Wealth Building Strategies by Age: A Comprehensive Guide

Wealthy individuals in their 20s prioritize discipline, avoid consumer debt, and actively save, setting a foundation for future financial success.

### Wealth Building Through the Decades: A Guide to Financial Success
* 💰 Understanding the benchmarks for wealth at different ages is crucial, as the financial needs and strategies vary significantly from your **20s to your 50s and beyond**.
* 📊 In your 20s, focus on building a solid foundation by respecting the three key ingredients to wealth: **discipline, time, and a financial plan that aligns with your career goals**.
* 💡 By avoiding consumer debt and prioritizing savings, young adults can create a margin that allows for **effective wealth accumulation**, aiming for a **savings rate of at least 20%** by the end of the decade.
* 🚗 Transitioning into your 30s requires a shift to a **25% savings rate**, the ability to **pay for larger purchases in cash**, and recognition that your portfolio should begin to **grow at a rate faster than your contributions**.
* 🏡 As you enter your 40s, you should have the option for **early retirement**, the ability to fund abundance goals like **college savings or real estate**, and aim to have saved **12 times your gross income** in investment assets.
* 💸 In your 50s, the focus shifts to **maintaining wealth**, **paying off any remaining debt**, and **multiplying your wealth through strategic investments and charitable giving**, aiming for **23 times your gross income in assets** by age 59.
* 🌱 Ultimately, true wealth is defined by the **freedom to prioritize what matters most in your life**, allowing you to **enjoy the fruits of your labor** and **make a positive impact on others**.

how to be wealthy by age. Better yet, are you where you need to be? Brian, I love and get so excited when we get to do episodes like this. We talk about what should I be doing if I'm in my 20s, in my 30s, in my 40s, and how do I know if I've been doing the right things, and what are some benchmarks and mile markers for me to know do I fall into the camp of wealthy financial mutant, or am I behind the gun? What are the pieces and parts I need to put together? Well, this is the type of content you said it, and we got just as energized in our content meeting, is because a person, a 20-year-old or a 25-year-old with $100,000 is completely different than a 60-year-old that has $100,000. So, so is why does nobody actually tell you, Hey, if you want to be wealthy while you're in your 20s, you need to have this. If you want to be wealthy in your 30s, 'cause are

different by every decade. We're going to answer those questions today, and I'm super excited to share. That's my line. All right, here we are, so let's jump right in. Let's start at the very beginning: how to be wealthy in your 20s. Now, here's what's beautiful about your 20s: you're at the very beginning of the journey. You are just coming out of the starting blocks, and time is on your side in this decade and in this stage of life. Yeah, we talk about this often. Um, I try to go through this quickly. We always say you need to respect the three ingredients to wealth building. Um, the number one is discipline. Can you live on less than you make? And it's such an important thing in your 20s to kind of focus on those behavioral things because if you can live on less than you make, that creates margin in your life. That margin will give you the dividends of money. The second ingredient, and guess what for all of you 20-somethings, the most powerful

wealth-building tool that you can have is actually the third ingredient. You're a billionaire of time. You have so many seconds, so many minutes in your life, that if you just point that in the right direction, you're going to be able to maximize the power of compounding growth through the most valuable resource of time. So, in your 20s, being wealthy has a lot less to do with actual numbers and specific metrics, and it's much more about behaviors. So, we want to walk you through some of the behaviors that will define someone in their 20s being wealthy versus someone in their 20s that's not wealthy. The very first behavior, the very first thing that is an indication you were where you're supposed to be, is that in your 20s, you have a plan. You're not just letting life happen to you. You're not out there floating around, but you actually know what you want to achieve, and you have some understanding of the steps required to move you along on that path. Yeah, this is

one guys, we talk about the financial order of operations. If you want to get the free access point, just go to money.com/resources. It will load you up with the nonstops. If for my 20s somethings, I would be crazy. There's a reason we have it behind me. We have it here. Go check out my book, Millionaire Mission, because this thing for a 20s something is turbocharged. Because this will be the instruction manual that you'll look back in 20, 30 years and be like, That changed my life. So, get out there and make it happen. And obviously, understanding the financial order of operations will walk you through what to do with your dollars. It's the nine steps, tried and true, of where you should put your money. But even in your 20s, there's something else that you ought to be thinking about when it comes to having a plan in place, and it involves your J-O. What is the thing that I'm doing every single day to generate income? And what we have found is that

folks in their 20s that have figured this out. Folks in their 20s that are doing it right understand that they are in a career. They are working towards a goal. They're not just at a job. They're not just clocking in, clocking out. Yeah, we've done, and I want you to be purposeful on how you're spending your time because a lot of us, time is so valuable. And also, I've shared this, my own journey. The first thing that got me there was I did have to have a job that was actually making good income. And I didn't want to just have a job. I wanted to have a career. And you need to be very deliberate about what you study in college, who you choose to work with. Because when we found out, this is something I'm just shocked by when I cover this stat, is we do an annual millionaire study. And we asked our clients, we said, Hey, of our clients that are now millionaires, how many of you actually work in your field?

of study from college. And look at this, guys. We have 74% of our millionaires actually work in their field of study, meaning they were very good resource allocators. They said, Hey, my time is valuable. What are my aptitudes? I took inventory, found the intersection point, and now have created the incredible opportunity of actually working in what I studied. Now, contrast this with what does the average American look like. Yeah, according to the New York Federal Reserve Bank, only 27% of adults work in a field related to their major. 74% of our millionaires do, but only 27% of the general population. What that means is I think a lot of folks don't have a plan. They start out and say, Okay, I'm just going to go get this degree or start in this job or start with this idea, not actually planning out, What's this going to look like for the next 10, 20, 30, 40 years? If you can figure out early on how to have a plan around what you're doing.

For the majority of the time that you're awake every day, I think you're going to be much more likely to set yourself up for long-term success. Be purposeful with your time, that valuable resource. Don't go along just to get along and just float through life and run up a bunch of student loan debt with a major that's just not going to be purposeful. Take an active role in this. Yeah, that's a beautiful segue. The second indication of someone that is wealthier exhibiting wealthy behaviors in their 20s is that you have no consumer debt. You've recognized that credit cards are not going to be the way that you're going to get to wealth, that store credit and loans on consumable goods are not going to be the things that are going to propel you towards financial independence. Really, quite the opposite. They're going to move you away from your ultimate financial goals. Yeah, this is one of those. It makes me so sad for young people is because I get it. You're

short on money, and yet there's all these things you're out there doing life. You're adulting for the first time, and there's just so many things you want to do, but you just don't have the income to do it yet. And there's this false mirage of debt that says, Hey, don't worry, it's okay if you don't make it. You can fake it until you make it by just using the shiny little object of this credit card, and we'll be able to answer all your dreams. And don't worry, you'll be able to catch it up. You'll get promotions. No, this is a bridge to nowhere, guys. So I want to caution you when credit cards are charging you now 25-30%, and you're hoping to only make 10% on your investments. This is not the way you're going to be wealthy, so don't fall into this consumption trap. Yeah, compound interest is the eighth wonder of the world, and it can either be your

most amazing ally or can be your fiercest adversary. You need to understand that in your 20s, well, what we found is that in 2023, the average non-mortgage debt for a Gen Z American, this is someone in their 20s, was $155,000. That's $155,000 in the hole of money that is working against you that we would rather be working for you. So, if you're one of the people who find yourself in this situation, we would encourage you to go back to number one and have a plan in place. How am I going to knock this debt out? How am I going to get out of this? And generally, there are two bodies of thought on the best way to pay off debt. You can go with the debt snowball, which entails saying, I'm going to pay off my smallest balances first, and it's going to give me some wins along the way. So, I'm going to pay off one, and I'm going to apply that to the next one, and the next one, and I'm slowly going to

gain momentum, or if you're mathematically minded and you want to go with the optimal strategy, you can do the debt Avalanche. You list all your debts, highest interest rate first. You begin paying on the highest interest rate, and then you move to the next, and move to the next, because you need... if you have credit card debt, if you have any sort of Consumer Debt, you need a strategy in play so you can get out of that, so you can start getting your money to start working for you. Yeah, so know thyself, and then just choose the method. We don't choose favorites on this. I know our math-mind people, we like the debt Avalanche, but if you're a person that needs a little attaboy every now and then to keep you going, just take advantage of it. There's nothing wrong with doing the debt snowball. The biggest thing is get out of debt, especially the Consumer Debt with the high interest rates. Let's talk about another thing that I see traps that... that if you want to be successful in your 20s is don't

fall into driving your wealth around. How many people have car payments that are $700, $800,000 a month? Guys, literally, if you were investing this amount of money, it is a multi-millions of dollars in retirement. So, don't drive around your wealth. So, we've created a system to help people not fall into that trap. Yeah, when it's time to buy a car, we love that if you can pay for a car in cash, but for unfortunately for most folks in their 20s, that's not an option. We have to borrow money. We have to finance in order to be able to buy an automobile. So, if you're going to do that, we want you to follow our 238 rule, which simply says you're going to put at least 20% down of the car, whether you're buying new or used. You want a 20% down payment. You're going to pay it off in 3 years or 36 months or less. You're not going to finance it any longer than that. And then all of your payments cannot exceed 8% of

your gross monthly income. So, whatever your car payment is, or if you're a dual-income household, dual-person household, you have two car payments, it cannot exceed 8% of your monthly household income. If you can follow those rules, you're going to likely keep your finances inside the lines and not let yourself be someone driving around the wealth. But that's not all, but wait, there's more. I always like to put these little asri out there is when we're talking, when we think 238, we're thinking Corolla, we're not thinking about Land Cruiser. This is basic transportation to get to your first wealth builder of that job. I don't want you, if you're trying to buy luxury anything, that is a nice car. This is something I'm going to give you a little, it's same as cash, 12 months, same as cash, just like all the furniture salespeople and everybody else out there, but you're not using this for luxury. The second thing, if your monthly car payment exceeds what

your monthly investments are you're doing this wrong. We want to make sure that you're not driving around your wealth, so we've got to make sure what's going into your Roth IRA, what's going into your company 401K, is exceeding what that monthly car payment is. All right, now the third indication of someone in their 20s is wealthy or is moving on their way to being wealthy is you're actually hitting your savings goals. You recognize, I need to be exercising discipline. I need to be putting money to work for me for the future, and you're actually doing it. You're not all hat, no cattle. You actually put your money where your mouth is, and your savings rate is starting to show that. Yeah, this is let me give you a tool 'cause this is so powerful. If you go to money.com resource, I want you to play around with our wealth multiplier tool. This is something so valuable if you know every dollar has so much opportunity to grow upon itself because here's another risk in your 20s.

you're going to watch our content. You're going to read Millionaire Mission. You're going to get super excited when you find this. I just want to make sure that you keep enough go with it or stick with it through 24 months later, 36 months later. So, we've got to have some way where you're actually building upon your successes. You get pay raises, that you keep increasing what's going into your investments. And it's okay if you can't hit the number tomorrow. Start somewhere, and wherever you start, figure out on what cadence can I improve. If I start with $50 a month saving, when can I move it to 75? And then when can I move that to 100? If you start your 401k and you start at 3%, great. When can I go to 5%? When can I go to 10%? And figure out how you move through that in time because the goal is to get your money working for you. And the earlier you do that, the more powerful it will be. That's

exactly what the wealth multiplier shows. So, by the end of your 20s, as you're rounding it out, if you want to be defined as someone who is wealthy in their 20s, we would expect to see a few things. Number one, no consumer debt. You have knocked out and gotten in control of your consumer debt. Number two, you've hit a savings rate of at least 20%. You've recognized the power in having your dollars work for you for the future. And then number three, from a savings standpoint, you've saved up one times your gross income in investment assets. So, whatever your income is at 29, you have that much in invested assets by the end of this decade. Now look, if you're 25 and you're watching this, we know that this is aspirational. That's why we made sure we did every one of these decades is by the end of the decade. What does that transition threshold look like for you? So, right now, if you're saving 10% of your income, let's shoot for next year.

when you get a pay raise, 60% of that pay rise, let's put it towards your investments and increasing your investments, 40% only towards lifestyle. You can get to 20% by the time you finish the decade of your 20s. Also, one-time gross income of investment assets. Guys, we got to get that money growing upon itself. That compounding growth is going to require you to get to some type of level of critical mass or bowling point. Don't sleep on that. Let's make this money work for you. All right, BR, we talked about the 20s. Now let's move to the next decade. Let's talk about how to be wealthy in your 30s. A lot happens in your 30s. Most folks, this is where the messy middle exists, and you have a thousand different things pulling you in a thousand different directions. But you cannot take your eye off the ball because if you want to keep your financial trajectory moving in the right direction, you have to be disciplined at

this stage of life and the very first metric, the very first indicator that someone is doing what they're supposed to be doing in their 30s, is they're actually hitting the 25% savings rate. Look, I get it, mentioned the messy middle. You're short on time, you're short on money, and you feel like life is just whooping you in all directions. But I got to tell you, I gave a lot of grace in your 20s while you're figuring out the whole job that turned into a career. And I understood that in the beginning, it might start with 5% and grows at 10%, then 15%, hopefully by the any time you leave your 20s, you're at 20% savings rate. But in your 30s, you've got to prioritize getting to 25% savings rate. And you're wondering, Why did you guys just make this up? 'Cause I'm hearing so many many financial gurus. When you really dive into their rules, you're like, Oh, they just made that number up. No

There is actually math connected to what we're sharing with you. If you go to money.com resources, you can download a copy of what 25% can do for you. And here's what I want everybody to recognize. Look in your 20s. This is why we can tell you it's okay to be aspirational because even if you're doing 10%, 15%, it goes a long way. But look what happens in your 30s. If you don't get to 20% to 25% as fast as possible, you're going to start seeing that might not be able to replace your current income when you actually reach the threshold of retirement. You have to start figuring out. So not only do you have to get your savings rate where it should be, even the way that you consume is going to start looking a little bit different. Likely at this stage of life, you're now paying cash for cars. We gave you some leniency inside your 20s. We said, Okay, if you have to borrow, if you have

to finance, then you're going to follow 23A. But hopefully, by the time you get into your 30s, you have now graduated beyond that, and you can actually begin making decisions to be an all-cash purchaser when it comes to automobiles or larger consumable goods. Yeah, we get a lot of flack for that. We have 238 for allowing people to finance cars when they need that reliable transportation, but we have a no hypocrite policy. I want, I always try to write rules or share my own journey, and I know when I first started out, I needed a financed car. But I know as I built wealth and I started having resources behind me, I started paying cash 'cause cash is the way we want you paying for cars. But we went a little step further. We said we had, every year we do a millionaire survey, and this year we fine-tuned the questions, and we said, Hey, of our millionaire clients, your last car, did you finance it or did you pay cash? And guess what we found? 35% financed a car, the other 65%.

paid cash, so millionaires do pay cash for cars. It's an accurate statement, so that's why we want to encourage you in your 30s. Let's start paying cash for those vehicles. They depreciate rapidly. You don't need to be falling in that trap. But I do want to remind people. So you go, Why do we have 238 then if cash is ideal? Because then we ask these same millionaires who said, Yes, you're paying cash for your vehicles. The majority of you are. But back when you got your first job and you had to buy your first car, how many of you financed it? We found out 71% of our millionaires did finance that first car. So that's why we give you this grace, give you this flexibility in the system. But you need to take those training wheels off as soon as possible and start paying for cash. And the third thing that wealthy folks in their 30s will begin to experience is a pretty exciting milestone for you to cross through. You might recognize in your 30s that your portfolio now has the ability

to add to itself faster than you can add to it. Your investment rate of return outpaces your savings rate, and let me show you how the math works out on this. Let's assume that you have an income of $50,000. If you're saving 25% in your 30s like you're supposed to be doing, then you're going to save $122,500. However, if you're someone in your 30s and you've accumulated a portfolio value of about $156,000, and that $156,000 portfolio can earn an 8% rate of return, not only if you're saving 25% and you're adding $12,500 to your portfolio, but your portfolio itself is also adding $12,500. When your portfolio can actually save upon itself even more than you can, that is an exciting metric showing you are moving in the right direction on your wealth building. Yeah, I want to give a word of caution. Don't get complacent on where your income and where your savings rate is, is because you will need

to increase is because as you make more, you need to save and invest more because we did the, you know, in our notes we wrote out like if your income was $100,000, that portfolio value required to kind of generate the same type of savings rate or return on the Investments is going to be over $300,000. So you can quickly see don't just celebrate. I want you to celebrate the small victories but make sure you know what the why is and where you're going to so you can stay on task. So if you want to be wealthy in your 30s, here's some things that you ought to be checking the Box on as you leave this decade. Number one, you've hit your 25% savings rate. Number two, you recognize you have the ability to pay for cat, pay for cars in cash or other large purchases, purchases exclusively in cash. And then number three, by the end of this decade, by age 39, you've saved up 3.1 times your

annual gross income. So, whatever your earning power is at the end of this decade, you have three times that amount in invested assets. Here's what I think is fun about this. We showed when we went through the threshold of closing out our 20s. We were the goal was to have one time of our income. You can see as we close out our 30s, it's three times. You realize I know that there are a lot of people who will be like, Man, that's a lot of savings. It's not just your savings because that one times of your earn, you know, your assets that you built up of your earnings of whatever your salary is. That money is going to be compounding. It's going to be a joint effort, and you're going to see as these numbers grow. This is why compounding growth is so exciting is because we all think linear. We think, you know, it's going to be 1, 2, 3, 4, 5, 6, 7. It's actually going to go 2, 4, 16, and then the numbers start

getting so big you're like I'm not doing public math. All right, so now let's talk about how to be wealthy in your 40s. So far, it's been Sprint, Sprint, Sprint, Sprint, Sprint. Well, as you get into your 40s, the mindset might change a little bit. There are some things that you might recognize as you round into this decade that was different than your 20s and 30s. In the 20s and 30s, you're really focused on am I saving, am I doing what I'm supposed to do, am I doing what I'm supposed to do, am I doing what I'm supposed to do. But as you get into your 40s, I think your mindset starts to shift to become where am I at on my journey. I like to now look. I've left this decade, unfortunately, but I do think about some of the conversations I've had with my neighbors, my peers, and I think, and all the research shows, by the way, this is the decade that the majority of millionaires cross into this.

threshold. It's usually around somewhere between 47 to 49, depending upon what year you look at the research data. So, you're going to really start to see some amazing things happen, and that's why I think the number one thing is you recognize that yes, Social Security and all those things kicking in in the late 60s, but you are going to have the potential to have an early retirement. Maybe that means 55, maybe that means even earlier, but when you start to see the power of your army of dollar bills, you do recognize that early retirement is right around the corner and an option for you, and you're going to recognize that this is very different from a number of your peers. You're going to look around and other folks say, Man, I hope I can retire at 65. I hope I can retire at 70. But because you've been doing the hard work through your 20s and 30s, you're now starting to see, I'm going to have options. I'm going to have flexibility. Well, one of the great ways

you can determine if you are there is. We have a course called Know Your Number. You can go to learn.moneyguide to do the Know Your Number course, and you can actually define, based on the lifestyle you want to live in retirement and based on what you've accumulated right now today, Am I on track? Am I ahead of the curve? Am I behind the curve? Or do I not even know what the curve is? Well, if you've been doing what you're supposed to do in your 20s, you've been doing what you're supposed to do in your 30s, I think a lot of people in their 40s are going to recognize, Man, I'm actually in a great position. Perhaps my future is going to look differently than I thought it was even going to be possible back in my 20s. It's because of how hard your money can start working for you. Yeah, definitely do the work, figure out, are you ahead of the curve, behind the curve, or right where you need to be? We're giving you the tool.

It's not only a course; it's also a great tool to help you know exactly where you are. I think number two on this is one that's very important for me. My oldest is 21 years of age, and I'm starting to bear fruit and see this. Teach your children to be good with money, you know, and don't just wait until they get to adulthood and go, Surprise! We want you to learn about money. No, this is something you need to be very deliberate about all while you're raising your children. How do you start talking about valuable concepts early and often so that they understand what money is and what money is not, so that when you get to your financial future and your abundance point, that you actually feel very comfortable talking to your children and also know, you know, they appreciate hard work, they know how money, what it can and cannot do, and you're, they're going to be better prepared for everything that's going to come in the future. You may be asking the question, H

this is about me being wealthy in my 40s. What my kids have to do this well. We know from The Millionaire Next Door Dr. Stanley wrote that one of the seven traits of millionaires is that their adult children are not economically dependent on their parents. Meaning because you had these conversations with your kids and because you've taught them how to do money well they are not an expense of yours in retirement slowly dwindling away your wealth. You have taught those birds how to leave the nest and go fly on their own. Well you have to start those conversations early so that it will take so that they will be prepared so that when you want to love on your kids you get to do it out of choice not out of necessity. Well another indicator that you're doing things right in your 40s you guys know we love the financial order of operations. You can get your copy money got.com resources but I do think it's important steps 1 through 7. This is kind of like that Financial Foundation a lot of this is to

keep your life out of the ditch by having emergency reserves. That's why there's two steps: steps one and four. And but then we start building wealth with five, six, and seven. I'm hoping by the time you're in your 40s, you get to step eight, which is prepaid future expenses or the good time rock and roll name is abundance goals. Because this is when you actually get to focus on saving for the kids' college. This is when you actually get to start thinking about, Hey, how do I want to live life? Do I want to start saving for weddings? Do I want to start getting into residential real estate? Do I want to drive a nicer car? We just hope that if you do this right, you should start to bear fruit in your 40s so you can do these abundance goals. It's no surprise the things that you get to think about shift. If you're someone who's behind in your 50s, your goal or in your 40s, your goal is, Oh man, I got to get to 25%. I got to get to 25%. I got to

get to 25%. If you've already mastered that, you've already done that, then you get to focus on this additional stuff. Then you get to focus on those Next Level goals, which is so exciting. That's where you want to be, and that's how we define someone as wealthy in their 40s. So, as you approach the end of this decade, as you're rounding out at age 49, there are a few boxes we think that you'll be able to check. Number one, you probably have an option for early retirement. You've recognized, I've done the hard work; now I get to control my financial future instead of letting my financial future control me. You've probably also been able to begin funding those abundance goals, whatever that may mean for you, whether it is saving for a vacation property, saving for the wedding, or saving in 529s. You can now begin focusing and allocating resources there. And then the third thing is, if you are thinking about early retirement, you're thinking that age 55 is when you

want to be able to replace a substantial portion of your pre-retirement income. Then we would say by the end of your 40s, you should have 12 times your gross income saved in investment assets. This is why math is so cool. I mean, it really is. Math is sexy because when you're doing this exercise, 'cause this will get cut up into highlights. When you end your 20s, you're hoping you have one time your income saved up. When you end your 30s, you're hoping that you have three times your income. When you end your 40s, you're hoping that it's 12 times. You realize that is what compounding growth can do for you. This is not just yes, you're making more money, yes, you're saving some, but a lot of the heavy lift is the two and three decades of saving, investing. Those good behaviors, those good discipline actions are now carrying all the heavyweight and making this look so easy. So guys, get out there and make it happen. This is super exciting stuff.

right, Brian. Now, let's move to the decade that you're in, the EXC decade. Let's talk about how to be wealthy in your 50s, because again, we've said the entire time it's been this mindset shift through your 20s, 30s, 40s, and now into your 50s. And even in your 50s, I think that the mindset shift, mindset shifts, you've been focused so much. All right, you've been focused so much early on in your journey on the make wealth behaviors, and then you even kind of get into the maintain wealth behaviors. But now here in the 50s, you change what you think about. You even change maybe some of the goals that you have over the long term. Yeah, we were talking about earlier, you know, when you're in your 20s, 30s, definitely the make wealth phase, but we know in the '40s is when most people cross into seven figures, but 50s, we are transitioning now from the make to the

maintain, and what that means is we need to take into account the risk. Debt is a big thing, and you guys are so kind because when we wrote this, they wrote, You could be debt-free, could be debt-free, because you know we are very keen on sharing that under 45 years of age. We think you have a lot of compounding growth. That wealth multiplier is super powerful post-45. Now, your wealth multiplier is not as big. You've also had reached some CR IAL Master, the bowling point to a lot of levels. So, this is a great time when you're in your 50s. Let's pay off all that debt, even if it's a low-interest rate. Let's pay it off so you can drisk a portion of your life. Okay, po, I know I have not, 'cause my, I have a 2 and a half % mortgage rate. But that's why it's a good, that's why it's a, that's what it's. I have enough money. I could be dee so.

remember we have no HIPAA policy here, so you guys were very good with that language app, exactly what I was looking for. You now have the ability where if you wanted to be debt-free, you could write a check to do that. But if you are someone, one of these vast amount of Americans that have a super low-interest mortgage, you may decide it does not make sense for me to be debt-free, and that's okay, so long as you have the ability to do that. That is one indicator that you're wealthy in your 50s. The second indicator is not only are you focusing on that maintain wealth, and are you focusing on that risk adjustment, but now you've even entered into the next phase where now you get to start thinking about how do I multiply my wealth, how do I actually use this for not just the near or intermediate-term abundance goals, but how do I use my wealth for something bigger than myself. Yeah, I think this is, remember I share often that I think what people think will happen with their wealth building, it's

it's very simple. I mean, because we talk about this, this is an incredibly simple endeavor, but that doesn't mean it's easy, is that yeah. Discipline, money, you give it enough time, you're going to be wealthy. But what we never talk about is how complex it actually gets at some point. So, that's why I don't mind sharing that when you get to the multiply level, you're probably going to get the opportunity. You could be more generous. You're going to think about how you can charitably give stuff, how you can maximize the tax planning. All these complications will come your way, even if you don't seek them out. And that's a great segue into sharing, is that this is also another opportunity to play out the full abundance cycle and actually take the relationship to the next level. This is exactly what we get to do for clients. I even, um, I have a share. I had a client for years. Um, they went away for a little bit. They, I think they, they just felt like, Hey, Brian, and, and has done such a

good job. I can move on, and I don't need anymore. I don't need them anymore, or I'm going to a even cheaper advisor. Okay, okay. I now, and this is what I love about what we get to do for a living. These people come back and then, you know, hat in hand and be like, Okay, yeah, I, I, but this happened, this happened, and this adviser just wasn't equipped because they were more of just an investment company, or they didn't, they, or they were a flat fee that just didn't know how to deal with this level of assets. And that's why I will tell you guys, we don't, we, I love the generosity, I love the abundance we get to share with you, is because when you have things happen to you in life, we get to plant the seeds, give it to you completely free, but we're also here, we'll leave the light on the porch so you know where to come home to when it's time to take the relationship to the next level, and even as we help

people navigate that as we do work with people transitioning from their working years into their financial independence or retirement years. We're able to help them understand this third part of a wealthy indicator in your 50s. That now is a moment where you get to own your time. You are no longer bound by doing what you have to do because someone else said you could, because you're trying to achieve something. You now get to focus on what you want, when you want, the way you want, and how you want to focus on it. That is the definition of financial independence. So, if you're beginning to feel that way and experience that in your 50s, we would argue that you are someone who has attained wealth at this stage of life. Yeah, I think the majority of people have to do things out of obligation. There's a small select group of people, and a lot of you are financial mutants, you to do things on your terms. And let me tell you what's the real, really cool thing when you're this financial mutant that does things on

your terms. When you wake up in the morning, you know in your own small way you're making things better out there because you're waking up with purpose. You're doing what you want. You're doing it on your terms. You're doing it because you get pleasure from actually whatever value you're adding or whatever thing you're great at. That's a good place to be because I think a lot of people who have to do things out of what they have to do, the obligation because they have to pay debts or they just can't afford their own lifestyle without this job, that's a different thing. And I'm just trying to help you live that different life, to be that Financial mutant. I know this isn't what's out there on the pages of consumption or what they perceive wealthy people or rich people do, but this is why we're different. So, as you are entering the end of this decade, as you're getting out to age 59, there are a few things that we would expect to see for wealthy folks.

number one, you either have a paid-off home or paid off all debt, or the ability to do so. You could write a check to knock that all out. You're focusing on the multiply wealth stage. You're now recognizing that not only have I made it and been able to maintain it, but now I can actually multiply. I can pour into those things in life that truly matter to me, that I truly care about, that truly create the life that I want to live. And then, from a financial metric standpoint, if you are planning on retiring at the end of this decade, we would expect for you to have 23 times your gross income in investment assets. Again, that assumes an 80% replacement ratio of your age 59 income, assuming a 3.5% safe withdrawal rate, so very, very conservative. If you are there, we would argue you're at the financial Independence Point, and you would qualify as someone who is wealthy at this stage of life. Guys, get in there to money.com, and then even go take advantage of all

of our free stuff at money.com resources. We're loading you up. I love that the kind of closing section of this show is talking about multiplying your money. Part of that might be that you want to help the kids out while you're here or the grandkids and just see the fruits of all of your hard work, all of your discipline paying off. So true wealth is the freedom to focus on what really matters to you. I'm your host, Brian Preston, Bo Hansen, Money Guy Team out.

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The Money Guy Show

In your 20s, focus on discipline, living below your means, and leveraging your time for compounding growth.

Having a clear plan and being purposeful in your career choices are essential for financial success.

The right behaviors and a strong financial order of operations can set you on the path to wealth.

74% of millionaires work in their field of study, compared to only 27% of the general population, highlighting the importance of having a plan.

Avoiding consumer debt is crucial for financial independence, as credit cards and loans on consumable goods can hinder wealth-building.

The average non-mortgage debt for Gen Z Americans is $155,000, making it essential to have a strategy for paying off debt, whether through the debt snowball or debt avalanche method.

Building Wealth in Your 20s: Key Strategies

Avoid driving your wealth away with high car payments; aim for a 20% down payment, a 3-year payoff, and keep payments under 8% of your gross monthly income.

Focus on basic transportation and ensure your monthly investments exceed your car payments.

By the end of your 20s, aim to have no consumer debt, a savings rate of at least 20%, and one times your gross income in investment assets.

In your 20s, allocate 60% of your pay raise towards investments and 40% towards lifestyle, aiming for a 20% savings rate by the end of the decade.

In your 30s, prioritize reaching a 25% savings rate and start paying cash for major purchases, like cars.

The journey to wealth involves discipline, critical mass in investments, and transitioning from financing to cash payments for a more stable financial future.

In your 30s, saving 25% of a $50,000 income can lead to $122,500, while a $156,000 portfolio with an 8% return can also add $12,500, showing the power of compounding.

1 times your annual gross income in invested assets.

In your 40s, the focus shifts to evaluating your journey, with many millionaires crossing the threshold between 47 to 49, and the potential for early retirement becoming a realistic option.

The "Know Your Number" course helps individuals assess their retirement readiness and financial trajectory.

Teaching children about money from an early age can lead to their financial independence and reduce dependency on parents in retirement.

By following a financial order of operations, individuals can build wealth and start focusing on abundance goals, such as saving for children's college and planning for early retirement.

By the end of your 40s, you should aim to have 12 times your gross income saved in investment assets.

In your 50s, the focus shifts from making wealth to maintaining it, with an emphasis on paying off debt and managing risk.

This decade also offers the opportunity to multiply wealth and give back through charitable contributions and tax planning.

Achieving Financial Independence in Your 50s

Financial independence in your 50s is marked by owning your time and doing things on your own terms.

Wealthy individuals at this stage often have paid off their debts and are focused on multiplying their wealth.

By age 59, having 23 times your gross income in investment assets is a key indicator of reaching financial independence.