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Young people are already rich

Young people are rich

I believe Facebook will one day be seen as important a leveling force for humanity as the Magna Carta, the Suffragettes and the International Bill of Human Rights.

Why? Because what strikes you when you click through other people’s profiles is how similar we all are.

We no longer collectively aspire to marriage, 2.4 kids in the suburbs and cutting our lawn on Sundays in formation.

Yet we mostly have similar gangs of friends who crowd in front of the camera or who take photos of us on bridges during breaks in far-flung cities.

We all say we like books, films and music that thousands of others like.

We’re different, but we’re recognisable by our similarities. We rally around them.

But there’s another thing that strikes you when first encountering Facebook, if you’re over a certain age.

It is harder to write about, but even more true.

Up until a year or so ago, most people kept their Facebook profiles open. This meant you could snoop about the friends and family of your own friends, and get a glimpse into their lives.

Most Facebook users then were 20-somethings, so if you were my age you saw endless snapshots into a time of life that was now in your past.

And one thing is clear: Young people are ridiculously beautiful.

Your gran was right: you are/were gorgeous

We don’t realise how stunning we all are when we’re young, of course.

Instead we lust over the same particularly cute girl in college, or gossip about the same muscled guy in the mail room.

But from the perspective of a decade or two, almost everyone in their late teens and 20s radiates beauty.

It’s an uncomfortable truth (especially if you’re getting on a bit!) but it’s true nonetheless.

Still, just to make sure I’m not some lecherous old man, I sounded out this observation with respect to Facebook with friends and strangers of both sexes while on my recent holiday.

In a few cases it took a drink or two to get them to open up, and some of the responses veered towards the coarser end of aesthetic appreciation!

Bu it was remarkable how virtually everyone (the men most enthusiastically, it has to be admitted) had clicked through a younger sibling’s profile and gasped (/drooled) over the photos of the friends they found.

In the Facebook profiles of 40-somethings, beauty is the exception. In the profiles of 25-year olds, beauty is the norm.

Young? You’re rich already

So why am I writing about this on Monevator, a site about investing and securing your financial future?

Because with the perspective of time, I see I really didn’t need to spend much on clothes and pick-me-ups when I was in my twenties.

I’m putting this out onto the Internet because it is something I have learned about life that could make a difference to people’s financial futures, if they’ll listen.

Would I have listened when 25? I was hardly a clothes horse, but even as a man I did go through a somewhat materialistic phase, where I had to have just one more great suit or pairs of shoes than I needed.

Looking back, I should have stuck to t-shirts, trainers and jeans.

Of course, this post has no audience on this site. I can’t imagine many 20-something women in particular will read it – yet they’re the ones who really are wasting their cash.

True, for all the advances of the sexual revolution, men are still partly evaluated more for their possessions and potential than for their appearance, whereas however unfairly, looks remain towards the top of the list for men judging women.

In that sense, it may make sense for women to spend thousands on expensive dresses, haircuts and make-up every year.

Except that most men don’t really notice expensive dresses and haircuts (or, at the risk of peddling stereotypes even further, it’s only really my gay male friends who do). We notice when a woman is physically beautiful, but we’d struggle to say it was because of the right label or fit.

It’s depressing to me now to walk down Oxford Street in London and see young women bundling along the pavement having spent all their money on clothes they don’t need to look like knockouts.

I’m told by female friends they do this mainly for other women, so perhaps the solution is to hang out with older women. They will be too envious of how good you make a skinny t-shirt and your boyfriend’s jeans look to dare suggest a shopping trip.

Enjoy your youth, and save the money instead

The difference that spending £100 a month less on clothes during your twenties and investing it instead will make to your future is incredible.

If you can save £5,000 by age 25 and invest it for average returns in the stock market, you’ll have £225,000 in your retirement pot by the time you’re 65, regardless of what you save during the rest of your life.

As I say, few young people will read Monevator. Perhaps if you have a younger relative or friend, you could forward it to them?

To conclude, I don’t think youth is wasted on the young, but I do think a lot of money is. If you invest it to benefit from decades of compound interest, you’ll be grateful when you’re older.

Needless to say, running up debts to spend on clothes in your 20s is insane. You are only borrowing from your future self, who will be poorer because of it, and who won’t have the other benefits – freedom, time, potential, beauty – that you enjoy now.

Your looks won’t last, and nor will it matter in 20 years what strangers in a club think of you tonight.

If it really bothers you, dress simply but economically and hang around with older people who’ll think you look marvelous. (We’ve got more to say for ourselves, too.)

“The problem with beauty is that it’s like being born rich and getting poorer.” – Joan Collins

Young? You’re beautiful already. Save and invest for the future instead.

Image by: Valentin Ottone

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{ 55 comments… add one }
  • 45 Will June 9, 2015, 1:53 pm

    Interesting article, I’m 23 and have just gathered the necessary £5000 destined for my stocks ISA.

    While I won’t spend money on materials (took a month of self convincing to shell out for a £23 casio watch, tshirts costing more than £15 I feel is taking a liberty) I spend a lot on experiences; plane tickets, festivals, nights out. So much so that I have very little hope for saving much until I am least 30. I hope this category of youth spending is a little more acceptable! Paranoid of waking up one day wishing I had lived more in my 20s.

  • 46 Graeme July 13, 2015, 5:07 pm

    Thanks for the interesting site.
    One question – you imply that £5k invested for 40 years could realise £225k. This strikes me as misleading on two levels; firstly it implies >9.7% annualised growth – too bold in my view. Secondly, it ignores inflation. If you worked on 3.5% growth after inflation (perhaps still bold!), you would get to just over £20k in todays terms after 40 years. Still worthwhile, but not quite as spectacular.

  • 47 Ellie October 3, 2015, 6:04 pm

    Although I tend to agree with this article, it is a bit depressing. I’m sure a lot of other millenials hitting their thirties will feel the same. I’ve never wasted money on clothes, cars, luxury holidays, partying or anything like that. I finished college just before the recession hit. My first job (in finance) was a good starting role and I was doing well for three years before the economy went pear shaped and the whole office was made redundant. I had managed to pay off a lot of my degree by that point, so I was lucky not to have much debt. But I spent the rest of my twenties fighting for temp jobs (bar two entry level graduate roles that also ended early due to company restructuring and office closures). At one point I even considered prostitution to pay the rent when things got bad, although I thankfully never went through with it. Only after reaching my thirties have I managed to secure a contract that pays average wage, but I feel as though my twenties were just a wasted decade of struggling and working 50+ hour weeks with very little to show for it. Part of me wishes I had taken out massive loans for designer clothes, travelling and partying.

    I do not have debts, which I am thankful for. I am a workaholic and follow my employer’s financial reports extremely closely, as I am constantly afraid of being made redundant again. I don’t think that fear will ever go away. I know I will never have children, as I am still unable to afford a home and don’t want to start having kids in middle age (I appreciate some women are happy to do so, but I had older parents myself and do not want to repeat the same). If I am lucky then I may get to retire one day, although I do not expect it. Looking back, I can’t think of anything that I could have done better. I listened to the adults around me when I was young, I studied hard as a kid, worked hard in every job, I avoided debt, I tried to save what little money was left after bills (although this tended to get eaten up by unexpected emergencies such as car breakdowns or family illness). I did everything I could to improve my situation, but the good jobs just weren’t around.

    Unfortunately employers take into account where you have worked previously (I am involved in the hiring process now, and it has been a huge eye opener), so if you never get on the first few rungs of the career ladder and have to take minimum wage roles to stay out of debt than it becomes increasingly difficult to convince anyone to give you a chance at a ‘proper’ job when one becomes available. After several years of temping and minimum wages, you are seen as only fit for temping and minimum wages. I was told the same thing time and time again by employers. At 30 I had to apply for close to four hundred positions before a manager agreed to accept me on a graduate scheme with a team of twenty year olds fresh out of university. I will be forever grateful to that manager for giving me a chance, and I have tried to make the best use of that opportunity every day since.

    Your article hit a nerve, as an older colleague made a comment this week about reaching your career peak by the age of thirty and then slowing down a bit to focus on family. It was a completely innocent remark, but I wanted to yell that my generation are just starting our careers and hadn’t had the opportunities to progress before now. I have always been extremely ambitious and motivated and I refuse to believe that my career is over now that it’s only just begun. I have a decade of investing and saving to catch up on! I’ve always wanted to invest and save, but never had the income to do it properly until now. I intend to do everything I can to repair my situation.

    Young people are coming out of university these days with jobs and graduate schemes to go into once again and I want to strongly advise anyone in their early twenties to make the most of any chances you get to advance your career while the economy is good. I can’t stress this enough! I never thought I would spend the first decade of my career working so hard for so little. In university I was certain I would get a good job and build a steady career once I graduated. Everyone told me the same. No one expected the economy to tank so spectacularly. One year the jobs were there and the next no one was hiring. Since childhood everyone around me had promised a good job if I was focused, studied hard, got good grades, and it was a huge shock to everyone when it became difficult to get even one interview. Most of my high performing peers still haven’t managed to recover. Some of my classmates gave up and moved abroad, some still work in minimum wage jobs, others are stay at home mothers (not through choice). Very few have a home and many are in a lot of debt. A few were lucky enough to have well-connected family to employ them or inheritance to tide them over. One was not so lucky and committed suicide after feeling that she had failed and would never recover to the standard that was expected of her. Most are likely to be stuck on low pay for the foreseeable future, despite good grades and work ethic. They are now considered too old for entry level jobs and lack the right experience for higher level ones.

    So grab any opportunities you can while they are there, as things can change very quickly. Save and invest any spare cash while you have it and don’t rely on always having steady employment. Build up other skills that you can as a back up if need be. I hope my younger nieces and nephews never have to go through what my generation did, but it is far better to be prepared just in case.

  • 48 The Investor October 3, 2015, 10:29 pm

    @Ellie — Thanks for sharing your experiences and well done for getting through them! I do think in some ways your generation has been dealt a rough hand. Mine was similar (graduated in the early-mid 1990s recession) but the difference was property had crashed, so at least people could buy flats/houses (though I didn’t — long idiotic story which is scattered about the archives of this blog) whereas with your generation that’s been pulled away too. It doesn’t seem fare.

    On the other hand, you’re young — any 70-year old millionaire would give all his/her money to trade places with you — and the wheel of fortune keeps turning. There will be other opportunities, I’m sure, and all kinds of reversals, too.

    A danger of the current education system is that people believe life is under their control. As you’ve found, it’s never fully under control. It sounds like you’ve learned a hell of a lot from your experiences. I’m sure an easier path would have been preferable… but as I say the race is not run yet, you’re young, and you sound wise beyond your years.

    AND you’re not in debt. For me that’s almost priceless.

    Cheers again for the thoughts.

  • 49 Jason December 17, 2016, 12:12 pm

    Fantastic website. Thank you for all of your articles and advice.

    Please could you explain how you arrived at the figure of £225,000 in the following statement above:

    “If you can save £5,000 by age 25 and invest it for average returns in the stock market, you’ll have £225,000 in your retirement pot by the time you’re 65, regardless of what you save during the rest of your life.”

  • 50 The Investor December 17, 2016, 12:30 pm

    Thanks Jason. Regarding the calculation, I used a 10% return figure over 40 years in our compound interest calculator:

    http://monevator.com/compound-interest-calculator/

    At the time of writing 10% was roughly the long-term return from the UK stock market. Be aware that some people think it’s too high a return to use going forward (and/or say it was abnormally or unusually high in the past. Other countries have seen lower returns).

    Most importantly, it includes inflation. If you back out inflation then UK returns drop around 5-5.5%, which would give you more like £40,000 in today’s money. Inflation is the enemy of long-term savings.

  • 51 Ellie_UK July 26, 2017, 6:02 pm

    In some ways, I consider myself quite lucky. I was never pretty when I was young (even looking back now). I needed a brace but never got one until I turned 30, I was overweight (thanks mum and dad), had terrible acne, thick glasses, deep set eyes, bad posture, and zero social skills. I didn’t even try to look good, as it was a failed goal from the start. I threw myself into academia and developing other skills. I never bothered with nice clothes or beauty products and just wore hand-me-downs and the bare minimal level of socially acceptable grooming.

    I’m now doing much better financially than other people that started in my situation, as I spent the money I saved on more lucrative things. Instead of shopping or partying, I taught myself stock trading and programming. I did splash out on braces and eye lasering, but I was having so many knock on health problems caused by misaligned teeth and extremely bad vision that in the long run I will get that money back.

    Kids… don’t bother with fashion and beauty. It won’t matter when you are older and you’ll wish you had focused on future needs instead!

  • 52 Gee February 14, 2018, 2:16 pm

    “Of course, this post has no audience on this site. I can’t imagine many 20-something women in particular will read it – yet they’re the ones who really are wasting their cash.”

    How cheeky! Here… reading it now!

  • 53 The Investor February 15, 2018, 1:42 pm

    @Gee — Glad to hear it! Investing websites have become less old/male dominated in the past 10 years since I wrote that article — including this one — and I’ve very glad to have you here. 🙂

  • 54 Renate June 6, 2018, 1:28 pm

    I’m 30 and wish more young people would read your blog. At 25 I was an above-average accummulator / saver. Recently, you’ve inspired me to open my Vanguard account and invest more aggressively. Having used a different UK roboinvesting platform, Monevator’s articles on tracker funds , where to begin and the comparison table on different providers are invaluable. Thank you for taking the time to write these and for the difference you as the Investor and your partner make to people’s lives every day. On behalf of all of us who follow you and read your blogs as well as act on the information provided here, we are very grateful! Again, thank you! Just shared this article with my 25 year old sister. To Your Success and prosperity and that of all Monevator followers! Renate

  • 55 The Investor June 6, 2018, 3:06 pm

    @Renate — You’re very welcome, thanks for sharing our site!

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