This is a guest post from Lewys Aron – The Frugal Student – is a 23 year old dividend growth and value investor from Wales, UK.
Currently studying Welsh at Swansea University his passion is finance and investing.
Braking with the trend of students and millenials leaving university with huge amounts of personal debt, he will graduate with over £15,000 invested into dividend paying stocks.
One of few Welsh dividend bloggers, Lewys shows that investing can be done cheaply, even in the UK from only £25 a month.
Let me know if you would like to guest post on RFI!
Sometimes you’d be forgiven for thinking all millennials look the same.
It seems that everyone is in a race to keep up with the latest trends, conform with the latest fashion ‘rules’ and buy the latest gadgets.
If everyone at university are using £1,000 Macbooks, then I need one too right?
Expensive BMW’s or Audi’s are the norms once people get a job and everyone seems to be wearing a designer watch.
Designer shirts, Beats headphones, Air Jordan trainers, expensive jewellery and artisan coffee it seems like millennials trends are all expensive.
Rewind 5 years and I was working 9-5 in a hospital filing room, spending every penny of my pay cheque.
In fact, spending more than my pay cheque!
I was longing for an expensive car, a Ralph Lauren shirt and an Armani watch, just like everyone else.
I’d sure look cool in an Audi, and if my colleague on £17,000 could afford one. Then so could I! – That’s what 0% finance and salary sacrifice schemes are for right?
I’d drink Costa Coffee a few times a week and eat out just as often until it all caught up with me.
Here comes realization number one;
Being a ‘typical millennial’ resulted in unplanned overdraft fees and all this spending didn’t even make me happy.
I was working for things I thought I wanted but as soon as I was done, it was on to the next thing.
My disposable income each month was getting less and less as salary sacrifice schemes and items on finance eroded my earnings each month.
I didn’t even enjoy Costa coffee anymore and dining out just became a routine.
So, how did I get to where I am today? A university student with £13,000 invested in the stock market despite the extortionate costs of university?
I gave up.
I gave up on keeping up.
Why strive for the latest iPhone when it didn’t make me happy?
Why dine out on a whim just because everyone else was doing it?
The results were amazing – I was happier, my bank balance was healthier and I felt liberated.
Putting the whole ‘phase’ down to youth and influence I moved on with my new life of frugal yet comfortable living.
Then – Three and a half years ago I walk into University for the first time, and I see the old me, countless people wearing designer clothes and expensive jewellery.
I’d speak to students and their dream was to buy an expensive car within 3 years – More than possible they’d say thanks to 0% finance.
A few months later I’d see photos of them ‘jetting off’ to the Caribbean on Facebook! Taking advantage of their 0% student overdrafts
Here comes realization number two;
They were all wearing designer clothes and lusting over expensive cars for one reason: To make them look good.
It seems the millennials I speak to have forgotten one thing: Looking good doesn’t equal feeling good.
Yes 0% interest overdrafts are attractive but you have to pay that money back one day!
How fun is struggling in years to come to pay for that caribbean adventure?
Now, I’m not going to go through the details of debunking the ‘flashy’ spending noted above, I’ve already done that – here, but I do want to continue my story;
In just five years I’ve gone from overdraft fees to having £13,000 invested in the stock market.
And guess what – People think I’m privileged and receive hand outs!
Guess what, I earned every penny of that £13,000!
I juggled 30 hours a week with study and whilst everyone else was jetting off to the Caribbean and buying designer watches I was planning my journey to financial independence.
In the middle of this planning realization number 3 hit me.
Working hard wasn’t even the most important ingredient it was spending smart.
Now this blog is full of valuable money saving tips and people buying X instead of Y to save some money so I won’t repeat any of that here.
Instead, I want to present to you my plan for financial independence in the hope of inspiring millennials to give up on keeping up and to make a plan to become financially – and mentally – independent.
So, here goes, my plan for reaching financial independence
1. Invest spare capital into dividend growth stocks
I plan to invest my spare capital into high quality dividend growth stocks. These are stocks that will pay me an income to reward my ownership.
The current yields available trump that of bank accounts here in the UK and these companies often grow their dividend pay-outs.
Yes, starting out can be complicated and that’s why I started my blog. To help students in the UK and those on low incomes to invest in the stock market.
There are also other blogs out there that can guide you too (this blog included)
I’ve even compiled this list of my Top 100 Blogs for Dividend Growth Investors that can aid you in your dividend growth journey!
2. Diversify income
I also plan to diversify my income wherever possible.
This includes through dividend payments and through various part time work such as translation and freelance writing.
It never hurts to make a Fiverr account to sell your skills!
3. Become a minimalist
This is nothing to do with the actual financial aspect of minimalism (i.e. spending less money on things) but it’s to do with the above point.
I feel by being a minimalist, I can better devote my time to earning income outside of work.
By having less things to maintain, sort, clean etc. then I have more time to translate, undertake freelance writing tasks and invest in myself through education.
4. Help others
Many people think I write my blog in search of some additional income – They’d be wrong.
I write my blog to help millennials give up on keeping up.
I feel through helping others I build a team of great minds around me.
By helping someone understand Dividend growth investing or minimalism they’ll eventually establish their own ideas – and share those ideas with me!
In turn, these ideas will enrich my plan to financial independence!
I really hope you enjoyed this guest post and would love to see your comments on some of my other articles soon!
Great post Lewy! I really enjoyed reading it. I wished I had known all these nuggets of information you just shared whilst I was uni. It would have made a big difference in my finances if someone had told me looking good was not same as feeling good and spending smart was more important than hard work.
Lewys Thomas says
Thanks Esther, I really appreciate your kind comments.
To be honest, I got lucky that I was able to fulfil some of my smaller lusts in order to realise how unfulfilling they truly were.
To give millennials these nuggets is exactly why I started the blog and I hope people can use it as evidence moving forward that studying and investing is possible – You just have to make a few choices re: lifestyle and grind, grind, grind!
I could never understand why someone would insist on buying a macbook for so much when all they need is something to type assignments and surf the internet. You can get PCs or tablets that can do that for a fraction of the cost of a macbook…But that’s the Joneses for you!
Lewys Thomas says
I know – for many look trumps performance though.
My personal pet hate is Beats headphones. (Even as an Apple shareholder)
Simply, there are better headphones out there for cheaper…. Might not look as good though!
Same goes for laptops!
Desi Hisab says
Its important not to follow peer pressure but it takes time to understand the same. Some experience failure and then understand it other understand it from other’s experience. in whichever way, its important to understand that its not easy to reach financial independence goal.
Lewys Thomas says
I totally agree. Personally I feel that by experiencing the lust and the chase for luxury items I have learnt how unfulfilling it really is.
Not only that, my graft to begin the climb the ladder of financial independence feels even more like an achievement.
I have no illusions, this is tough work and I have already made some tough personal sacrifices.
I hope you can follow my journey – overcoming these challenges and of course making a few mistakes along the way.
Thank God for websites like Pauline’s I say, a great aid to anyone anywhere on their FI journey.