Wealth is sought out for but not the simplest to achieve; unless you work for it. Throughout your teenage years and 20s, people are driven by ambition, dreams, and goals. They are building the foundation for what they hope will be their career and future.
Now, welcome your 30s. There is a feeling of establishment as people settle down, invest in a home, start a family, etc. That’s when the financial obligations knock on the door, sometimes feeling overwhelming.
Prepare yourself ahead of time, avoiding that feeling. Know your investment options and begin building your financial wealth, whether it is through commodities, stocks, 401k, etc. It’s not too late to start or continue building upon even in your 30s.
How Do You Define Wealth?
Wealth is defined by each of us differently, so what do you envision when you hear the term wealth? Perhaps you see yourself living in paradise on a Hawaiian island or driving down the interstate in a Lamborghini.
In the big picture, wealth translates to a form of riches. Sure, most think about cash (money), but wealth is much more than that and includes other assets, too, such as commodities, real estate, and more. But think of wealth as a form of financial security.
Let’s explore four categories of wealth you should recognize, relate to, and grow accustomed to.
#1 | Financial Wealth
The most common category of wealth relates to finances, or simply put - money. For some, riches pour into their lap while others work hard to see an impact. Why? Because everyone controls their money differently.
Managing money is the golden ticket in building financial wealth. There is no pressure, but if you are serious about adding money to your piggy bank, find the time to learn how to manage your money best.
Financial wealth is where we want to focus, but let’s continue introducing the other three types as they are all interconnected when building wealth.
#2 | Social Wealth
Do you have anyone in your inner circle that you can go to for support? It could be a spouse or another family member, a close friend, or someone in your community. Why do we ask? Because the people you decide to spend time with are an example of your social wealth.
Whether you label yourself as an introvert or an extrovert, social wealth begins with just one person you could go to when you need them. Humans are an interesting species, being that we get emotional a lot. That is where social wealth becomes a matter of importance.
#3 | Time Wealth
Time is precious to us all. If only we were allowed more time in a day to complete everything on our to-do list, right?
Time wealth begins with how we plan to roll out the day. Perhaps you want to be a couch potato and binge on shows on Netflix, you have a never-ending chore list to complete, or you decide to take on extra jobs for more cash, as examples.
Honing in on the latter, people absorb so much with needing to make extra money that they forget there are other options, such as earning a passive income.
Regardless of what your time is focused on, remember that time is essential, and for you to build wealth, you’ll need to find a balance between this category and the other three discussed.
#4 | Health Wealth
Kick stress and anxiety out the door. Your physical and mental health is just as important as the financial wealth growing in your investment accounts.
Physical and mental health drive our behavior and lifestyle as human beings. It’s like being on a poor diet. For example, bad eating habits can lead to weight gain. Thus, unfavorable mental health status or deficiency of inactivity or exercise may lead to unsatisfactory decision-making.
Stay positive and remove stress factors as much as possible. Keep your body energized through exercise and healthy eating habits. And most importantly, live with a purpose. It drives your state of mind leading wealth to your door.
Tips to Strengthening Your Wealth in Your 30s
Are you working for your money? Or is your money working for you? By the time you reach your 30s, Fidelity Investments recommends that savings and investments total your annual salary. Can you relate?
If not, don’t worry. Take a seat and listen in as we share tips that place you on the right path towards healthy investing habits and increased wealth.
Encourage Smart Spending Habits
Keeping your spending habits under control is step one. It is conquered through the use of a budget. Have one? If not, we encourage it.
A budget sets the ground rules. It lays out your total income and your expenses; it’s as simple as that. It’s a smart tool to live by. It sets your boundaries and keeps you out of debt. Add an extra layer to your budget for a rainy day fund. This is great protection against unforeseen events.
Another positive money spending habit is to limit your purchases. Don’t impulse buy. Focus on things that you need rather than are nice to have. Only then will your wallet have room to walk to the market and invest for the future.
Stop Accumulating Debt - Pay It Off Your Debt For Good
Wait. Stop. Think before you act, whipping out your plastic to pay for your purchase. All of your financial goals are quickly swept out the door by that one swipe, no matter your intention.
If you want to build wealth, incurring debt is not right. Debt is an enemy to your income, eating it up in one big gulp with the added interest you’ll pay over time, as well as penalties and fees in some cases.
Here’s some homework for you. Take a few moments to review your debt (credit cards, loans, etc.) and calculate how much extra is flying out of your pocket and into someone else’s. You may be surprised. Think more like a millionaire and pull yourself out of the swamps, earning interest versus paying it to someone else.
There are numerous methods out there for paying off your debt, such as the snowball and avalanche methods, consolidation options, and more. Research the available options and seek out the best one for your financial needs.
Monitor and Maintain Your Credit Score
When’s the last time you pulled your credit report? It’s another good habit to form, running through the report annually at a minimum. Did you know that there are three credit bureaus to monitor? TransUnion, Equifax, and Experian are their names.
Credit scores are an indicator of financial health. A score is a number ranging between 300 and 850. A high credit score saves you money. How? A higher credit score tells a lender that you are not as risky as a lower score.
By not having a debt to burden you or dropping your score, lenders will likely offer more competitive interest rates when purchasing a home, a car, etc.
Have a Future Financial Plan
Actually, not only have a plan but commit to your investments. There are many different types of investments to choose from. This includes:
- High yield savings accounts
- 401k or 403(b)
- Roth IRA or Traditional IRA
- Stocks
- Mutual Funds
- Certificates of Deposit (CD)
- Exchange-Traded Funds (ETFs)
- Commodities such as gold or silver
You don’t have to choose one type of investment. It’s best to choose multiple, allocating your assets across different types of industries and diversifying your portfolio. Diversity strengthens your investment. For example, if you have stocks affected by inflation. Fear not. Gold is a great investment option to hedge against inflation.
Wherever you choose to build your wealth, remember to make regular contributions. Only then will your investment portfolio begin to flourish. Be as patient as possible, too. Wealth isn’t built overnight. Instead, it’s built over time.
The Bottom Line
Don’t let your peers drive your wealth. Looks can be deceiving. Just because a family member or friend always has the latest and greatest to show off doesn’t mean they can afford it. Don’t fall into that trap.
Instead, follow the steps outlined for financial freedom, and you’ll be well on your way to successfully building your wealth. It’s never been simpler to own gold, so don’t wait. Start adding to your wealth today.
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Sources:
How Much You Should Have Saved for Retirement by Age