Wealth Building Strategies for Your 30s

Wealthy individuals in their 30s prioritize a 25% savings rate and pay cash for significant purchases.

### Building Wealth in Your 30s: Key Strategies for Financial Success
* 💪 In your 30s, it's crucial to **maintain focus amidst the chaos of life** to ensure your financial trajectory continues **positively**.
* 💰 The first key metric to aim for is a **25% savings rate**, which is essential for **building wealth and securing your financial future**.
* 🚗 By this decade, it's expected that you transition to **paying cash for cars and larger purchases**, moving away from financing as you **build resources**.
* 📊 A survey revealed that **65% of millionaires pay cash for their vehicles**, highlighting the **importance of this practice for financial success**.
* 📈 If you save **25% of a $50,000 income**, you will accumulate **$112,500**, while a **$156,000 portfolio earning an 8% return** can also add **$12,500**, demonstrating the **power of compounding**.
* ⚠ However, don't become complacent; as your income increases, so should your **savings and investments** to maintain a **healthy financial growth trajectory**.
* 🏆 By the end of your 30s, aim to have saved **3.1 times your annual gross income** in invested assets, showcasing significant progress compared to the goal of **one times your income** in your 20s.
* 💡 Remember, wealth accumulation is not just about saving; it involves understanding the **compounding effect of your investments over time**.

[Music] All right brat, we talk about the 20s. Now let's move to the next decade. Let's talk about how to be wealthy in your 30s. And a lot happens in your 30s. Most folks, this is where the messy middle exists. 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. Bo 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 got to prioritize getting to 25% savings rate. And you're wondering, Why did you guys just make this up? Because I'm hearing so 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 it 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 a decision 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 finance 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 a, every year we do a millionaire survey, and this year we fine-tuned the questions, and we said, Hey, of our millionaire client, your last car, did you finance it or did you pay cash? And guess what we found. 35% finance a car, the other 65% paid cash. So millionaires do pay cash for cars. It is 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. We said, Yes, you're pay 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. We 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 $112,500. 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. 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 victory, 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 are 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 cars in cash or other large 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 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 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 one 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.

How to Be Wealthy by Age! (30-Year-Olds)

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In your 30s, it's crucial to prioritize a 25% savings rate to maintain a positive financial trajectory.

The transition from your 20s to 30s should involve a gradual increase in savings, aiming for 20% by the end of your 20s.

The importance of this savings rate is backed by math, and resources are available to show its potential impact on your financial future.

Transitioning to Cash Purchases in Your 30s

In your 30s, it's important to reassess your savings rate and consumption habits, aiming to pay cash for larger purchases like cars.

The majority of millionaires (65%) pay cash for their vehicles, highlighting the importance of this approach.

While financing may be necessary in the beginning, the goal is to graduate to all-cash purchases as you build wealth.

71% of millionaires financed their first car, highlighting the importance of flexibility in financial planning.

In your 30s, you may experience a portfolio that grows faster than your savings, with an 8% return potentially adding the same amount as your contributions.

It's crucial to avoid complacency and increase your savings and investments as your income grows.

Key Financial Milestones for Wealth in Your 30s

Achieving a 25% savings rate is crucial by the end of your 20s.

Being able to pay for cars and large purchases in cash is a key indicator of financial stability.

1 times your annual gross income in invested assets.

Compounding growth is driven by the accumulation of assets built from earnings, leading to exponential increases in wealth.

Many people underestimate the impact of compounding, thinking in linear terms rather than recognizing the potential for rapid growth.

As the numbers grow, the effect of compounding becomes increasingly significant, often leading to surprisingly large amounts over time.