Finance in Your 20s
Start Early. Keep It Simple. Build Freedom.
Help me name Greglet!
Make your best guesses:
  • Due Date: __________
  • Weight: __________
  • Boy Name Suggestion: __________
Go to: dianagreg.com → Greglet's baby pool
The Point
Guessing a baby's due date, weight, and name is a lot like picking stocks:
The Lesson
Instead of guessing which stock will win, just buy them ALL with an index fund.
94% of professional stock pickers fail to beat the market over 20 years.
Don't Time the Market
"Time IN the market beats timing the market." — Ken Fisher
The Smart Person's Mistake:
Believing you can outsmart the market is a common pitfall. You're up against algorithms and professionals, not average investors.
Why We Try:
Our "monkey mind" craves action. Fear and greed hijack decisions, making us recall wins and forget losses.
The Math:
Missing just the 10 best market days over 20 years can cut your returns in half. These often occur right after the worst days, when many panic and sell.
Bottom line: Set it and forget it. Automate your investing and stop checking.
Passive vs. Active Investing
The Research:
SPIVA Scorecard (2023)
93% of U.S. large-cap fund managers underperformed the S&P 500 over 20 years
Warren Buffett's $1M Bet (2008-2017)
S&P 500 index fund: 125.8% return vs. Hedge funds: ~36% average
Eugene Fama — Nobel Prize (2013)
Won Nobel Prize proving markets are "efficient" — prices already reflect all available info, making it nearly impossible to consistently beat the market
Wall Street Journal Dartboard Contest (1988-2002)
Pros vs. random dart throws — pros barely won, and when adjusted for risk, darts often tied
Burton Malkiel, A Random Walk Down Wall Street
"A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts."
Bottom line: Don't pick stocks. Buy the whole market.
The Research:
Warren Buffett's $1M Bet (2008-2017)
S&P 500 index fund: 125.8% return vs. Hedge funds: ~36% average
Bottom line: Don't pick stocks. Buy the whole market.
The Big Myth
"You need to be a finance expert to manage your money."
Reality check
Smart people make dumb money mistakes all the time
Simple basics
The essentials fit on an index card
Time matters most
Starting early beats being perfect
How to get your $$$ in order before you turn 30
Professor Harold Pollack's handwritten guide for young adults
The 50/30/20 Rule
A simple budgeting formula that actually works
50% — Needs
Rent, utilities, groceries, transportation, insurance
30% — Wants
Dining out, entertainment, shopping, subscriptions, travel
20% — Savings
Emergency fund, retirement, debt payoff, future goals
First goal: Save $1,000 for emergencies
Student Loans: What to Know Now
Before You Borrow:
  • Fill out your FAFSA (even if you think you won't qualify!)
  • Apply for tiny scholarships (I got $1,500 for one essay!)
  • Consider state schools
  • Max federal loans before private
  • Calculate salary vs. debt before grad school
When Repaying:
  • Pay private loans first (higher interest rates)
  • Target the principal, not just interest
  • Deduct interest on taxes
  • Federal = more protections, Private = often higher rates
Credit: The Basics
"Debt is like a big hairy monster that sits in your living room 24 hours a day chanting: Feed me, feed me, feed me."
Three key principles:
01
Build Credit Early
Get a credit card, use it for small purchases, pay it off monthly
02
Pay Balance in Full
Minimum payments = maximum interest
03
Know the Myths
Higher limits don't mean you can spend more; points rarely beat interest
Your credit score follows you: apartments, car loans, even some jobs check it.
Your Credit Score: The Formula
Your FICO score (300-850) is calculated from 5 factors:
Pro tips:
  • Become an authorized user on a parent's old card (inherits their history)
  • Set up autopay so you never miss a payment
  • Check your score free at Credit Karma or your bank's app
My #1 Tip: Get Renter's Insurance
Costs less than a pizza per month (~$15-20/month)
Covers thousands in losses
What it covers: Theft, fire, water damage, hotel if uninhabitable
Your landlord's insurance does NOT cover your stuff
How Smart People Get Scammed
The Story: A personal finance journalist lost $50,000 to a phone scam. Over 6 hours, scammers posing as Amazon, the FTC, and the CIA convinced her to withdraw cash and hand it to a stranger.

Shocking stat: Young adults are 34% MORE likely to lose money to fraud than people over 60.
How social engineering works:
Isolation
"Don't tell anyone or you'll be arrested"
Fear & urgency
Threats about raids, warrants, family in danger
Incremental compliance
Small steps that gradually seem reasonable
Exhaustion
Keeping you on the phone for hours wears down critical thinking
Authority
Posing as Amazon, IRS, FBI, your bank — anyone you'd trust
The golden rule: No legitimate government agency will EVER ask you for money or tell you to keep their call secret.
Protect Yourself:
Daily Habits
  • Use a password manager (1Password, Bitwarden) — never reuse passwords
  • Enable two-factor authentication everywhere — especially email and bank
  • Be wildly skeptical — if it feels off, hang up and Google it first
  • Never share codes, PINs, or passwords out loud — not even to "verify your identity"
  • Check your bank accounts regularly — catch weird charges early
Red flags to watch for:
  • Urgency ("Act now or your account will be closed!")
  • Secrecy ("Don't tell anyone about this call")
  • Unusual payment methods (gift cards, wire transfers, cash)
  • Requests for remote access to your computer
When in doubt: Hang up. Call the company directly using a number YOU look up.
The Psychology of Money
Key insight: Money's greatest value is giving you control over your time.
What lasts:
  • Flexible hours
  • Short commute
  • Emergency savings
  • Retiring when you're ready
What fades:
  • The thrill of fancy stuff
  • Keeping up appearances
  • Status symbols
"Compound interest is like a snowball rolling downhill." — Warren Buffett
Resources
Books:
  1. All Your Worth — Elizabeth Warren & Amelia Tyagi (The 50/30/20 rule)
  1. Financially Fearless — Alexa von Tobel (Built LearnVest from scratch)
  1. Dumb Things Smart People Do — Jill Schlesinger (No-nonsense CBS finance expert)
Other
  1. The Day I Put $50,000 in a Shoe Box and Handed It to a Stranger: I never thought I was the kind of person to fall for a scam.
Start early. Keep it simple. Build freedom.