Your 20s are when you lay the financial foundation that will determine your money situation for life. That’s why it’s so important to set yourself up for financial freedom during this decade. 

Follow these 7 essential money secrets now in your 20s to get your finances off on the right foot. Master these principles early to give yourself a massive head start on the path to wealth.

1. Become an Absolute Expert at Making Money Online

The internet has completely changed the game when it comes to making money. With just a laptop and wifi connection, you can make a fortune working online. For 20-somethings, leveraging your online money making skills is an absolute must.

Here are some of the many ways to earn great money online:

• Launch an online business – Start a side hustle like dropshipping, affiliate marketing, or selling digital products in your spare time. This allows you to keep your day job while building a second income stream that can eventually replace your 9-5.
• Freelance services – Offer your skills and expertise as a freelancer on platforms like Upwork, Fiverr, and Freelancer. In-demand skills like programming, graphic design, digital marketing, writing, and more are highly paid online.
• YouTube channel – Build a following on YouTube in your area of interest and monetize your channel through ads, sponsorships, and selling merchandise. Top YouTubers easily earn 6 figures yearly.
• Sell online courses – Create a course teaching your specialized know-how, film it, and sell it online through your own website or platforms like Udemy and Skillshare. Info products are all profit margin.
• Drop shipping – Sell products shipped directly from the supplier so you don’t have to handle inventory. Leverage platforms like Shopify and Oberlo to quickly launch an ecommerce store.
• Blogging – Start a blog in your passion area, grow an audience, and monetize through ads, affiliate marketing, digital products, and more. Blogs allow you to earn while doing what you love.

The online money making potential is truly endless, regardless of your background. And 20-somethings equipped with digital skills have a huge advantage.

Spend time identifying your expertise and interests, then develop the skills to profit from them online. Start a side hustle while keeping your day job to begin building a second income stream. 

Over time, you can grow your online money machine into a full-time gig and achieve financial freedom in your youth.

2. Calculate Your Exact Retirement Number

Do you actually know exactly how much money you’ll need saved to comfortably retire? If not, it’s time get clear on this number, often called your “magic retirement number”. 

Knowing your exact retirement number serves two key purposes:

1. It prevents aimlessly chasing arbitrary wealth just because it sounds impressive.

2. It ensures you don’t under save and risk running out of money later in life.

Here’s a simple formula to calculate your magic number:

1. Estimate your planned yearly spending in retirement. Be detailed and account for inflation. 

2. Multiply this yearly spending number by 25. This calculates the total savings needed to retire, assuming a 4% safe withdrawal rate.

For example: 

Yearly spending estimate in retirement: $50,000

$50,000 x 25 = $1,250,000 total retirement savings needed

So in this example, $1.25 million in total retirement savings would sustain $50k yearly spending over a 30 year retirement timeline. 

Use this quick calculation to find your own magic number. For most 20-somethings, it’s likely far lower than expected. Knowing your goal retirement savings number provides clarity and focus for your long term money strategy.

3. View Money Through the Lens of Time, Not Price

Too often we look at money in terms of price tags and mindlessly spend. The antidote is to see money as a direct representation of your time and effort.

When considering a large purchase, calculate how many hours or years of work it would cost you. How much of your precious time and energy will be exchanged for this item? 

This shift in mindset helps make smarter money decisions aligned with your goals. Suddenly that shiny $50,000 luxury car doesn’t seem as appealing if it will cost you 5 years of work. 

View all purchasing and money decisions through the lens of time rather than as a simple price tag. Your spending habits will rapidly transform.

4. Focus on Increasing Income Over Cutting Costs

In your 20s, avoid extreme budget cutting and penny pinching. This gives you negligible financial impact for the time invested.

Instead, devote this energy towards dramatically increasing your earning ability. Here are some ways to rapidly boost income:

• Develop high income skills. Pursue training and education in lucrative skills like software engineering, data analytics, digital marketing, etc.
• Invest in courses, seminars, and coaching to expand your expertise. Apply new skills to increase earnings.
• Build income streams outside your day job. Start a side hustle online to generate extra cash. 
• Expand your career opportunities by networking, applying for promotions, finding a higher paying job, etc. 
• Negotiate raises and salary increases aggressively. Don’t leave money on the table.
• Invest in appreciating assets like stocks and real estate to grow your money.

Even increasing your income by small amounts yearly accelerates your wealth and opens doors far more than obsessively cutting minor expenses. Relentlessly grow your income capabilities throughout your 20s.

5. Build Your Liquid Asset Base First

In your 20s, you may be eager to buy status symbols like cars, watches, and even property. But avoid tying up money in illiquid assets too early.

First focus on building a strong foundation of liquid assets like:

• Cash savings accounts and term deposits
• Stocks, ETFs, and mutual funds
• Liquid cryptocurrency like Bitcoin and Ethereum
• Peer to peer lending accounts
• High interest savings accounts

Liquid assets give you stability, optionality, and flexibility which is extremely valuable in your unpredictable 20s. Don’t chain yourself down financially by buying major illiquid assets too early.

Build your liquid asset base first. Then later in life you can diversify into illiquid assets like property once your foundation is set.

6. Make Ownership Your NO. 1 Wealth Focus 

 Simply trading hours for dollars will never make you rich. True wealth accelerates through ownership.

Owning appreciating assets puts your money to work for you rather than solely laboring for money as an employee.

Some examples of powerful assets you can acquire ownership in:

• Businesses – acquire or build businesses with strong profit margins and growth potential. Many online businesses can be built for low costs in your 20s.
• Real estate – generate rental income through investment property ownership, along with appreciation.
• Stocks – become a part owner of amazing companies and benefit from dividends and capital gains.
• Startup equity – contribute your time and skills for equity in new companies with huge upside.
• Royalties / Patents – own intellectual property like books, songs, art, inventions etc. 
• Online content/brands – build a YouTube channel, Instagram account, or blog that earns residual income 24/7.

Pursuing ownership of cash producing assets gives your money turbocharged leverage compared to just working for money. Make it priority #1. 

7. Leverage Time Now, Money Later for Ownership

Don’t have excess money yet to buy assets and investments? No worries. You can leverage your most valuable asset – time.

Here are some ways to use your youthful energy and time now to pursue ownership, which will pay off with money later:

• Start an online side business and reinvest the profits into assets
• Learn high income skills like coding or marketing to increase earnings
• Use your specialized skills to earn startup equity 
• Build a personal brand, YouTube account, or blog that earns advertising revenue
• Invest time into creating online courses or other info products that provide passive income
• Participate actively in a cryptocurrency or NFT community to get free tokens

The things you invest your time into today can become sources of residual passive income later. Use your 20s energy wisely by focusing on ownership pursuits.

Then in your 30s or 40s when you have more money, you can further accelerate with larger ownership investments.

Your 20s are all about laying the right financial foundations for your future self. Follow these 7 essential principles and you’ll get your money working hard for you starting today. Develop these habits early and you’ll be lightyears ahead on the road to wealth.