3 Big Lessons I Learnt Building Wealth in My 20s

Increase Your Value at Work

Look for opportunities to expand your skill set and make yourself more valuable to your employer. 

This could involve learning new technologies, improving communication, or developing leadership skills. 

The more value you bring, the more you can negotiate higher compensation.

Understand Wealth-Building Fundamentals

Master the core concepts like compound interest, asset classes, and financial modelling. 

Having this foundational knowledge gives you the framework to make informed investing decisions.

Use Spreadsheets and Financial Modelling

Even basic spreadsheet skills allow you to analyse potential investments, model future returns, and quantify risk. These are essential tools for any successful investor.

Negotiate Contracts and Value Your Worth

Know your skills and contributions, and don’t undervalue yourself. Hone your negotiation tactics to ensure you receive fair compensation for the value you provide.

I wasted too much time on activities that didn’t add value. While there’s nothing wrong with having fun, balance it with investing in yourself. 

Understand which skills will have the highest return on investment and double down on acquiring them. 

You have the luxury of time in your 20s, even if you lack money. Use it wisely.

Lesson #2: Understand the Power of Compounding 

In my 20s, I had a total fixation on what I could invest in without fully grasping the fundamentals. 

I wish I had spent more time deeply understanding the concept of compound interest early on. 

Compounding is when you earn interest on your interest, creating exponential growth over time.

Even small, consistent investments can snowball into a fortune, thanks to the power of time. 

Here’s an example to illustrate: 

Imagine you’re offered $10,000 today or a single penny that doubles in value daily for 31 days – which would you choose? 

Most would take the $10,000, but that penny compounding daily becomes over $10 million by day 31!

When I finally grasped how compounding works in the real world, it blew my mind. 

I realised that even modest investments can compound into life-changing wealth with patience and consistency. 

The key is starting early and letting time do the heavy lifting.

Small, consistent actions compound. I never earned a huge income, but with patience, I built significant wealth by letting compound interest work its magic over decades. 

Time is the key ingredient – start early, and you may not have to work as hard or as long.

Lesson #3: Take Calculated Risks

Looking back, I realise I was born a pretty timid, conservative person. 

When I hit my 20s, I wanted a good relationship with money, but I didn’t grasp that it was the prime time to experiment and take risks.

With no kids, family, mortgage, or major responsibilities, my 20s were the perfect window to try new things and push my comfort zone. 

I genuinely believe that combining investing in skills with applying them through small, calculated risks is the winning formula.

Start by taking small risks with small amounts of money. Measure the results objectively. Don’t fear setbacks – they are part of the journey. 

As long as your wins outweigh your losses over time, you’re on the right track.

My mentors taught me that if you’re not losing sometimes, you’re likely not taking enough risks and, thus, not gaining enough. 

The goal isn’t to never lose, but to ensure your wins outweigh your losses.

Master the art of the comeback. How you respond to losses and challenges defines your long-term success. 

Reflect on both wins and losses to continually evolve as an investor.

I wish I had understood this mindset in my 20s. My conservative nature kept me from taking the calculated risks that would have accelerated my wealth building. 

But pushing your comfort zone and thinking big is never too late. Small steps today compound into giant leaps over time.

Building wealth takes patience but also urgency. Have a plan and take action. 

The habits and mindsets you build in your 20s will determine your financial trajectory for life. There is no perfect path, only your path. 

Walk it boldly.