings. I never lost hope. And I never gave up my optimism.
At age 23, I was in a confusing place. I had started my blog around 1-2 years before then, and was struggling between working at the job I disliked or leaving my job for the blogging business that I had created and love. I also had debt, student loan debt, and was graduating with my Finance MBA. It was a whirlwind of a year, and by the age of 24 I had fully paid off my student loan debt and left my day job as a financial analyst to blog full-time. It’s crazy how much life changed in just one year!
Fritz from The Retirement Manifesto started his career immediately after college (@ 22), and by Age 23 had just made his first corporate relocation from Ohio to Texas. He was living in an apartment, and was saving aggressively for a down payment on his first home, which he would buy one year later. He was saving 20% of his pay, and attributes this early aggressive saving as the #1 reason why he’s now looking at retirement by the age of 55.
His advice to folks in their early-mid 20’s, “Live like you’re still a broke college kid. Spend less than you earn, and automate your savings. Avoid debt, don’t buy it if you can’t pay in cash (yes, that means you’ll have to drive that old college clunker a few more years). Avoid lifestyle inflation, and save 2/3 of every raise over the next 10 years (e.g., if you get a 3% raise, increase your savings rate by 2%, and only let 1% additional flow into your checking account). Get it right now, while you have the power of time and compounding to work for you. Don’t make excuses, no one cares about your personal finance situation more than you do, now is the time to take ownership. You’ll lean back when you’re an old man like me (53) and be very, very thankful that you took the right steps when you were in your 20’s.”
At 23 I was in law school. While I had no debt from college, I did start borrowing for law school and finished with $55,000 of school loans. This was in 1992, so that debt today would easily be north of $100k. My wife and I have done just fine since then, but I wish I had handled my finances differently. We could have finished school with much less debt if I had been better with money back then. I guess the good news is that we call all make financial mistakes, learn from them, and then succeed.
The day I turned 23 was 18 days after arguably the worst day in US history – 9/11/01. A week after my birthday, I was set to leave for for Dallas for 5 weeks of flight attendant training which meant I had already quit my job and sublet my apartment. When 9/11 hit, all training classes were put on an indefinite hold, leaving me reeling with not only grief for our country and it’s people, but a shameful amount of selfish worry in regards to my future since the airline industry was now in complete disarray. My worries were unwarranted. Once the dust settled I was called back and given a new start date 2 weeks later than the other and, without caution, officially jumped head first into the crazy circus act I call my job. Steady paycheck, unstable lifestyle…everything a 23 year old wishes for! I could travel, afford my own place, and even save! Life was awesome…but what I didn’t realize was how quickly that could change.
I was blissfully unaware that I was on the cusp of the biggest financial disaster, I can safely say, I will ever be in for the rest of my life. In a year I would buy my first condo. A year later I would sell it and buy another in the city…you know, to be closer to friends and all the fun the city promises a 25 year old single gal. Within the next 3 years I would buy 2 more condos and 2 years after those, I would buy a house. The tale is twisted and sorted, as one can imagine, but in total at 33 I woke up in 500k of mortgage debt and my world collapsing all around me. I went from crazy happy with a new job and posse to deeply depressed with an elephant’s weight of debt crushing the breath right out of me. And all it took was 10 years…. Today I am 38 years old. Now that I am completely over it, financially and emotionally speaking, I have realized what a difference 5 years can make!! All of the pain, shame, and financial stupidity I endured has made me a stronger, richer, and more compassionate person. If I could go back and tell myself one thing at 23, it would be that building wealth takes time. Go slow. DO NOT LEVERAGE YOUR CURRENT INCOME AGAINST THE FUTURE. There are too many outside factors at work that you can’t control. And if you do find yourself in my position 10 years later – there is hope. Keep your head up, dig your heels in. You got yourself into it and you can get yourself out of it. 😉
At 23, I had just graduated from college and moved back home with my parents. It was a pretty sweet time in retrospect. I had no rent and barely any living expenses other than the cost of going out to bars and restaurants with my buddies. I graduated college in the midst of the financial crisis, so like most people my age, I couldn’t find a real job. Instead, I worked about 60 hours a week making basically minimum wage between two low wage jobs. Things like Uber and Postmates didn’t exist yet. If they had, I’d totally have done those gigs instead of working regular jobs. A big bummer was that I didn’t know anything about money. If I had, I’d probably have tried to save some money in a Roth IRA, especially since I could’ve bought on the cheap.
In 1999, Blink 182 had a hit with What’s My Age Again, the one that goes “Nobody likes you when you’re 23…” I was 23, and unliked, apparently. I had managed to graduate from undergrad debt-free thanks to a full-tuition and other scholarships, and a bit of a college fund set up when my grandfather passed. I finished my first year of medical school and started year two that year. I was starting to take on debt for the first time in my life, and it stayed with me for nearly fifteen years. It was good debt, though, as it allowed me to become a physician. With a doctor’s salary, I had no trouble paying off those student loans.
At 23 I definitely was not thinking of Financial Independence, but I would say I was sort of on the right track. I was in my second year of working after graduating, and had relocated which meant that I needed to sort out my own housing and car.
I did some things right:
- Bought the cheapest car which would meet my needs
- Had a lift club with some colleagues, which meant I only drove to work every third or so week.
- I ran a strict monthly budget every month and I was pretty good at sticking to it, often ending a month under budget
- I didn’t spend a lot at all, and any money left over at the end of each month was put into my car loan with the goal of squashing it asap.
- Rented a very cheap Granny Cottage – so cheap that I had to walk out my lounge, across a little patch of grass and into a separate building to get to my kitchen. But hey I was a bachelor… 🙂
Some things I did wrong:
- The cheap car from above was bought new (I wish I bought a second hand car rather)
- The money I was paying extra “into my car loan” was actually just going into a linked savings account, I didn’t know that I still needed to then transfer that money from the savings account into the car loan. I only found this out around a year later when I wrote the car off and needed to settle the loan with the insurance money. A stupid oversight on my part, and yes maybe the banker who set up the car loan didn’t give me all the information, but I also should have been checking!
I think I had all the right ingredients going for a Early Retirement Cake back then, but I was kinda stuck just going through the recipe without focusing on what the cake might look like. I was spending and investing wisely, and my priorities were right, but I didn’t even really know what financial independence was back then and so I didn’t really have an end goal to focus on. So for you to be thinking about it at such a young age makes me believe you are on the path to greatness. You deserve a pat on the back for that!
I want to thank all the bloggers who participated in this post and were willing to share where they were at financially at 23 years old. It’s fascinating to see the wide variety of experiences and circumstances everyone was in, as well as some of the mistakes and lessons they learned along the way. I think it proves the point that there is no cookie-cutter path to financial independence and it’s certainly possible to get back on the right track financially despite how many mistakes you’ve made.
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Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.
Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
Although the bulk of his net worth is invested in index funds, his favorite place to invest in individual stocks is M1 Finance, a site that allows you to build a custom portfolio of stocks for free.
His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.
His favorite micro-investing app is Acorns, a free financial app that takes just 5 minutes to set up and allows you to invest your spare change in a diversified portfolio.
His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.
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