Do you ever wax nostalgic about “what could have been if only you had known ___________”? While I don’t think it is helpful to dwell on mistakes or routes taken in the past, I do think that we can learn through reflection. And maybe we have some college readers out there for whom my reflections will be helpful to. (Definitely leave a comment if that is you!) Here are three things I wish my freshman year of college self would have known to put me on a faster track to financial independence and off the rat race!
1. Start a business now.
It is never too early (or too late for that matter) to start your own business. I had thought of myself as the kind of person who was too risk averse to sink thousands of dollars into something that wasn’t proven. What college student has five, ten, or twenty grand lying around? But what I didn’t realize is that there are plenty of businesses that I could have started that would have a decent chance of some success and I many of those don’t require much capital. Dan Miller, career coach and author of 48 Days to the Work You Love, has a great little book with various ideas. You can also check out The $100 Startup by Chris Guillabeau if you need some ideas. (I don't endorse lemonade stands - unless you have a primo location by a major sporting or events center!)
I actually thought that I would be more successful in the long run trying to play the career game and relying on someone else for a paycheck. Now that I’m older and went through painstaking efforts to launch my career in the height of the Great Recession, I know better. The best person to take care of me is… me.
Even if the business I launched wasn’t highly successful, I would have started learned earlier on from trial and error. Lesson learned. Start a business.
2. Invest as much as you can!
I was fortunate to have started investing in an IRA before I even started college. But I wish I had fully grasped the time value of money and really understood how valuable $100 invested at age 18 versus $100 at age 30 would be when I hit 60 years of age. (Can you do the math? Check your answer below – assume an interest rate of 10%)
If I had the same goals then as I do now, I would not have squandered so much on eating out, coffee, clothes, and often full-price books. Heck, I may have even found a way to tolerate living at home and investing what I would have paid on rent and utilities! I never imagined there would be a way to stop living my life for others, and start living my own dreams at an early age, through just investing as much as possible as early as possible.
This is a little bit at odds with tip #1 – investing in passive assets like mutual funds versus active ones like a business – but I think both should be done, no matter how old you are.
3. Find an entrepreneurial and successful mentor.
I always knew in the back of my mind that I would like to have a mentor, I just didn’t know who and how to ask. I found this especially challenging given that I didn’t know many entrepreneurial women, and I would have liked to make a connection like that.
I know now that older, experienced people enjoy sharing their knowledge with younger people. (Okay, that’s a generalization, but for the most part I think that is true.) You don’t need to focus on a specific age to find someone “qualified” to be a mentor, but success and experience usually (not always) coincide with older age.
Now you might be wondering Is she going to say “don’t go to college!”? Nope. My college education and experience was highly valuable to me, and without it I would not have launched into a profession that is personally fulfilling, pays relatively well, and has a healthy work/life balance. For some people, going to college does almost nothing to help them obtain the knowledge, skills, and experience to be successful in the world because they are either in the wrong degree program, the wrong college, or don’t need college to do what they are interested in. So for those people, I hope society does not treat you with snobbery because you are a college “dropout” – let’s call them college opt-outs – or did not attend at all. College is not for all and is not a prerequisite to success.
Answers to Future Value of $100 over 42 and 30 years at 10% rate of growth:
$5,476.37 – 18 years old to age 60 (42 years)
$1,744.94 – 30 years old to age 60 (30 years)
Now what if it had been a $10,000 investment?