These Are the 5 Best Financial Decisions I Made in My Life

I am not rich. But at 32, I live a comfortable life, I own an apartment, and I don’t have to worry about making ends meet. During the last ten years, I have taken time off to go travel for months, I quit several unfulfilling jobs, and I lived life on my own terms, enjoying the freedom that a financial cushion can provide.

I attribute that to some key decisions I made throughout the years. Some I made consciously, others I realized their importance only in hindsight. Either way, there are lessons to learn from all of them. I hope the next lines help to guide you on the right path to achieving your own financial goals.

1. Take Chances

Let’s go back to 2009. I was 21, fresh out of university in Lisbon, searching for my first journalism job. I went for a couple of interviews and ended up with two offers:

A part-time in Lisbon, writing for a magazine about home appliances, that paid €400/month

An internship in Paris, working as a reporter for a web-tv that paid €600/month

Both salaries were low, but €400 in Lisbon go much further than €600 in Paris. Still, I took the risky choice and said yes to Paris. I could see more potential in it. It also sounded more exciting, if I’m honest.

A couple of weeks later, I got on a plane to France and, for three months, depended on three things to make ends meet: my savings, my parents' help, and controlling every little thing I spent money on.

When the internship finished, I got offered a permanent position. The salary was much higher, and, at 22, I was making more money than I ever expected. This doesn’t go to brag but to say that, sometimes, €1000 are better than €2000. Sometimes, taking chances pays off in the end.

How you can apply this

This story doesn’t mean you should make irrational decisions, hoping for the best. What you should do is analyze every situation and assess the benefits it can bring you in the long-term.

Accepting a lower-paying client who will refer you to a friend. Doing free work that will put you in contact with future paying clients. Accepting a job with a lower salary will create more chances for career progression. It’s about switching the short-term profit for the long-term compound effect.

It won’t always work — and that’s why I called this section “take chances.” But if you don’t try, for sure, it will never work.

2. Work for a country that pays better

As I said, I got offered that job in Paris after my internship. But then, the company sent me back to Portugal to be their correspondent in the country.

For the next three years, I worked in my home country, where the minimum salary was €500, with an income from France, that had a minimum wage of almost three times that. This was one of the biggest contributors ever in my path to building wealth.

Truth be told, I got lucky. But hey, I took chances, remember? You can pull this off, too, create your own luck.

How you can apply this

This depends a lot on your area of activity. If you are, say, a baker, you probably can’t work for a company located in another country. But you could have your own bakery and export frozen bread to a richer country, for example.

Or you can work digitally. Especially during the pandemic, when most people are working remotely, borders have faded. Some companies no longer care about your location and would hire you even if you are in a different country. You can search for remote jobs here.

3. Live with parents

During the years I was working in Portugal with a French salary, I added one more factor to the equation that made my savings grow exponentially: I lived at home with my parents.

I was still in my early 20s, my folks were more than happy to have me around, and I traveled a lot for work, so I didn’t want to spend money on rent to be at home only half the time.

This is one of the most common pieces of advice when it comes to saving. For a reason: it works. However, it is also one of the tips people are more reluctant to put into practice. Giving up your independence is not easy, but it might be worth it.

How you can apply this

First of all, living with parents is a privilege. Not all of us have a mom and a dad who can accommodate us in their homes once we’re adults and let us live rent-free.

But there are other versions of this. You can volunteer to share a house with an elderly person while looking after them and keeping them company. If you work remotely, you can rent a cottage in the countryside for cheap and live there for a while. Or you can rent a room in a house with 10 other people.

Are these options nice? Probably not, for most of us. But the good thing is that they are temporary. You do them for a while, with a clear goal in mind: saving money that will allow you to take the next steps in your financial freedom.

4. Buy an apartment

Because of all the previous steps, in my late 20s, I found myself with a decent amount of savings that allowed me to put down the first payment for an apartment.

Having lived in different countries (besides France, I also lived in the UK), I was skeptical about this step for a while. I didn’t want to be tied down to a location. But the thing is, it doesn’t tie you down. I bought the flat, lived there for 1.5 years, and then moved to Budapest, Hungary, where I currently live.

In the meantime, I’m renting out the apartment. The rent money I receive from my tenants covers the mortgage, so, basically, they are paying it for me.

Real estate investment is one of the best, safest ways to invest and grow your money. It’s not me saying it; it’s all these millionaires.

How you can apply this

First, you should have completed the previous steps or, somehow, managed to save a considerable amount of money. In many countries, you are required to have at least 20% of the property value when you ask for credit.

When making the decision to invest in real estate, don’t go for the obvious choice. If you live in Los Angeles, you would probably want to buy an apartment there, right? But LA’s real estate market is one of the most expensive in the world. Maybe you’d be better of buying an apartment in your home state, in an area you’re familiar with, and renting it out.

Read extensively about the market in different areas, just so you can pull off the best possible deal.

5. Invest for later profit

After all the steps above, at 30 years old, I decided to completely change careers. I went from journalism to IT in search of new challenges, a steady career path, and a better salary. Long story short, I’m getting there now, about 2.5 years after I made that decision.

I am achieving this now because I invested first. I did a programming boot camp that cost a considerable amount of money and, especially, meant that I couldn’t have a job for almost a year. I invested a lot, but it paid off.

How you can apply this

Your career and your salary don’t have to be a straight line upwards. It’s ok if at 30 you make less money than at 25. Because that might mean that at 40, you are making enough to cover up for the investments you made in the meantime.

Have a more holistic view of your finances and your life. In the end, it doesn’t matter how much you make each month. How much you make in a year, or even in 5 years, is a much better metric to look out for.

Takeaway

The financial choices you are allowed to make depend on your current situation, not only in terms of wealth but also family and career-wise. They also depend on the phase of life you are at.

But regardless of your personal circumstances, these are tips that you can always apply, even if not exactly the way described above.

Be creative, be audacious, be responsible. It will pay off in the end. Literally.