A self-made billionaire shares his best money advice for 20-somethings
Courtesy of Anthony Hsieh
At age 25, he purchased the mortgage brokerage company he was working for with his own savings and a loan from his uncle - a decade later, he closed a deal with E-Trade to create E-Trade Mortgage.Today, the self-made billionaire is the CEO and chairman of nonbank consumer mortgage lender loanDepot, which he launched in 2010.
"It's more relevant today than any time in previous generations, seeing as we are in an economy that is uncertain and changing," he explains.Not setting aside money in an emergency fund is a common mistake - 63% of Americans do not have sufficient emergency savings - but it can be a costly one.
While it's easy to ignore the possibility of losing your job, a failed business, medical emergency, or lawsuit, these are all scenarios that could quickly become expensive realities. As David Bach writes in his bestseller, "The Automatic Millionaire," "No matter how well you plan or how positively you think, there are always things out of your control that can go wrong.Hsieh isn't the only advocate of prioritizing your emergency fund from a young age.When Business Insider asked billionaire John Paul DeJoria what money advice he would give his younger self, he said, "Have a cash cushion."
Most experts, including DeJoria, agree that it's smart to have six months' worth of savings tucked away, but you may need more or less depending on your situation.
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