Hello. I am 25 years old. I have now been out of college for three years. I have worked for two different companies, one with 100,000+ employees and one with fewer than 15, in two very different industries. I began investing my own money four years ago but didn’t really understand investing until two years ago. I bought a house in 2006 and sold it in 2007 because I got married.

When compared with the average 25 year old, I’d say I am in a good place financially. I do not have any debt, have some money saved, and have already started saving for retirement. Additionally, I have experienced many different kind of investments personally in my short life, both good and bad. I have learned some painful lessons and enjoyed some nice luck.

I have compiled everything I have learned into what I call my strategy towards financial prosperity. Since I’m sure some people will be quick to criticize, I’ll make it clear that in no way do I consider myself an expert. I have much to learn, and I am more eager than anyone to continue to learn. This strategy is my version at 25 years of age. It will undoubtedly change. I encourage you to continue reading and see if such a strategy might apply to your life and your journey towards financial prosperity.

Prong #1: Career - Active Income

Your first and most important component of your financial strategy is your job or your main career. This is my source of money that funds my lifestyle and my savings. My goal is to absolutely excel and achieve towards more responsibility and more money.

Additionally, my goal with my career is to have more freedom. This may be in the form of my own business or simply more freedom in my job. Such freedom will allow me to pursue other investments, other hobbies and other things in my personal life. More time, in my opinion, is equal to more money in many cases.

Related articles:

• How to move up fast in your 20s
• Why you need to set career goals
• Job hopping for dollars

Prong #2: A Second Income Stream - Passive Income

Creating a second income stream can be difficult and takes a combination of an entrepreneurial attitude, creativity and hard work. This second form of income can be anything from a blog, an e-business, or a cash flowing real estate property. The main thing is that this income is “passive” which means it doesn’t take eight hours of work, five days a week to achieve. Furthermore, the income can be a couple hundred dollars a month or a couple thousand dollars a month. The goal is any amount of additional income with minimal work to achieve it.

Creating a second income stream is a high priority for me at this point in my life. This blog that you are reading is one possibility (I’m not there yet), and I have a couple other e-business ideas.

One of my passions is to help others find passive income stream possibilities. I will be producing much more material on this blog regarding this subject in the near future.

Prong #3: Real Estate

Real estate is tough game right now. For most people, real estate should not be considered more than a place of residence. In many markets, it could be several years before we begin to see regular appreciation in real estate prices; therefore, the idea of making money in real estate is difficult. However, I don’t believe it’s impossible.

My goal, currently, in real estate is to find a depressed property in a great location where I can unlock some value. I am not going to make money on a house simply by buying it at a good price and holding it. More work is required than that.

I’m looking for a house in a great neighborhood, in a great location that will continue to thrive in the future. I am trying to avoid any developments that have a high rate of foreclosures (most neighborhoods developed in the last few years have higher rates of foreclosures). The worse shape the house is in, the better because I know most buyers are not going to be willing to buy a “project house.” I am hoping I can find a house that needs a lot of work, and can do some renovations or repairs to bring the house to its true potential.

I will continue to blog about my journey to find an undervalued house.

Prong #4: Trading and Investing In Stocks

Lastly, I want to earn a strong return on my money that I have saved. I have retirement accounts and a regular brokerage account where I have investments in stocks. My minimum goal is to outperform the market. In actuality, I am setting my sights higher: I want to achieve 20%, 30%, even 40% returns on my investments.

My strategy is to find the best investments, and to bet big on them. I have no interest in diversification. If I wanted to do this, I’d simply by an index fund and track the broad market.

More articles on my investment strategy:

• The 35 year challenge
• The 20s Money retirement plan
• Forget diversification

Conclusion

As a 25 year old, my goal is to work hard at my career, work hard creating a second stream of income, combining my place of residence into a value-unlocking investment, and outperforming the market every year with my equities portfolio. The combination of these four prongs should provide a bright future financially. Even if one prong fails to materialize, one of the others can make up for it.

What is your financially strategy? What “prongs” make up your plan of attack? If you haven’t formulated your strategy, there is no better time than now!

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