Monday, August 27, 2018
The 30-Something’s Guide to Wealth
Being 30 isn’t easy. When you were 20 everything made sense, well at least it seems like it now. Where is the party at, order pizza, call in sick for work. As a 34-year-old I have no desire to party, pizza hurts my stomach and I haven’t called in sick in 8 years. The work-life balance is a tough thing to master and so is the money part. I look at the age of 30 as a dividing line between youth and adulthood. We are still young enough to get it rolling and be wealthy, but the bullshit must stop. Today I am going to give my fellow 30-Somethings a guide to wealth. These 9 tips should get you thinking about the right things so that this decade has a lot more to show for it than the last one.
1) Take stock of your situation
You made it out of your 20’s alive. Sadly, some of our friends did not. Look back and think about all the foolish things you did during that decade. How many of those things could’ve ended worse? How many amazing accomplishments did you have? You are more than likely done with school now. You hopefully have a little money to your name or at least have reduced your debts. Hopefully, you have shaken off the up till 4 am on a Tuesday night phase. Either way now is the time to evaluate where you stand. Concentrate your evaluation on these 4 areas:
- Employment – Do you have or are on track for the job you want?
- Debt – Do you still have substantial debt, or is it gone or nearly gone?
- Savings – What do your bank accounts look like? Are you happy with where they are?
- Budget – Have you mastered spending less than you make, or are you living week to week?
Give yourself an honest evaluation on each of these points. Don’t be upset if you fail yourself on each of them. The point is to know where you stand so you can work on these areas. We will touch on them throughout the post.
Download your FREE Combo Expenses Worksheet and get your monthly budget on track! – Budget Boss
2) Get rolling with saving
I am going be honest here, if you are 30 years old and you aren’t saving a cent every month, you done messed up. You must save something, anything. Make it a priority, even if you have debt, to save a little bit of money every month. You are still at the age where even a small amount of savings can add up to a lot later. Not only that, this decade for you will go by super-fast. You don’t want to turn around and be 40 with the same 4 questions I mentioned in point number 1.
Your Own 1-Page Financial Plan – Budget Boss
3) Believe in the market
Remember when I said you must save something because you still have time to accumulate wealth later in life? The reason you still have time is because of the stock market. We are amid the longest Bull Market (winning session) in market history. These past 10 years have made many, many people wealthy, but what matters to you is this: Time is your friend and so is the market. There has never in the history of the stock market been a 20-year period with a down return. What that means is that if you invest your money now, it will almost certainly grow. Now what you invest in is a different story, so you should talk to a financial advisor. The S & P 500, most experts gauge on the overall market, has averaged an annual return of 10% since 1928. $100 invested bi-weekly from the age of 30-65 will yield you over $700K for retirement if you get that return. Yes 30-Somethings, believe in the market.
On the bull market’s ninth birthday, here’s how it stacks up against history – CNBC
4) Debt be gone
Hopefully, by now your student loan is gone. If it isn’t, don’t be sad. Get mad, very mad. Get very mad at debt and understand the damaging effects it will have on you as you roll through life. I have said it many times, but debt is the single greatest factor holding back the middle class in North America. No one gave us this debt. Not our friends, or our government, or our jobs. We did it all ourselves and we have the power to get rid of it. Currently, in your life, you must develop a healthy hate for debt. If you do not develop that trait right now, it will haunt you as you get older. The amounts get larger and the nonchalant attitude gets greater. Hate it with a passion and you will be more wealthy than you can imagine.
5) Snowball that s***
I always cringe when someone says, “Oh I can pay that debt off whenever.” Well if you can, why don’t you then? If you have small lingering debts, pay them off. Dave Ramsey preaches the effectiveness of the debt snowball and you what to know why, because it works! I used it, and it got me out of debt. Organize your debts from smallest to largest and pay off the small ones first. Use that momentum to battle through the larger debts until you are debt free. If you can pay something off right now, then do it! Why wait? Do you like paying interest on money owed? Do you like the feeling of having debts? Do you like making the banks richer? You only keep debts because you have grown accustomed to having them. I remember when I lived like that too. Now I am accustomed to not having them and having them scares the crap out of me. Get accustomed to that. Believe me, it feels a lot better.
How to Get Out of Debt With the Debt Snowball Plan – Dave Ramsey
6) Protect yourself
You should hear how many of my younger clients who mention to me that their parents have preached to them to get life insurance. Just so you know, your parents are right. A generation ago, everyone had life insurance. The children of the war generation knew life was fleeting, and poverty can come at any time. We now take for granted that we will live a long healthy life. If you are 30, chances are you have dealt with death in one way or another by now. Chances are you have seen how health issues can affect your life either through yourself or a loved one. Take some time now to get covered with life and paycheque protection. You are still young enough where it is dirt cheap. By the way, most chronic conditions develop over the next decade, so lock in your good health now while you can.
7) Employment
While the stock market is booming, the effects are missed sometimes on the average person. This is about jobs. Hopefully, you have the job you love, but if you don’t, don’t be upset. Take this time to map out what kind of work you enjoy doing and what kind of pay you need to achieve your goals. I will tell you something you should always understand: You owe no loyalty to any employer. Period. Employment is a relationship between an organization and its staff. Like any relationship, it requires a give and take. If you are not getting paid enough to survive, run. You cannot spend the next decade toiling for a penny-pinching boss. Do whatever it takes to make the type of money you need to get by, and flourish. Sometimes that means working at a job you do not like. Remember this, however: Your job does not define you, you define you. Not all of us can have the job we love, but all of us can have financial freedom. Your job should provide you the opportunity for that.
8) Evaluate relationships
I look at the age of 30 as a separation of experiences. Some of your friends will continue doing all the things they used to do when they were younger, and some will move on to growing up. If you have friends that are still partying every day, run for cover. If you have people in your life that bring you down, run for cover. If you have anyone in your life that isn’t contributing to you in a meaningful way, run for cover. Time will start to move quickly, and you cannot waste it on negative influences in your life. You are going to be in a position where you must make tough decisions over the next decade. You cannot have destructive people in your life influencing your decision making. Remember, it doesn’t mean they are bad people, it just means they aren’t for you. Release them like a curling stone and watch as they glide away. You will be better for it.
9 Financially Toxic People to Avoid – Budget Boss
9) Relax with the expectations
Our society places unreasonable expectations on 30-Somethings, especially on women. By now you should have a family, a nice home, a job you love, and a week in the Bahamas every year. Here is another nugget of advice for you: Never try to live up to perceived expectations. Your goals should come from within, not from society. We move at our own pace, and we grow as our life dictates. There is no mad rush to fall into the life you think you should have. Of those 4 things I mentioned, I only have 1, a job I love. I am happy as a pig in poop because I left behind what society thinks I should have a long time ago. When someone asks you, “Don’t you want to start a family and settle down,” smile and say thank you. The average life expectancy is now over 80 years old. You have plenty of time to get what you want out of life. Focus on yourself and you will always win. Oh and those things you think you should have by now, they come a lot easier when you have made yourself the best you can be.
Sometimes I wish I was younger again, but then I snap out of it and realize I am the best age there is. I am still young enough to have fun if I want, yet old enough to be taken seriously. 30-Somethings have a lot going for them as long as they don’t get in their own way. Take some time and be thankful for what you have, but never settle for what you got.
“Aging is not lost youth but a new stage of opportunity and strength.” – Betty Friedan
Email – joe@budgetboss.ca
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