If you're young and ambitious, you shouldn't over-invest in retirement funds.

Yes, even though they're tax free and have a crazy ROI compared to other investments.

Here's why

When I was 23, I got fired from the only real job I've had.

Instead of looking for a new role, I spent the next year traveling, learning, and focusing on growing my site.

I was making maybe $1-2k a month passively, but I didn't need to make much.

Why? Because I had a lot of cash.

I'd saved aggressively while at that job, and some of my previous side projects (like this one) had given me a bunch of extra cash to sit on. https://www.nateliason.com/blog/lifestyle-business

I hadn't followed normal financial advice. I maxed out my IRA, but that was it.

My job didn't have a 401k, and I didn't fill my SEP IRA from side income.

I just hoarded cash. And it turned into enough cash to spend a year learning, exploring, and figuring out what to do next.

If I HAD followed the standard advice, I would not have had as much of a cushion for that self-education.

It would have been locked up in retirement funds that are expensive to cash out, and I would have felt much more pressure to find a new job.

If I'd jumped into another job, I wouldn't have started @growthmachine__ and my site wouldn't be where it is today.

The ROI of tax-advantaged funds is great.

But the ROI of investing in yourself can be much greater.

I think I had ~$30,000 in cash. If I had put that into a retirement fund 100% in the S&P 500, it'd be worth $54,300 today. 1.6x. Not bad!

But by investing in myself, that $30k turned into... more than 10x that.

Most people want the same things in their work & financial life:

1. To have the freedom to say "no," to work, people, places, anything they don't like.

2. To do fulfilling, self-motivating work.

3. To make enough money to not worry about money.

I think they come in that order.

You need to have the freedom to say no in order to find fulfilling work.

And you need fulfilling work to reach the point of not worrying about money.

How do you get the freedom to say no? Cash.

When you have a year of living expenses in the bank, you're free.

When you're living paycheck to paycheck, you're trapped.

Compounding interest is great, but it's better when you start with a big number.

And the fastest way to hit a big number to compound on is investing in yourself, and rapidly leveling up how much value you can bring other people.

I still keep 25-30% of my NW in cash so I can jump on new opportunities and learn new things.

Cash is how you keep learning, keep growing, and keep expanding your capacities.

So my advice to ambitious young people?

Hoard cash.

If your company has a 401k match contribute enough to get that, and if not, do an IRA, but then just hoard cash.

Save enough till you have a year+ in living expenses.

At that point, you'll be free to take the time you need to invest in yourself and rapidly level up your earning potential.

The market can't beat the ROI on learning.