$250k by 25? On the path to Generational Wealth

I am so excited to share a conversation I recently had with Evy, a fellow personal finance content creator. Evy is a 24-year-old New Yorker working in the finance industry who is absolutely killing it in the financial freedom and wealth building game. Evy has so much to share about her journey from Columbia grad to working woman with an average starting salary who is leveraging her investing knowledge to build an impressive portfolio and set herself up for FIRE (financial independence, retire early).

If you like this article, go follow Evy on Instagram, @themoneysavant, to follow her journey and learn more about generational wealth building. Without further ado, let’s get started!

What are your financial freedom goals and what message are you trying to convey on Money Savant?

I’m Evy and I’m 24, turning 25 next week. I am trying to reach $250k net worth by my 26^th birthday. I think that a lot of personal finance people are big on saving every single penny and tell us we can’t do anything until we reach complete financial freedom and I’m not here for that. I’m focused on building wealth, not just getting rich and I think you can do that and still live a poppin’ lifestyle.

When you graduated college, what were some steps you took to budget or plan out your finances?

My first big decision after graduating was to stay home even though everyone else was getting super excited about looking for apartments. I was raised in New York and I was continuing to live and work in New York. I was looking at rents and I was like “that is a joke”. So, I decided to stay home for two years, but it turned into three.

Number two is that I made a pretty aggressive goal that from when I started work in July to December, I would save $10,000. So, I made that goal and I was like “I have to do it”. And I did it.

How much time and effort does it take to manage your portfolio?

It takes zero time and effort. It’s more of an upfront thing. When I first graduated college, I was spending a lot of time looking at Fidelity because that’s where I have to invest since I work in finance. I spent a lot of time looking at their resources, watching YouTube, and reading Investopedia. I was just trying to figure out what do these things mean. Once you get a sense of it, it’s not that hard. A lot of it is upfront asset allocation. Now, I look at my 401k on a yearly basis and decide if I still want these percentages and if not, I change it and it takes like twenty minutes. Then, someone else (one of my mentors) actually manages my property.

“Once you get a sense of [investing], it’s not that hard”

When looking at my own budget for when I start working, I’ve come across this dilemma of I want a high savings and investing rate, but I’m not totally confident about what my actual living expenses are going to be. With your high savings and investing rate of upwards of 60%, how do you manage liquidity and make sure that you have enough funds available in case of emergency?

Yeah so not all of my money is in my retirement accounts. Most of my wealth is in my retirement accounts, but that being said, I was living at home. What big emergency could I really have where I couldn’t lean on my mom? If I lose my job, what’s the worst-case scenario if I’m living at home? I have to pay my phone bill. That’s it. I think that living at home really gives you freedom to save a lot and you don’t have to be as concerned with unexpected emergencies because you’re not paying huge living expenses. This is also one of the reasons I wanted to switch careers because I wanted to be able to do certain things and save certain amounts. If I did that on my current salary, I would be broke, so I just made more money.

“I think that living at home really gives you freedom to save a lot and you don’t have to be as concerned with unexpected emergencies because you’re not paying huge living expenses.”

So, you mentioned that you switched careers within your company to make more money. Can you talk about what went into the process of switching?

I definitely did a lot of research. I was looking at various things. Out of college and in college, I was so sure that what you majored in matters and internships that you have matters. No, they don’t. Who you know matters.

I found it most useful to leverage my network and meet people, talk to them, and find the right people. I had a lot of conversations. Of course, I was doing research to learn on my own, but I focused on finding the right person to help me navigate this switch.

“Twenty minutes later [after the conversation] I had an interview set up for the following week and I had a new job by the end of that week. I would 100% say it has everything to do with your network”

I was on the job hunt for four months and then I met this person who asked if I’d thought about a certain position. I said that I’d actually been thinking about another one. He told me that he thought the one he mentioned would be better, so he called up a few people and twenty minutes later I had an interview set up for the following week. I had a new job by the end of that week. I would 100% say it has everything to do with your network.

Sometimes people, especially women, are concerned with upsetting the waters or people that they currently work with when navigating an internal switch. Was that ever a consideration for you?

That was no consideration whatsoever. And let me just say, I loved my boss. My boss was awesome and amazing, but at the end of the day I have no loyalty to my job and my boss. You shouldn’t have loyalty. They don’t pay your bills. If they needed to fire someone, you’d be the first to go. They would not be considering that you have your rent to pay, they wouldn’t care, so it’s not their business.

Have you made any money mistakes that you regret?

I definitely have. I was actually trying to build out my real estate business in Baltimore. I ended up trusting a business partner, but things did not go as I wanted them to go and I lost a lot of money. It was nice chunk of change. Even though that happened, I’m still going to go ahead and continue to invest because these things do happen.

Another thing, I usually pay my credit card off in full. I had one instance, though, on my twenty-fourth birthday and I thought I was a rich bitch, and I ran up my credit card to like $4500 or something and I was like, I don’t have this money. I was able to move money around from savings because I didn’t want to carry the debt.

“Especially when you’re 22, 23, 24, 25—even if you lost all your money, you will make it all back and you will have learned a lesson.”

Things like that will happen. You’ll trust the wrong people you’ll make mistakes. The best thing, though, especially right out of college when you’re super young, it doesn’t matter in the grand scheme of life. Especially when you’re 22, 23, 24, 25—even if you lost all your money, you will make it all back and you will have learned a lesson. It will not make the slightest difference in the future. If you’re going to make mistakes, now is the time to do it.

How did you decide to start investing in real estate? What are some pros and cons of real estate investing for twenty-somethings?

I wanted to buy a house in New York. I thought it would be a great investment to buy a house in the Bronx where I’m from because I’m from a low-income neighborhood and the gentrification is happening quick. For one, I live in a mostly Dominican neighborhood. My focus would be to keep my neighborhood black and brown by buying up the block. However, I quickly learned that I do not have the money to invest in New York. Then I looked at New Jersey, but again I didn’t have the funds since I was looking when I was 22. After that, I started to look elsewhere.

So, one, I wanted to take advantage of the development that was going on. I wanted to take control and manage who gets to live in these places. I want to slow down the rate of moving black and brown people from their communities. Second, I don’t want to work. This work thing is for the birds, it’s not for me. So, what are some ways that I can own something that can appreciate and can make me a big enough check now, not in retirement?

“I wanted to take control and manage who gets to live in these [neighborhoods]. I want to slow down the rate of moving black and brown people from their communities.”

You can save in a high yield savings account which will gain some interest, however, when interest rates go down, these go down. Which is fine. It will go back up eventually, but 1% off of $1000 is like $1. Next, you can invest in the market and you can see your dividends and assets grow, but 6% off of $1000 is $60, you can’t live off that. Eventually you will because the longer it grows, the more it will be, but you need 30+ years to live off your market investments.

With real estate, if you can manage it correctly and you buy the right assets it’s a different story. If you have a property (and for easy math) your note on it is $500, your taxes and insurance are $200 and you’re charging rent of $1000. You get to keep $300 and this comes every month. Now, that’s something that can pay some bills. When I think about assets, my savings, assets, dividends, and capital appreciation all just need to reinvest itself because that’s how it’s going to grow. Whereas with real estate, you can actually use that income to live off of.

“When I think about assets, my savings, assets, dividends, and capital appreciation all just need to reinvest itself because that’s how it’s going to grow. Whereas with real estate, you can actually use that income to live off of.”

What are three most important money moves that someone in their twenties can make?

Yeah, so first would be live below your means. I feel like right out of college, when we graduate and then get that first check, we think we can afford everything and get the nicest apartment, but just because you have money doesn’t mean you can do all those things. I also think a lot of people see their salary, say $50,000, and they think they’re actually going to get paid $50,000, but, after taxes, they’re only going to get paid $35,000. So, if you start thinking about that, you’re going to start changing how you live.

Start saving and investing early. A lot my friends don’t like to talk about money and think they don’t need to start doing anything with it yet. I genuinely believe that since I started early, it will make a big difference later on. It’s really important to just start. Start saving, investing, learning about these topics. It empowers you. Even if you do nothing with it, you know. Once you know, you can start making some decisions off of that.

Lastly, pay attention to what you’re spending your money on. Even myself, I do this sometimes. I went on an Uber diet recently because one day I was looking at my statements and realized I had spent like $1000 on Ubers. So, I would say be more mindful or even just get a budgeting app. Spending $1 a day adds up.