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It wasn’t that long ago that I was in my 30s. During those years, I built a career, bought a home, had children, made some good decisions, made some not-so-good ones, and survived a historic financial crisis. With the benefit of hindsight, here are 10 things I learned during those years about building wealth that may be useful for someone in their 30s.

Wealth Building Checklist for Successful 30-Somethings

1. Build your career and invest in yourself.

Unless you are planning on receiving a big inheritance or winning the lottery, the wealth you build will depend entirely on what you earn and save. And, what you earn is dependent on your skills, abilities, and unique expertise. It’s always valuable to invest in yourself but it’s particularly important when you are in your late 20s and early 30s. Once you get into your career and family life, it can be challenging to find the time for these endeavors. Although some people debate the merits of graduate school, obtaining an MBA was extremely helpful toward advancing my career. Moreover, other investments in myself such as participating in leadership development at Dale Carnegie Training and learning public speaking skills with Toastmasters were particularly impactful in hindsight. No matter what your profession is, there are likely many ways to increase your earnings through investments in yourself. That said, there are also degrees and licenses that are costly and likely to have no impact on your future earnings. Choose wisely.

2. Put savings on automatic.

Budgeting is really hard to do successfully and consistently. I’m all in favor of budgeting; however, the best way to ensure that you save for the future is to put your savings contributions on autopilot. Make sure you contribute to your 401(k) plan at work even if it feels like your cash flow is tight (at a minimum, make sure you put enough away to get the company match). Save additional funds by directing a percentage of your paycheck to an investment account or Roth IRA. Many custodians such as Schwab, Fidelity, or Vanguard have programs to automatically invest these savings on a periodic basis. Before you know it, these ongoing savings can really add up. Choose a low cost, diversified fund such as a Vanguard LifeStrategy Fund or Schwab MarketTrack Portfolio that has a long-term growth orientation to make things easy. Saving can be tough when your cash flow feels tight, but you cannot get these years back and not saving when you are younger will make it difficult to build your nest egg.

3. Work Toward “Critical Mass.”

It can be frustrating when you are first starting out with a savings plan because it may feel like you are making little progress. Even if you have a positive year with your investments, it may not seem like your wealth is really increasing that much. For instance, let’s say you managed to accumulate $50,000 of savings. You have an unusually good year with your investments and manage to earn a 10% return1 for a $5,000 increase in value, bringing your savings to $55,000. Not too shabby. However, now assume instead that you have $1,000,000 of savings and you earn 10% — your investments go up by $100,000! That’s critical mass — the idea that it’s easier to accumulate money when you have more of it. For most people, getting to critical mass with your savings can take a long time. That’s why it’s so important to start early, to save regularly, and to maintain discipline with your investments.

4. Watch for lifestyle creep.

One of the things I have observed as a financial planner is that it is very difficult to change one’s lifestyle later in life. Trying to downsize in your 60s and 70s is a lot harder than staying rightsized in your 30s and 40s. What one person views as a “necessity” really depends on what they have become accustomed to over time. It’s completely understandable and normal to want to increase your standard of living as you earn more; however, when your income increases through promotions or a new job, use that as an opportunity to increase your savings before you begin spending on other things.

5. Manage debt wisely.

When used wisely, debt can be helpful toward building wealth over time. When used poorly, it can be destructive and can potentially put you in a bind.

A responsible use of debt is when it helps you achieve something in the future that you might not have been able to achieve otherwise. For example, using debt to buy a home that you intend to live in for a long time can be a good use of debt. Typically, under a fixed-rate mortgage, your mortgage payments stay fixed for the life of the loan whereas rent payments typically increase. As time goes on, the fixed mortgage payments will be potentially more affordable than the rent on a similar home. Using debt to fund education can also be a good use, particularly if it allows you to increase your potential earnings. With any use of debt, you want to be thoughtful about how much debt you really need to use and how the debt is structured. As we know from the 2008–2009 financial crisis, there were many people who paid too much for their homes, didn’t make a big enough down payment, or used exotic adjustable-rate mortgages. We know how that story ended.

Bad debt is debt that funds spending today that you could not otherwise afford, causing you to have to borrow from your future self. Examples of this include loading up your credit card to pay for an expensive vacation or new television without the ability to pay it down in the near future. With many credit card companies charging 15%–20% interest rates, the debt continues to grow, making it harder to pay off. Another example is financing a fancy new car purchase when you could easily make do with a less expensive or perhaps used vehicle.

6. Get some basic investment and financial knowledge.

Whether you find investments interesting or not, you owe it to yourself to make a minimum investment of time in some basic financial education. You may ultimately choose a financial advisor or use an investing service, but how will you be able to decipher between a good advisor and a bad one if you don’t have some basic knowledge? If you have a limited amount of time to read, I recommend The Investment Answer by Daniel C. Goldie and Gordan S. Murray. If you have a little more time and patience, The Four Pillars of Investing by William J. Bernstein is one of my favorites and an excellent primer on investing. For more general knowledge on building wealth, I recommend Die Broke by Stephen M. Pollan and Mark Levine and The Millionaire Next Door by Thomas J. Stanley and William D. Danko.

7. Find good deals.

Admittedly, I wasted a lot of opportunities in my 30s to take advantage of deals and loyalty programs simply out of laziness. If you are good about paying off your credit card balances, there are some really attractive credit card offers available. Although some people like earning miles, I find cash back to be the most beneficial (see my colleague’s article Cash, Not Miles). Had I made most of my purchases using a cash-back card as I do now, I could have earned 3%–5% back over a long period of time. Other missed opportunities include not signing up for loyalty programs when staying at hotels, booking airline travel, etc. Many of these programs can be quite valuable over time and elevate your style of travel without a major increase in cost.

8. Avoid big mistakes.

It only takes one really bad financial decision to set you back many years. This can include such things as: making a big investment in something you don’t really understand; failing to diversify out of your company stock because you think it can never go down in value; buying way more home than you can afford and then losing your job without having an emergency reserve; and overspending on credit cards and racking up huge levels of debt. Of course, there are many other possibilities, but these are some of the common mistakes people make. Many of them are born out of greed, overconfidence, or lack of awareness. Building wealth is a slow, steady, and often mundane process that takes a long time.

9. Take care of yourself.

You are your most valuable asset. Good eating habits, regular exercise, and meditation, while seemingly not financial in nature, can have a major impact on your financial life. For one, these habits can lead to greater productivity and better relationships, which undoubtedly can impact your potential earnings. Second, they may prevent future medical issues, which could keep you away from work temporarily or permanently. Building a career and juggling a busy family life can be overwhelming and it can feel like there is no time for yourself. Budgeting time for yourself (no pun intended) is paramount to keeping a positive attitude and mindset.

10. Find the right advice.

Let me be clear: not everyone needs a financial advisor. Someone with the time, knowledge, and commitment can certainly manage their own finances and investments. However, don’t be penny wise and pound foolish. If you lack any of the ingredients just mentioned, hiring a good financial advisor can be very valuable even if just for the discipline he or she can bring. Several studies, including one from Vanguard titled “Advisor’s Alpha,” show that those who work with an advisor typically grow their wealth more than those who do not. Even though I am a perfectly fine gardener, I’m pretty sure my garden would be in complete disarray if I had not hired a professional to assist me. There are differing levels of financial advice; if you do not have a lot of assets to begin with, you might consider a robo-advisor or digital wealth manager such as Schwab, Fidelity, Vanguard Personal Advisor Services or digital advisors such as Personal Capital . As your assets grow and you desire a greater level of service and sophisticated advice, consider moving to an advisor who has that skillset.

If you are reading this as a 30-something, I envy you. The 30s were years I will always appreciate. But, they will come to an end. I hope this advice sets you up for a more fruitful and enjoyable financial life thereafter.


1. This return is for illustrative purposes only and is presented only for the limited purpose of providing a sample illustration. Any sample illustration is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond B|O|S’s control. Any sample illustration is not reflective of any actual investment purchased, sold, or recommended for investment by B|O|S and are not intended to represent the performance of any investment made in the past or to be made in the future by any portfolio managed or advised by B|O|S. Actual returns may have no correlation with the sample illustration presented herein, and the sample illustration is not necessarily indicative of an investment that B|O|S will make. It should not be assumed that B|O|S’s investment recommendations in the future will accomplish its goals or will equal the illustration provided herein. Past performance is no guarantee of future returns.

Filed under: Financial Planning

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