Most young people love to spend money, but they don’t spend enough time thinking about how to make it. In fact, looking at the lives of most people I know who are unhappy about their money situation, if they were honest, they’d have to use the words of the famous Paul Kelly song that went “I did all the dumb things!”

By the way, as a financial adviser, I know there are a lot of older people who have and are still doing dumb things when it comes to money.

My 2GB colleague, Ben Fordham, has a panel operator who has just turned 21 and Ben asked me to give him money tips for life. Rather than throwing him (and the listeners) a pithy one liner (radio does like it neat, tight and punchy!), I promised to write him and others a longer piece on the smart things to do with money from as early as possible.

Of course, if you don’t do these smart things, then you’re probably doing all the dumb things!

So, let’s go through a few Money 101 lessons:

Lesson 1: Put your money life on the lawn and do a budget to see where you earn and spend money.

Lesson 2: GST your spending to try and save 10% of your income.

Lesson 3: Put extra into super because the returns average 7% plus, which is much better than bank interest. Go to superratings.com.au and select an industry super fund that has averaged the best returns for at least three years. At age 21, if you put an extra $2,000 a year into super and stop doing it at age 30, your super at retirement could be half a million dollar higher! If you keep doing the extra $2,000 for your working life, it could end up $1million higher!

Lesson 4: If you want money to buy a property, use your super fund and the First Home Super Saver (FHSS) scheme. This allows you to make extra contributions to super, which you can withdraw to help build a deposit for a home loan. Once you’re ready for a loan, you can apply to release up to $15,000 from one financial year, up to a maximum of $50,000 across all years (for contributions made from 1 July 2017), plus any associated earnings.

Lesson 5: If you can’t afford to buy a property you live in, think about becoming a landlord of a property you might live in when you can afford it. The Tax Office helps by allowing you to claim tax deductions on loan interest, which makes repayments easier.

Lesson 6: Learn how tax laws can help you get richer. It pays to find a tax accountant who teaches you stuff or go online and teach yourself.

Lesson 7: Stocks are a smart way to build wealth, but you can’t be a punter. You need to be an investor. I suggest you teach yourself about the safer and smarter way to invest in stocks. Newsletter like my own Switzer Report can be valuable teachers about investing to build wealth.

Lesson 8: Once you build up a tidy sum of super and you’re earning good income, look for a financial adviser, if you think you can’t advise yourself. It’s generally false economy worrying about the fees you pay when you look at the potential returns a good adviser should make you. They also know the rules around super and tax when it comes to investing. These are sometimes the biggest gifts they deliver to a client.

Lesson 9: Always think about buying quality assets when the market is mispricing them. Homes are great value when there’s a house price collapse and shares after a crash can be a wonderful buying opportunity.

Lesson 10: Write down what you want from your money and create a plan to make it happen. Once you know what you want, either save more or earn more money by say working an extra job or starting a side-hustle, part-time business. Then invest the money in quality assets that deliver you income and increase in value. Did you know you can borrow money to buy shares, and the interest can be tax deductible?

And here are a number of money rules worth remembering:

1. A young person needs good hobbies and learning about money is a very rewarding one.
2. Anything worth doing is worth doing for money.
3. As the world’s best investor, the Oracle of Omaha Warren Buffett of Berkshire Hathaway has advised us: “If you don’t find a way to make money while you sleep you will work until you die.”

My final word on beating the dumb things that stop you from having a great money life is, like all things, you have to want it badly. Then you have to commit to being good at it, which means swapping the dumb things for smart things. Often the best in business, sport, the arts and wealth-building have found mentors or advisers who have helped them achieve outside the square.

I’ve loved this from tennis great Chris Evert: “There were times when deep down I wanted to win so badly I could actually will it to happen.
I think most of my career was based
on desire.”

If you want a better money life, you have to really want it and then learn how to get it.