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7 Financial Moves To Make In The First Decade Of Your Career

Maximize chances of long-term success and start making powerful financial moves.

Early on in your career, you’ll likely be focused on establishing connections, developing your skillsets, and cultivating the right mindset to succeed long-term. You’ll also be focused on getting through your job one day at a time – especially if you don’t have much experience or a background in this area.

But if you want to maximize your chances of long-term success, you’ll need to think beyond those factors and start making powerful financial moves.

What are the best financial moves to make in the first decade of your career?

Important Financial Moves to Make

These financial moves are some of the most powerful and impactful ones you can make in the first few years of your career development:

1. Pay off your debts (especially credit card debt). Try to pay off your debts as soon as possible, and prioritize debts with high interest rates. Compound interest (which we’ll discuss in the next section) can work in your favor or against you, depending on whether you’re earning or owing the interest. The longer it takes you to pay off your debts, the more money you’ll pay in interest and the less financial flexibility you’ll have – so make them a top priority.

2. Put together a budget. In line with this, put together a strict budget. Jot down exactly how much money you’re making each month and detail your necessary expenses, like housing, utilities, and groceries. Then, limit your spending so you end up with a surplus every month; if you have trouble making ends meet as things are now, take a closer look at how you can cut expenses or generate more money.

3. Set up an emergency fund. Emergency funds serve as a layer of financial protection, giving you a buffer in case you incur unexpected expenses. Most people only need a few thousand dollars to get them through these tough times, so as early as possible, you should save up this money and set it aside.

4. Start investing. Next, focus on making some smart investments. One option is to invest in the stock market, prioritizing valuable long-term holds with a minimal risk profile; if you want to diversify your holdings, consider a broad-market exchange traded fund (ETF), which can help you invest in many different companies and industries at once. You could also invest in property, capitalizing on rent as a separate stream of income, if you have sufficient capital to fund this purchase.

5. Set a course for learning. Consider investing in your own education, whether you go back to school or just attend more workshops and training opportunities within your business. As you develop more skills and earn more knowledge in your chosen field, you’ll increase your earning potential indefinitely.

6. Establish multiple streams of revenue. Establishing multiple streams of revenue is one of the best financial strategies to adopt, since it allows you to multiply your earnings and reduce your risk profile at the same time. There are many different ways you can establish multiple streams of revenue, such as by picking up side gigs, looking into passive income opportunities, or just investing in certain assets.

7. Accelerate your savings. Pay yourself first by prioritizing your savings. Strive to set aside at least a few hundred dollars every month. As you accumulate more savings, you can invest them in your retirement fund, divert them to other funds (such as saving up for a down payment on a house), or just create a bigger buffer in your emergency fund.

The Value of Starting Early

Unfortunately, most people don’t think about making long-term financial moves until they’re closer to retirement. But the earlier you start, the better – and for three key reasons:

Compounding. Starting early gives you more time to take advantage of compound interest. In case you aren’t familiar, compound interest refers to an interest rate that accumulates exponentially over time; if you earn a fixed percentage of interest on a sum of principal, and you reinvest that interest, the amount of interest you generate per year will increase as your principal grows. The longer this engine runs, the more value you’ll get – so starting early should be your priority.

Risk. Younger people have much more risk tolerance than their older counterparts. If they suffer significant losses, they have plenty of time to make up for those losses later on; as you get older, you’ll have less and less financial flexibility.

Opportunities to learn. Would you rather have 40 years of investing experience or 10 years of investing experience? The choice is obvious. Starting your financial planning early gives you more time to learn and cultivate experience, ultimately making you a better investor by the end of your career.

You don’t have to make all of these financial moves, nor do you have to start making them immediately. But it’s a bad idea to wait years before laying the groundwork for your financial future. The more momentum you generate early on, the happier you’ll be when you start creeping closer to retirement.

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