Advice from a billionaire to college students: Be a cheap bastard

If you could give one tip for college students wanting to invest or build a portfolio, what would it be?

The best thing college students can do right now is to stop spending their money. Being a cheap bastard now means so much more freedom and choices later. (Chris Sacca)

When it comes to increasing your odds of becoming financially independent, what’s the most important thing for most people: time in the market. Mr. Sacca nailed it. If you can be frugal when you are young, take the money that you don’t spend frivolously and invest it — allowing that money the opportunity to grow over the year through the magic of compounding — you will dramatically increase your changes of having more money than you can imagine.

A $5,000 investment when you are 20 will likely be worth about $160,000 when you are 65. Conversely, if you wait a decade before you make that same investment, when you turn 65, it will be worth $74,000; waiting until you are 40, the money would be worth $34,000. Be a cheapskate early.

BEING A CHEAP BASTARD NOW MEANS SO MUCH MORE FREEDOM AND CHOICES LATER

-Chris Sacca, billionaire investor

Start investing early… If you were to make a $5,000 investment every year:

Age Started

Value at 65

20

 $        2,087,000

30

 $            930,000

40

 $            395,000

50

 $            146,000

 

 

Image source: H.L.I.T.

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