Many ambitious young adults save their money and put it to work in various investments. Financial discipline will give you more choices later in life, but some people feel like they can't enjoy any of their money in their 20s.
A 23-year-old finds himself in this situation despite earning $25,000 per month after taxes. He has a girlfriend and is planning to propose to her before he turns 25. He's even debt-free, excluding a $1,000 monthly payment for his Hyundai Santa Fe. Those payments end in 2028.
He has a $500,000 net worth, excluding his vehicle, and he even has a rental property. To top it all off, he's only paying $350 per month in rent and lives in a country with a low cost of living. Despite the strong financial advantage, he doesn't feel ready to enjoy any of his money.
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"When is it safe for me to ‘splurge' and stop overthinking about investments all the time?" he asked on Reddit.
Several high earners jumped in the comments and shared their thoughts about enjoying some of their money while building long-term wealth.
Find Your Balance
Spending all of your money will prevent you from making any progress with long-term financial goals, but if you penny-pinch your entire life, you may not live a fulfilling life. The 23-year-old seems to have financial discipline, but it may be worth spending some money from time to time.
The 23-year-old should consider all of the ways that he wants to spend money. He's mentioned a $73,000 Porsche and a $400,000 house as the two things he wants to splurge on in the future.
The Porsche is a splurge since it's not essential. However, a $400,000 house will be valuable when the 23-year-old wants to start a family. He may want to consider buying the house after he has confirmed that his girlfriend is the one and married her. He can still spend money on some things, like one or two vacations per year, depending on his preferences. He has the money to afford many expenses, and with strong financial discipline, he can enjoy life while building his portfolio.
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Keep Investing And Building Your Income
Many Redditors encouraged the 23-year-old to continue investing and building his income. Continuing to build his finances shouldn't discourage him from spending money on things that he enjoys.
It's tremendous to see a 23-year-old earning $25,000 per month after taxes, and if he got that far, chances are he can scale his income higher. We don't know any details about his e-commerce business, but it is good to capitalize on the opportunity while it's hot. Some e-commerce businesses get replaced by Amazon (NASDAQ:AMZN) knock-offs, while others see a sudden drop in traffic due to one of Google's SEO updates.
The e-commerce business owner shouldn't kick back and relax, but he can spend some of his money on things that he enjoys. It's undeniable that he is ahead of his peers. He should keep doing what he's doing while purchasing some of the things that he wants to buy.
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What Happens After The Splurging?
The 23-year-old only has two big splurge purchases in mind. The house makes sense when he's married. He may want to get the Porsche right before getting married, since those plans may change upon getting married. Some people dream of getting supercars but opt against them after they get married and have kids. It all depends on how much he wants the Porsche because money isn't an issue.
However, he may not have much splurging left after a car and a house. He has mentioned vacations, but his annual vacation bills likely won't be anywhere close to the $73,000 Porsche he's looking at.
You don't have to spend money to have a good life, and you don't have to spend more than what you make each month. The e-commerce business owner is in a good spot and may want to enjoy some of his money. However, it's important for him to invest more than he spends. Given his income and living costs, that is a realistic goal.
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