Investing

24-year-old who built a $150,000 net worth in 6 years says this money move was a 'game changer'

"I always made it a point to put money aside for savings first, then put money aside for investing."

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Obioha Okereke.
Courtesy Nick Joyce

Obioha Okereke, founder of College Money Habits, started investing when he was 18 years old, believing it would help him grow his wealth. His initial contribution was only $150. By age 23, that had become $100,000. Now, at age 24, he works as a consultant in Seattle and has a net worth of more than $150,000.

"Growing up, my dad talked a lot about generational wealth," says Okereke. "He was always emphasizing that because we are African American and there was no wealth within the family, that it was something we would have to acquire on our own."

Okereke wanted to build a net worth of $100,000: "To me, it was a number that represented financial freedom."

To meet his initial goal and continue building wealth, he has been strategic with his budgeting. Before his paycheck even hits his bank account, he contributes to both his 401(k) and his HSA. Then he employs one trick that's been, he says, a "game changer": He splits his paycheck between two checking accounts.

"The reason I like having two checking accounts is that it helps clearly distinguish: 'Here are the things I need to do and here are the things I want to do,'" he says.

Checking account #1: Needs

After taxes and deductions for expenses including his 401(k) and HSA contributions, 80% of Okereke's paycheck goes to this "managerial" account. "I keep a higher balance there if I need quick access to money," he says.

From this account he pays his rent and other bills. He has set up an automatic transfer of $1,250 to his savings accounts every month. He draws from this account to invest in not only a Roth IRA but also two brokerage accounts and real estate investments through an online platform. Collectively, his investments are worth more than $120,000.

"Investing is the only reason I hit my goal," he says. "I always made it a point to put money aside for savings first, then put money aside for investing."

Investing is the only reason I hit my goal.
Obioha Okereke

Checking account #2: Wants

The remaining 20% of Okereke's paycheck goes into this second checking account. This money is for spending on vacations, dinners out, or clothing — anything Okereke considers a "want," not a "need."

This separation makes it easier to curb spending, he says, as going over the amount he allots for his "wants" would require him to transfer money over.

"Every time you go over budget or every time you buy something you don't need, you take things away from your goals," he says.

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