So, you’ve just graduated after years of rigorous study, late nights, penny-pinching, hard work, and maybe just a little bit of fun. You’ve gotten that job you worked so hard for and now, you’re ready to launch your career. You’re a rocket ship, ready to take off to wild success!
With any luck, soon the checks will start coming in and you’ll be making more money than you ever have in your life. You may already be envisioning a brand-new car or a high-rise condo in the hippest part of town that you’ll be able to afford with your new-found income.
But let me give you one piece of advice: Save it. Don’t spend your money on the luxuries that immediately come to mind. Don’t go out for lunch every single day or go out on the town every weekend buying expensive drinks.
Sure, some of those things are fine to do in moderation, but, as financial guru Dave Ramsey puts it, the most important thing you can do early in your career is to live like you are still in college. I learned these lessons from my parents, and I’ve applied them throughout my life.
Even now that I have a successful career and I’m the CEO of the fastest-growing woman-owned/led company in the country, I still live by these principles. In fact, some people would even call me cheap. Although I prefer the word “frugal.” Or maybe “smart.”
My principles of frugality were borne out of my childhood. My father was an entrepreneur and my mother was a civic leader — we were far from wealthy. Growing up our family had to work hard, and we learned the importance of saving money from a young age.
I believe the point of making money is not to waste it on being self-indulgent, but to be intentional with it and to use it wisely. It’s about investing in your long-term success. It’s what I call delayed gratification.
When I started my company — Pinnacle Group — at the ripe age of 25, we were fortunate to have a good amount of early success. I could have taken the money and spent it on a brand new car, a bigger home, or any number of things that would immediately reward me for my career success. Instead, our family kept our old cars until they were truly worn out, we lived frugally (and still do), and I reinvested the money into the company so we could continue growing.
However, this is not always the case in the business world. I’ve seen this many times: the second a business starts being successful, many entrepreneurs go on a spending spree and buy expensive real estate, fancy cars, and other luxuries. After all, they’ve worked hard for their success, so why not enjoy it? And that’s how so many businesses stall out or fail when the tough times hit. It’s the businesses that were prepared for the storm that can weather it.
I have experienced this first-hand. When 9/11 happened, our entire business dried up overnight. We had to stretch every dollar, and, at times, we barely made it, but the money I had saved and reinvested in the company in the previous years prevented us from going bankrupt. Had I taken our profits from 1998 and blown it on a lavish lifestyle in 1999, we wouldn’t have had the financial safety cushion to keep us afloat in 2001 and 2002.
As a new college graduate, you also might be graduating with a load of student loan debt. The sooner you can pay that off, the better. So, if that means living a few extra years in an apartment instead of buying your forever home now, it will be worth it. You’ve lived on the cheap for the last four years in college, just continue with that same mindset for a few more years and you can set yourself up for a lifetime of financial freedom.
I always say that it took Pinnacle 23 years to become an overnight success. During that time, we’ve grown exponentially from doing business in 1 state to 48. Then, Pinnacle Group began its global expansion by entering the Canadian market, and now we’ve expanded into Mexico, Chile, Argentina, and Ireland — and we don’t plan on slowing down any time soon! We got to this point through smart spending, saving, reinvesting in our people, and planning for the future.
I hope all of you — new graduates — use these same principles to set yourselves up to be “overnight successes” in the decades to come. There is nothing more empowering than financial independence.
…and if you’re still looking for that job, stay tuned — I may have some advice you can use in the near future.