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Why You Need To Stop Worrying About Saving Money

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If you’re a young professional and you have grand ambitions of having a wildly successful career, saving money should be the least of your worries right now. You’ll have plenty of time to max out your 401K, invest in the stock market and build your nest egg after you figure out what you want from your career and how you’re going to get it.

So, what should you be worried about now, while you’re in your 20s?

Learning and discovery.

As a recent college grad, your most important job is to learn as much as humanly possible, gain as many critical and desirable skills as you can, and discover what you’re good at and what you love to do every day.

The old model for managing your young professional career was to start on the bottom rung, put your head down, pay attention and get a few promotions. Eventually you’d work your way up the ladder and all would be good – you’d retire with your gold watch after 30 years. That’s not the case anymore.

Today, the safest job you can have is to be self employed. If you’re self employed, you have complete control, you’re not at the mercy of a corporation. Today, the most successful young professionals have a full-time job, a side project, and a commitment to constantly learning new skills that will lead to countless money making opportunities in the future.

The most at-risk young professionals are going through the motions. They’re working 9 to 5 at a single job, leaving any kind of learning and work at the office and never thinking about the skills they are acquiring. These are the people who are also worrying about saving money instead of investing in learning new skills. When downsizings come, everyone’s at risk of losing their job, but the people who are going through the motions are the ones who will be in big trouble when they’re cut.

In Thomas Friedman’s interesting New York Times piece, “The Startup of You,” he points out that the top companies are now smaller and more nimble than ever. Facebook, Twitter and LinkedIn are hiring considerably fewer people than major companies were even 20 years ago. On top of that, everything can be automated, and companies aren’t hesitating to automate. Bottom line: if you don’t have a unique skill set, you’re in big trouble.

Friedman says that professionals today need to think of themselves as a startup. I love this analogy because when successful startups first get off the ground, they are obsessed with learning and discovery while they try to find a business model – just like a young professional needs to be obsessed with learning and discovery while they try to find a career path.

What Friedman misses in his article, however, is that for the most successful people, your twenties are the time where you really need to think of your career as a startup. Your later years are when your career should be much more like a fully functioning company. When you’re 40 or 50, you should know what your good at, you should absolutely be worried about making and saving money as much as possible and you should be a well oiled machine. You want to be like Apple or Google at this point, you don’t want to be like a startup!

Here’s the thing. If you don’t start learning and discovering your skills, strengths, likes and dislikes in your twenties, you’re going to be behind the eight ball. If you take the old advice and spend your twenties worrying about things like saving a lot of money and what you’re going to do when you get out of work at 5 pm, then you’ll probably be worrying about that 401K and that savings account for the next 50 years. If you spend your time learning and discovering the right career choice for you, working your ass off to make it a reality, and if you always keep your eyes open for new opportunities, I guarantee that you will watch your savings account magically grow beyond your wildest dreams.

Ryan Healy is the co-founder of Brazen Careerist where he is the COO. He was recently named one of Worth Magazine’s 20 Entrepreneurs To Watch.

Brazen powers real-time, online events for leading organizations around the world. Our lifestyle and career blog, Brazen Life, offers fun and edgy ideas for ambitious professionals navigating the changing world of work.

  • Jrandom42

    You still need to worry about saving money, for those emergencies like the dead car, the surprise injury or illness, or something as mundane as lost luggage, crushed smartphone or stolen laptop.

    You may think you have plenty of time for filling that 401K, but time runs fast, and unless you get in the habit of contributing substantially and regularly, it often never happens. And the only way to significant savings for the 401k is compounding interest and time.

    • http://twitter.com/RJHealy Ryan Healy

      JRandom, agreed you need an emergecy fund and you need to budget these “extras” into your monthly budget as well. Also, compounding interest can make a big difference, but the point is that the compounding interest you make on a couple grand per year from 22 to 30 can’t match the amount you’ll be able to make and save in your 30s and 40s if you’ve figured it out and have a career you love that is paying you extremely well.

      • Jrandom42

        Again, you MIGHT have a career that pays extremely well in your 30s and 40s, but right now, with all the uncertainty around economic conditions now, is that really the smartest chance to take? I understand taking an optimistic outlook, but how many rosy economic predictions have come true? And is it the wisest course to stake your future on it with no fallback?

        In any sort of prognostication, you have to account for Murphy’s Law. And don’t forget O’Toole’s Commentary on Murphy, which states, “Murphy was an optimist.”

      • http://twitter.com/jasonhparker Jason H. Parker

        Can’t you do both? The point Jrandom is making (I believe), is that when you’re contributing to a Roth (and by the way, that’s the best way a YP, especially an entrepreneur can fund their retirement account) or 401(k), even if it is just $100 a month, teaches financial discipline, and that is the most important thing for future financial success.

        To address compounding interest, you can figure out for yourself how powerful it is. Use any number of investment calculators and see what happens if you contribute just $200 a month starting now and stopping when you’re 40 verses maxing out your accounts starting when you’re 40.

      • http://entryleveldilemma.blogspot.com Edward – Entry Level Dilemma

        “have a career you love that is paying you extremely well.” But that is never a guarantee following the “do what you love BS”…unless you love being a banker.

        Also, if you sock away $10k in your twenties (I didn’t even manage 1k), over the next 40 years that’s over 40k even if you only manage a 3.5% rate of return. 8k if you get the historical 7% rate of return.

      • Kaci Lindhorst

        Great advice, Ryan.

    • Kathryn Smith

      Enjoyed the article, but thank you JRandom for the counterpoint that also happens to voice my own doubts about it. Agree with the principle that we shouldn’t sideline professional growth and gaining new skills, but that doesn’t mean we don’t need to be financially responsible.

  • Anonymous

    This paragraph is my favorite: “Today, the safest job you can have is to be self employed. If you’re self employed, you have complete control, you’re not at the mercy of a corporation. Today, the most successful young professionals have a full-time job, a side project, and a commitment to constantly learning new skills that will lead to countless money making opportunities in the future.” I could not agree more, and this is what every college should be teaching/impressing upon their seniors before graduation.

    I would add that I agree with JRandom. While you definitely shouldn’t be focused only on money and salary entirely, using your side project to pad that emergency fund is key. It can keep you from taking the kind of job or outside partnership that you don’t want but have to because your bank account is empty.

    • http://twitter.com/RJHealy Ryan Healy

      Thanks, Noel! Definitely agree that colleges need to teach this, it takes people a couple years after school to fully realize this. It would be such a help to learn it at school. Also agree about the emergency fund, thought I view that as slightly different then saving for the long term.

    • http://entryleveldilemma.blogspot.com Edward – Entry Level Dilemma

      I was self employed for 7 years. I nearly starved.

  • http://twitter.com/MsQuarter Mandi Lindner

    Thank you for rationalizing my current pro life! In all seriousness, it’s exciting to see so many of my peers heading toward entrepreneurship. I was blessed to attend a business school that offers a major in this and was taught by venture capitalists and business leaders (public school, check it out future college students! http://www.csom.umn.edu). I’m sick of opinion articles like CNN’s http://bit.ly/orWvVD that label Millenials lazy and entitled when, in fact, many of us are working our full time jobs, getting our Master’s part time (or self-learning new skills), AND delving into new, possibly profitable, ventures. With pensions and company retirements all but a thing of the past it’s important for young professionals to have a plan, but in the ever-changing technological clime it’s not the most important thing to focus on in your early career.

    • http://twitter.com/RJHealy Ryan Healy

      Agreed, its great to see so many people starting things up, and doing their own thing. With pensions and traditional retirement being a thing of the past, people need to get on board with the new way to work! I see a lot of people our age who really get it, so that is great to see.

      • http://justtoological.com/ Chaalz

        Please show me where you get “traditional retirement being a thing of the past”.

    • http://www.facebook.com/people/Jacob-Marek/696640989 Jacob Marek

      3 cheers for CSOM alumni!

  • Michael H

    The other interesting thing about being a young professional is college debt. I think it’s hard to argue that anyone will be better off trying to amass significant savings (beyond a little emergency fund) until they’ve taken care of that college debt which is always racking up interest.

    • http://twitter.com/RJHealy Ryan Healy

      Very true! College debt will be the biggest challenge of our generation. It will be interesting to see how it plays out.

  • http://pulse.yahoo.com/_I5ZVUNX4WSDTYCSQZW42S64LSI Justin K

    Long comment, thanks for sticking through this one:

    I tend to agree with what is posted on Brazen, but I have some questions about this article that somewhat counter what is implied here. I agree with the article as a whole – learning now > saving now. However, am curious about these side-projects you mention, and their role in “success.”

    A little background: I have a relatively fun job, probably the most glamorous (used lightly) one I will have while working for someone else. It uses many different skills, allows me to manage myself and many of my work responsibilities, and my employers believe in personal and professional development and are willing to fund it fairly generously. That said, it is somewhat low-pay and takes different time commitments throughout the year. In the fall, I spend nearly every waking weekday moment at my job (traveling domestically) and many weekends working at least 5 hours per day. In the winter and early spring, I spend about 11 hours per day. Late spring, about 8 hours per day. Summer, about 6 hours per day.

    I would love to have a side-project. As a matter of fact, I have ideas constantly flowing, especially in the fall when I spend ~3-4 hours per day driving. However, time is a major challenge, both in general and with the fluctuations in my schedule. In your opinton, is the purpose of a side-project to bring in money or to develop professional skills? With the demands of my job, I am developing a lot, but it is not generating an extra income.

    Also, more on a philosophical level, I question your definition of success. Sure, we are presumed to be high-aspiring young-professionals because we are reading this blog post. That doesn’t mean we all define success in the same terms, or even that one person would define success the same way two different days in the same week. Can you elaborate more on what you consider success for the purpose of this article?

  • http://firstgenerationwhitecollar.com/blog L. Marie Joseph

    I say do both! Save and hustle. I do understand you have to take risks. Being mediocre will never get you rich

  • Suria25

    “As a recent college grad, your most important job is to learn as much as humanly possible, gain as many critical and desirable skills as you can”

    Actually, in any functioning society (not ours) your most important job as a GRAD is to use the skills you just paid for to generate wealth and a standard of living for yourself. Again in a functioning society (not ours) a grad would have a reasonable chance of gainful employment and wouldn’t have to “begin learning as much as humanly possible” after half a decade or more of expensive schooling. If “college / uni” didn’t give you these so called critical and desirable skills. Why did you go? It’s not a rite of passage. It’s a place to buy the training to get employment.

  • Banking Analyst

    Why are savings and “learning and discovering your skills” described as opposites here? Reading between the lines, it sounds like Ryan is suggesting that 20something professionals should basically allocate more $$$ to learning (e.g. I’m working on earning an accounting designation) rather than to traditional savings. If I have that wrong, then please clarify.

    What exactly are you suggesting that young professionals do instead of saving? Or is the idea that young professionals can “afford” to not earn very much in their 20s and instead focus on lower paying jobs (or self-employment) since that may provide better development?

  • http://twitter.com/johnwuy John Wu

    Why can’t you learn and discover at your 9-5 job? You may think of it just as “going through the motions”, but for me I learn and grow every day at my regular office space job.

    They pay me well too. The risk vs reward is just not enough to justify the “free spirit” approach described in this article.

    • Cole

      Then are you a Brazen careerist?? To be bold is the point of this site [from my point of view].

      I agree with the article: you must look at the long term earnings vs. short term savings.
      FEAR scares people down career paths and away from their dreams.
      Savings is not bad, but it cannot be your #1 at the crucial point of your life
      You have to be willing to starve a little to get where you want and its WORTH IT!!
      Or you can take you decent paycheck and find yourself always wondering if you should have taken the dive.

      If employability is like stock, while the market is low, you should invest as much as possible into the equity of your skills. When the market turns around, your portfolio is more diversified!!!

      • Jrandom42

        Why can’t you learn all you can from your current 9-5 job and then start your own venture? It’s a time-honored tradition called “spinning off”, It’s most successful practicioners were a couple of bright young engineers who took all they learned at General Electric, and started their own business, that was named from both of their last names. I think Bill Hewlett and David Packard did pretty well for working 9-5 jobs starting out.

  • http://www.positionfinancialservices.com.au Adelaide Mortgage Broker

    What a perfect time to stumble across this blog! At 23 I’m currently in the process of deciding what to do with my career. I have got a Business Degree, and am currently working in the mortgage broking and property investing industry. I have a web design business on the side with my friend. I want to make the web design business my full-time job, but have been worried about saving. I currently own two properties so I need to make sure I have the money to pay those mortgages. I’m thinking of taking the leap though!

  • Jrandom42

    If you don’t start making a habit of saving when you’re starting out, guess what happens: You spend all your paycheck on immediate things that may or not be necessary, and have little to show for it.
    If you finally get that great paying job in your 30s or 40s, guess what happens? The new house/car/furniture/computer/stuff for the kids and etc. At that point, for the most part, the thinking is “I’ll start saving next paycheck/month/year/when we pay off the house/car/furniture.

    At that point, any idea of saving substantially from your great paying job goes out the window.

    Look around at GenX and the older Gen Y and then tell me it isn’t so.

    Forming good habits at the right time is perhaps as hard as keeping, but not as catastrophic as not developing them at all.

  • diana

    Hmm. I don’t see why they see savings and being a brazen careerist as mutually exclusive. I think that starting your career putting 5% into 401k doesn’t make any dang difference in your net income at all, but could make a tremendous difference when you retire, (anyone who has had to sit through an HR meeting about their employee benefits knows that) and also it’s just a good habit to save a modest amount each month and not make excuses.

    I see savings as freedom. If I have savings, I can quit my job and go learn to ride elephants in africa. If i have savings, I can work part time and go to grad school. I would argue that the main reasons people don’t save (too high of rent, penchant for nice cocktails and/or shoes, paying off debt) have NOTHING to do with how hard someone is willing to work in their career.

    This article seems so pie in the sky optimistic it’s not even funny- most self employed people have no security. They could be relying on a handful of clients doing something very specific, that could go away in an instant if say, google starts giving away what they were charging people for for free. Then you’re unemployed, and guess what! Not eligible for unemployment because you were self employed.

    The more I think about this article the more it makes me mad, actually. People do not need more excuses to be financially irresponsible.

  • http://twitter.com/elizabeth_shell elizabeth shell

    I’m quite shocked at how bad the advice to not worry about savings is. Normally I find Brazen to be a source of momentum and good, non-conventional advice. But this one is a bomb. Saving is simply the single most important thing any of us with a job can do. It doesn’t need to be done in spite of finding a rewarding career, improving a skill set or finding your passion, but it does need to be done. What happens when you lose your job? Your car gets stolen? You need to have surgery? Your mom dies? Or any other of things that people never assume will happen, but do, everyday?

    It’s never too early to start saving, even if it’s just a few percentage points of your paycheck. And waiting til 40 or 50 to even start? You’re screwed. Most experts recommend at *least* 22% of your income be put into savings. http://www.pbs.org/newshour/multimedia/retirement/ (Shameless plug, but it’s fitting. Americans are just not prepared.)

    “I guarantee that you will watch your savings account magically grow beyond your wildest dreams.”

    Yes, and I have a bridge to outer space for sale. Has anyone payed attention to the markets over the last few weeks? Retirees are watching their savings be wiped out, and may not live long enough for the correction to restore their savings. Yes, you need to find rewording work. No, it’s not necessarily going to pay handsomely. It’s definitely not going to ‘magically grow’ for the vast majority of people (example b: the income distribution in the U.S. lately. The top 20% of Americans hold 84% of the income.) Yes, you always need to save.

    Worrying about your 401(k) in your 20s is not a bad thing, because it’s likely a percentage of us will either outlive our savings or become so sick we burn through it. Career fulfillment and savings are not either/or, if/then scenarios.

  • http://justtoological.com/ Chaalz

    The part of this article that says you should be expanding your skills, not being stagnant, having backup plans, etc is great.

    The rest of this article is some of the WORST advice I have ever seen. I say that sincerely, for all young people that will read this article. Please don’t follow this advice.

    “When you’re 40 or 50, … you should absolutely be worried about making and saving money as much as possible”

    Well that is exactly what will happen, since you didn’t save early. Those that lived within their means and saved right from the start, wont be “worrying” so much as ensuring their hard earned savings are being put to good use. Worry leads to stress which leads to, guess what, illness, which cost money to pay for. Vicious cycle.

    Here is the cold hard truth.
    You spend 25 yrs (or so) in formal education.
    You spend the next 40 yrs working and saving.
    You spend the next 10-15 yrs in retirement with “poorer” health, living off of your savings.
    (before you disagree, go look up life expectancy rates)

    That is it folks. That is the game we are ALL forced to play and you only get ONE shot at it. The Universe doesn’t care if you are Gen-X, Y or Z.

    I hope all young people reading this realize that you can be responsible and have a fulfilling life and career at the same time. Be the intelligent, vibrant and gutsy people you are. Show the previous generation that you’ve learned from their mistakes and that you can do better. Don’t sabotage your future with terrible advice like “you’ll have plenty of time to max out your 401K”. Don’t be part of the statistic for which the phrase “youth is wasted on the young”, is true.

    And it is beyond me that the author used the phrases “savings account” and “magically grow” in the same sentence! And to top it off he, “guarantees” it?

    • http://twitter.com/elizabeth_shell elizabeth shell

      I couldn’t agree more – I was shocked at how incredibly bad this advice was.

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  • Yosh Anown

    Correct, you can live and earn money while working online also.
    If you know how to manage your time, you can have time for your family and a little time for your Business Online. Start full time as if you are still learning, sooner or later you can work part time but still having the same amount of income.

    Yosh Anown from http://persianrugres​toration.com

  • http://webdesign-newyork.us/ Gabriel Ryan

    I wondering about the risk factor behind the stock market. Even though your article boost me to invest in stock markets. Thanks for sharing your knowledge.

  • K. Coleman

    “If you don’t start learning and discovering your skills, strengths, likes and dislikes in your twenties, you’re going to be behind the eight ball.”

    As a soon-to-be college graduate, I’m curious to know how you suggest discovering those skills, strengths, etc. Any practical advice?