Have you ever received terrible financial advice that just doesn’t work in today’s economy? In this article, I uncover the five worst money myths I was told in my 20s, from misconceptions about superannuation to outdated views on renting. Find out how to dodge these traps and build wealth smarter and faster in 2024.
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This is by far some of the worst financial advice I've ever received, and I received this all throughout my 20s.
I'm sure you've been receiving it in your 20s, your 30s, your 40s, and probably your 50s.
If you're interested, keep reading.
Now, there is no shortage of good financial advice, and there’s no shortage—in fact, there’s less of a shortage—of shitty financial advice.
What I mean by this is not the financial advisors themselves (we’ll get on to that in a little bit), but I’m talking about the people around us.
Maybe it’s your uncles, maybe it’s your cousins, maybe it’s your siblings or your parents that went and did something like 50 years ago, and then they said: Hey, this is a really good idea that you should now incorporate into your life in 2023 or 2024. Yet I did this in 1996; it probably still works.
Alright, Boomer—it doesn’t work anymore. So what you need to know is that you need to adapt your strategy and your tactics for today’s market.
Now, you might be one of these Boomers, and you just got triggered.
You’re like: Ravi, you’re so young. You didn’t even go through what happened 30 years ago.
I’m like: Yeah, that’s true, but you never went through a pandemic where everyone got locked down, and then we printed more money than we’ve ever printed before and then increased rates at the fastest pace we’ve ever increased them.
Now, with that argument being settled, let’s jump into five lies that I’ve been told about finance and getting financially free in my 20s.
Now, there’s some truth to this, but there’s a lot of horseshit with this as well.
Let’s focus on the positives first.
The positive is that, yes, you’ve got a lower tax bracket when it comes to your super, and you might be 50 and thinking: Well, is it better to invest in my personal name or super?
Well, it’s probably better at that point to invest in your super.
However, the reality is that you can’t touch your super until you get to preservation age, which is like 60 or 65 anyway.
So imagine getting this advice in your 20s, and you’re told: Hey, maybe you should make a salary sacrifice.
I remember getting told this, and I did it at my first job too. I was like, “This is fantastic. If I put money in, my employer at the time was fantastic too because they would then double up what they were paying me. This is really cool.
Then I realised that if I’m putting more money away into this savings account—which I can’t touch until I’m 65—that means I’ve got a lot less now.
Yes, granted, for most people listening, this is probably the best way to do it because you probably have a budgeting issue and can’t save money. But for the smart few girls and guys reading right now, you might actually do a lot more toward financial freedom if you have that money today.
What I mean by that is you could go ahead and save that money a lot quicker to put toward a deposit on your own home or investment property.
You might go into shares, you might go into crypto, or you might go into index funds—whatever the case is. But you can do that today and get the benefits before you’re 65.
So if you’ve signed up for this whole idea that we work somewhere and then retire at 65, well then, yeah, that system works because most people are doing that anyway.
However, if you’re looking at this today, we have massive opportunities. We’ve got the internet where you can build online businesses as a side hustle, make an extra $10,000, $20,000, or $30,000, and you have new technology and new asset classes.
You can go out and build more wealth, allowing you to retire before you’re 65. If you go ahead and do that with the money you have today, you’re probably going to grow your wealth a lot faster outside of super.
Now again, I can't give you financial advice—I definitely don’t look like a financial advisor—so use common sense when you come across these opinions online, even including myself.
I did this for about six months in my first job and then realised that if I’ve got extra money today, I can do more with it because I’m able to invest it the way I want. I’m not working till 65, and I already knew that at 21. So, I knew I needed to get assets in my 20s and 30s to retire before I’m 40.
What we’re finding out in 2023 is how wrong this actually is.
Yes, we’ve seen a rental crisis play out, and rents have exploded. But when you think about having bought a home 12 months ago versus renting a home, your rents might have increased by 10%.
If you were renting something for $700 a week, you’re probably paying $770 now.
However, if you had gone ahead and bought a property for about $700,000, imagine what your repayments look like now.
I can tell you—they’ve increased by more than 10%. This is the issue. We’re still thinking about buying properties in Sydney for $60,000, like 40 or 50 years ago. At that point, it made a bit more sense to buy a place, especially when you assessed it in relation to your income.
Today, it probably doesn’t make as much sense.
In fact, for me personally, building wealth by rentvesting versus purchasing my own property and having maybe one or two investment properties makes so much more sense.
The biggest turning point for me was deciding:
I’d also have a diversified portfolio across other assets I was able to build. Now, I’d have passive income paying for the debt on my own house.
That makes a lot more sense, especially if I can do it 20 years earlier. So, yes, rent is not dead money. I’m still rent-vesting, and that doesn’t mean I’m poor—but, you know, each to their own.
I can’t believe I actually got this one.
Someone told me to buy a nice watch and a nice car to get more sales. I was like, “What the hell does that mean?”
I got this advice from a family friend a few years ago—you might actually be watching, so this is super awkward, but I’m going to continue anyway.
He said, “Ravi, I run a business, and I think what you need to do is get a nice watch. It gives you something to flaunt and show that you’re successful. Also, you need a nice car—you can’t drive the car you’re driving right now.”
To be honest, my car isn’t fancy, but it’s also not a box. It’s a $15,000 car—a 2016 Holden four-wheel drive. It’s pretty good and does the job.
Personally, I don’t care about cars, especially because I only drive once every two weeks.
As for watches, I’ve got an Apple Watch, so nothing fancy.
However, he was so adamant. He said: “I took out a business loan and got a new car, and now I get more clients because they think I’m successful.”
I asked: “Would you rather look successful or actually be successful?”
He replied: “What do you mean? There is no other way—if you have the car, you get clients.”
I didn’t think that’s how it works, but okay.
Of course, the first couple of years on YouTube were hard, but I grew my audience wearing a $5 Kmart t-shirt. I’ve since gone on to build a buyer’s agency that is now a finalist in the REB Awards, which is fantastic for Buyer’s Agency of the Year. I did that while wearing a black t-shirt and an Apple Watch.
So, if you’re getting advice like this—where you have to look successful to be successful—it’s a load of rubbish. Social media has warped our way of thinking about who’s successful and why they’re successful.
Don’t worry. Just get an Apple Watch, and don’t bother with fancy cars. It’s probably better to just get an Uber anyway.
This is so far from the truth.
I remember when I entered a university, I thought: Okay, cool. I know I have to do this because I get the piece of paper, then I can get a grad job and accelerate my way to becoming, like, the director of some Fast-Moving Consumer Goods (FMCG) company.
What an idiot.
Anyway, after I finished the degree, I had other people who graduated at the same time saying: “Okay, cool, so what are you going to do?”
They’d respond: “Oh, I’m going to do my honours or my masters now.”
I’d ask: “Why are you doing that?” Then they’d reply: “Well, the opportunities for me are going to be so much better if I go ahead and do another two years of textbook study.”
I thought: Wouldn’t it make more sense to do this maybe in five or six years after you’ve got practical experience? That way, they’d see you’ve got both practical and theoretical knowledge.
However, they’d say: “No, no, at least I get it all out of the way now.”
To prove my point, I went on LinkedIn and looked at maybe five to ten people I graduated with—some of whom had done post-grad degrees. They’re not in jobs that are significantly better than everyone else who either didn’t go to uni or only did an undergrad degree.
In fact, I’d go so far as to say they wasted more time taking on more debt, only to get into the corporate world and start working their way up anyway. Granted, there are some corporations and higher-level jobs that may require you to have an MBA or some postgraduate degree because they think it’s prestigious or something. But the reality is, you don’t need this.
If you’re in your 20s or 30s and trying to figure out what to do, instead of going back for more study, spend time figuring out a side hustle or passion business. Make $20–30k from there.
Now you’ve got the best of both worlds, and you’re not a slave to a 15-hour-a-day job.
Trust me, I’ve got people in my circle doing this right now. I don’t care if you take offense to it—the truth needs to be told.
I’m definitely not going to go down the path of “shares are better than property or property is better than shares”, but being told that shares are going to make you more money than property is a load of crap.
The reality is that each option has its pros and cons. They offer benefits depending on your needs and circumstances, and there are times when you can afford to take on more leverage.
For example, if you’re 18 and can’t get a loan for a house, it makes sense to invest your money into shares or index funds. At least this way, you can grow your wealth and move in the right direction.
However, if you have the ability to buy property and instead choose to invest $100,000 in shares, hoping for a 10% growth, you’re missing out. The same $100,000 could get you a $500,000 home. If you bought in the right location—hint: use Search Property, my buyer’s agency—you’re likely to make a lot more.
In fact, I can confidently say you would make significantly more in that year and in the years to come. You can compound those gains, take out equity, and then diversify.
So if you think shares are the only way to build wealth, or that real estate is the only way to do it, you’re wrong.
Now, after covering these five lies I was told in my 20s, I want to discuss another big issue in the industry: financial advisors.
The reality is, we don’t have strong financial education in our system. This means we often have to rely on others to understand it for us. Some people aren’t even interested in learning about finance, which is why services like financial advisors and planners exist.
The problem is, they can only specialise in certain things. If you look at the regulations in this space, they’re massive and honestly quite bad.
Financial advisors can only discuss specific topics.
For example, they’re not allowed to talk about property.
We’ve had clients approach us wanting to use our buyer’s agency while also having a financial advisor. You can only imagine how interesting those conversations are.
I’ve spoken to 19 different financial advisors so far, and I’m yet to meet one who actually knows what they’re talking about. Most of them focus on just one asset class and think leverage is the worst thing ever.
Meanwhile, their clients genuinely want to take action, but their advisors say no.
The reality is, financial advisors need to be working for you as the client.
I’m not claiming to know everything about finance, but my priority is always my client’s best interest—not mine. Even if I could say: Hey, you can buy seven properties in the next three weeks, and earn a lot as a buyer’s agent, I wouldn’t suggest it unless it’s the right move for the client.
That’s what’s important in this process: surrounding yourself with the right people and getting the right advice.
Whether it’s property advice, shares advice, or life advice, consult someone who has gone out there and done it themselves.
Definitely don’t rely on family, friends, or extended uncles and aunties.
The reality is, they don’t know what they’re talking about. Go to a professional and get proper advice.
I hope you’ve learned so much from me in this article.
I’ll catch you in the next one.
Thanks, guys!
Disclaimer: Search Property Pty Ltd (SP) does not provide financial or investment advice and does not hold a financial services license as defined in the Corporations Act 2001 (Cth). Any advice given by SP is general in nature and does not take into account your personal circumstances or objectives, financial situation or needs.
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