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5 Money Principles Every 20-Something Must Know

Being in your 20s is exciting—but it’s also the most critical decade for shaping your financial future. Apply these five principles early, and you’ll accelerate your journey to independence and long-term wealth.

1) Buy Assets, Not Just Lifestyle

The poor spend their income on basic needs. The middle class often channels money into liabilities—cars, gadgets, credit cards. The wealthy, however, prioritize buying assets that generate income: rental properties, dividend stocks, and bonds. Their money works for them, creating cash flow month after month.

2) The Oil Well & Fuel Tank Analogy

Think of your finances as two accounts:

• Oil Well (Investment Account): Your money machine. Invest here for growth—stocks, businesses, or other assets that compound over time.
• Fuel Tank (Operational Account): Used for monthly expenses like food, bills, insurance, and transport.

To stay secure, maintain 5–10 months of expenses in your fuel tank. Everything else should go into building your oil well. The larger your oil well, the stronger your financial independence.

3) Invest in Yourself First

Your biggest asset is you. NBA star LeBron James spends over $1.5M annually to keep his body in peak condition. Tech leaders invest in higher education, skills, and networks. You should too: take courses, attend seminars, and develop marketable skills. Unlike material goods, knowledge and skills can’t be stolen—and they deliver the highest lifetime returns.

4) Choose Your Circle Wisely

Your financial habits are shaped by the people you spend time with. Surround yourself with peers who value saving, investing, and growth. If your circle is full of spenders, chances are you’ll spend too. If your circle is disciplined investors, you’ll absorb their mindset and behaviors.

5) Stocks Beat Other Assets Long-Term

Over the last 30 years, stocks have outperformed bonds, property, and gold. By buying shares of strong businesses, you essentially become a co-owner. Think of BCA in 1996—Djarum Group’s investment generated massive returns simply by trusting competent management. The key is choosing companies with strong brands, healthy margins, low debt, and ethical leadership.

Practical Checklist for Your 20s

• Set up two accounts: one for expenses, one for investments.
• Build an emergency fund worth 5–10 months of living costs.
• Commit to learning: invest in courses, certifications, and mentorships.
• Audit your circle—are they pushing you forward or holding you back?
• Start small in stocks—focus on businesses you understand.

“If you don’t own assets, you’ll always work for money. If you own assets, money will work for you.”

Conclusion

Your 20s are the launchpad for your financial life. Focus on assets, discipline, self-growth, and the right community. Combine these principles, and you’ll be decades ahead of your peers. Share this with your friends—you might just change their future too.

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Label: Finance

References / Sources

• Umur 20-an Mesti Tahu 5 Prinsip Uang Ini: My 2.7M View Bukatalks (Update) — Channel: FellexandroRuby — Original video