Money Basics in Your Twenties: How to Accumulate, Use Debt Wisely, and Protect Your Future

What are money, in the strict sense? Money is an internationally recognized currency with a defined value relative to other currencies. It allows you to acquire goods that become your property, or to rent them temporarily. When we think about money, though, we inevitably face the fact that most of us do not have as much of it as we would like. The natural conclusion becomes obvious: money never feels like it is enough. And if it were enough, you would already have the amount you desire.

Why is it not enough? For several technical reasons that we will not fully explore here. However, one simple principle helps us understand the core idea: if there were too much money in circulation, it would lose its value. This also answers the familiar question someone always asks in a friend group: “Why can’t we just print more money?”
We cannot, because the value of a currency, and of a country’s economy, is tied to the quantity of that currency in existence. Just like any other market, money follows supply and demand. When demand exceeds supply, value rises; when supply exceeds demand, value falls. Money is no exception.

From this point, we can simplify the entire system into two main actions: accumulating money and spending money. Accumulation includes investing, saving, or even holding money under the mattress, any scenario in which you keep the currency instead of using it. Spending also has two branches: investing in growth (like expanding a business or paying employees better to stimulate productivity), or spending for enjoyment or basic survival.

Before diving into spending, I want to focus on accumulation. The accumulation stage has pros and cons, but the biggest downside is the loss of purchasing power. When you hold money without using it, inflation gradually devalues it. Every currency ever created has suffered from inflation because money continues to be issued in ways meant to preserve economic stability, sometimes successfully, sometimes not. Regardless, the quantity of money tends to increase over time, and inflation reduces its real value.

The degree of inflation depends heavily on the strength of a country’s economy, political stability, employment levels, and more. But what matters for us is what we can control. When you keep money in a bank account, or even invest it, you will eventually have less purchasing power than when you first earned it. Not less nominal money, but less value.

You might ask: “But if I invest, how can it be worth less?”
If you invest €10,000 and after 15 years you have €15,000, you do not possess the €15,000 of today, you possess the €15,000 of fifteen years from now. Their actual power will be different. Investments must aim to outperform inflation; otherwise, they lose effectiveness. Over long periods, a healthy performance usually beats inflation in any developed economy, but this is not guaranteed.

That said, accumulating money also has very real advantages. The first is peace of mind, one of the core themes of this entire blog. The second is the ability to make strategic leaps in life. Many people, especially small business owners, improve their lives gradually thanks to the sacrifices and savings they make. In most cases, these sacrifices pay off in the long term.

At this point, we must introduce another essential component of finance and economics: debt. Debt is often seen as the shortcut to avoid years of saving and sacrifice. Unfortunately, in the modern world, especially in the United States, it is often used poorly. Many people take on debt for vacations, unnecessary purchases, or lifestyle inflation. Credit card culture encourages spending based on desire, not on actual financial capability.

Used this way, debt becomes a chain. It destroys financial progress instead of accelerating it. When you borrow one euro, you will repay at least one euro and twenty cents. Banks are not giving you money; they are selling it to you. The only rational way to use borrowed money is to make it generate more than what you owe back.

This explains why a healthy company is often indebted while still performing well. Debt, used strategically, allows companies to reach markets, tools, and structures they could not access otherwise. But this is a topic that deserves its own deep dive, so for now we will limit ourselves to this foundation.

All of this brings us to the core of the article: how wealth is created, and how wealth is destroyed. Saving money alone does not build true wealth; it only gives you the foundation to create it. Wealth comes from assets, liquid or illiquid, that give you real options in life. A house is illiquid, but it affords tremendous control and freedom. Liquid assets, stocks, deposits, cash, allow you to move quickly.

These categories should coexist. You need an emergency fund covering at least twelve months of expenses, a roof over your head, and the ability to invest your money in ways that expand your net worth. This often includes business debt, but only when you can prove, not merely believe, that your work is effective. Competence is validated by results, not self-perception.

On the other hand, wealth is destroyed through a predictable set of behaviours: buying things you cannot afford, taking vacations you cannot pay for, relying on debt to finance your lifestyle, purchasing cars whose maintenance you must postpone until your next paycheck, or buying a new iPhone every year when you use your phone only to scroll TikTok.

Creating wealth is, in many ways, easier than destroying it. And yet, looking around, I see far more people destroying wealth than building it. Perhaps I am wrong, but to understand this fully, we will need several deep dives into each pillar of the financial system.

Conclusion
Money is simple in concept but complex in practice. Once you understand how value forms, how inflation erodes, how debt accelerates or destroys, and how assets shape your options, everything becomes clearer. Wealth is neither luck nor magic, it is the cumulative result of decisions made consistently over time. I have intentionally simplified some concepts here, because each element demands a dedicated exploration. But before those deep dives, I would like to know what you think.