Wealth Building by the Decades: One Thing You Can Do to Ensure Financial Success, Ep. #129

Wouldn’t you love to be able to do just one thing to ensure your financial success? Recently, Jeff Levine (@CPAPlanner) put this question out into the Twitterverse: Other than saving and investing, what is the one single most important factor to financial success?

Too often when dealing with financial decisions, we try to overcomplicate what is best for us. We liked the simplicity of the one thing aspect, so this week we are breaking down our version of one thing you can do each decade to achieve financial success.

What is that one thing you could focus on through each decade of your life to ensure your financial success?

Harness the power of compound interest while you’re young

If you are starting to build wealth in your teens and 20s you’re in luck. It won’t be challenging with the power of compound interest. If you start saving small amounts early, compound interest will help turn those small amounts in to large amounts later on. With just a bit of discipline and automation, you won’t have to work very hard to build your wealth. 

Pay yourself first

During your 30s life often gets busy. This is when it becomes important to remember to pay yourself first. If you do your saving and investing only after you cover your expenses then your budget is upside down. Automate your savings and charitable giving to help make it easier to pay yourself first. 

Don’t compare yourself with those around you

It is easy to compare yourself with others and in your 40s, this comparison can be heightened. However, if you risk your wealth to keep up with the Joneses you could end up losing it. This quote from The Psychology of Money encapsulates why you shouldn’t compare yourself with those around you, “the ceiling of social comparison is so high that virtually no one will ever hit it, which means it is a battle that can never be won or that the only way to win is to not fight it to begin with, to accept that you might have enough even if it’s less than those around you.”

Determine your definition of enough. Is it a certain amount of money in the bank? A bigger house? Consider your ultimate goal with your money and don’t move the goalposts.

Be flexible in your 50s 

Many people begin to experience setbacks in their fifties. It could be a layoff or a loss of assets due to grey divorce, but whatever that setback is, it’s important to be flexible. You may even need to reinvent yourself to adapt to the changes in your life. You’ve spent your life building your wealth, so now it’s time to maintain it. 

Hire a professional

Hopefully, in your 60s you are reflecting on a life well lived. This is a time to gain perspective. What you would like your money to be for? Would you like it to continue to grow or spend it in your lifetime? Should you pay off your mortgage? When should you take Social Security? When should you begin dipping into your IRAs?

In your 60s you need a plan. Hiring a financial professional can help you come up with a plan and help you gain perspective so that you can create a long term plan for your money. Let us know if we can help you learn how to take advantage of all the opportunities that are out there. Head on over to FinancialSymmetry.com and click Talk to An Advisor.

Outline of This Episode [4:06] What is the one thing you can do in your teens and 20s to help build wealth? [8:23] The one thing in your 30s that you can do to build wealth  [10:57] What should you be doing in your 40s to build wealth? [14:35] The one thing in your 50s that you can do to build wealth [17:49] What can you do in your 60s to build wealth? [21:30] Consider continuity in your 70s [22:55] What should you be doing in your 80s? [25:32] The progress principle Resources & People Mentioned Jeff Levine on Twitter @CPAPlanner BOOK - The Psychology of Money by Morgan Housel BOOK - The Millionaire Next Door by Thomas J. Stanley Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/  Connect on Twitter @csmithraleigh @TeamFSINC Follow Financial Symmetry on Facebook