What to Do Before 30 if You Want to Build Wealth
Your twenties are the perfect time to save and invest. Do it now, and you will have a great ally—time—on your side. Think about doing the following things if you’re not doing them already.
Put money into a retirement plan. Save and invest through a 401(k), a 403(b), a Roth or traditional Individual Retirement Account, a myRA—whatever is available to you; any taxadvantaged retirement account is better than none. If your employer doesn’t offer one, start an IRA or myRA on your own.
Consider an investment in equities. The market goes up and down, but equities offer you the potential for double-digit yearly returns. From 1951-2016, the average yearly price return of the S&P 500 was 7.4%, and roughly every fifth year saw a gain of 23.5% or more. Please remember, investing in equities involves risk, including the complete loss of principal.
Whittle away at your debts. The less money you owe each month, the more you potentially have to save or invest. You can “pay yourself first” with it, rather than paying those you owe first and yourself second.
Live below your means. Living large and buying expensive “stuff” that depreciates can leave you drowning in debt. Spending sensibly can help you grow your emergency fund, and, by extension, your net worth.
Get help from a financial advisor. This way, you can evaluate your progress and determine how far along you are toward that first million. Making the right decisions now could leave you wealthier in the future.