How to build wealth in your 30s can often be a battle between competing priorities.
Some of the costs and commitments of life have started to kick in more.
Relationships, children and significant financial commitments like houses are happening or about to.
But if you don’t start building your wealth now, when will you do it, and what will be the short and long-term implications of delaying it – not good, I imagine.
The way to build wealth in your 30’s is to start with a plan. Figure out key lifetime goals, collect your financial data, and set up automatic savings and investing. Look out for free money on your way while starting to invest in things that will grow and pay you an income now or in the future.
Read on to hear how you can start building wealth in your 30’s.
Start with a plan
Building wealth all starts with a good game plan.
If you have a game plan, you have something to aim for, which will be a lot easier to achieve than just shooting in the dark.
Your GAME plan will not only identify what you want to achieve but, just as important, why you want to achieve this.
If you have your WHAT and WHY your how will become a lot easier to work out.
With these ingredients, you will have the end in mind and who or what is pulling or pushing you in that direction and away from what you don’t want.
This will help keep you focused, motivated and heading in the right direction.
If you don’t aim, guess how many targets you will hit
Probably not many.
You might also find some use in defining what wealth means to you
- Wealth – money and material things
- Health – the ability to get out and about and do the things you love doing
- Happiness – friends, family, hobbies, interests to enjoy life with
- Time freedom – time to do all the things that bring joy to your life.
You can read here on a few life planning ideas
Oh, and by the way, life and financial planning are what we do here at Financially Happy.
Figuring out your
- Goals – what do you want to achieve and why
- Actions – what do you need to do, know, learn and or overcome
- Means – what resources do you have now, and what could you create
- Execute – make the plan happen, review and revise on the way.
Collect your data
Ok, so now you have a plan in place, you need to know what is going on.
Part of this is knowing your numbers for wealth building.
You’re going to need a baseline for where you are starting from.
This is where you need to collect a few numbers.
- Your networth – everything you own vs everything you owe. This is what you are worth and the number you hope to grow to increase your wealth.
- Your burn rate – how much money are you currently burning through? What does it cost you to live per month per year?
- Your savings rate – How much of the money that you’re earning do you get to keep? At the end of the month, how much is left over after all your expenses? This will help identify if you are living within your current means or over them.
- Your freedom number – this is the amount of money that could make work optional. The calculation is your current yearly expenditure x 25. SO if you spend £30k a year, you might need an invested pot of money of £750k -£30k x 25 = £750k.
Now you have some of the key wealth-building ingredients
You know where you are starting from, where you want to get to and how you’re doing right now.
With these numbers, you can start to look at how to
- Earn or create more
- Spend less or better
- Bridge the gap between where you are and want to be
- And options for getting to your destination quicker
Whether it’s good, bad or ugly, collect your data, and you will need this to set your new direction.
Automate your actions
Another great way to start building wealth in your 30’s is to automate as much hard work as you can.
You can now set up automatic payments, savings and investments across your accounts.
You can top up on items that you buy to the nearest £$ and save the difference, i.e. an item costs £2.75; you top this item up to £3, putting the extra 25p into savings.
All of these actions are to encourage and facilitate saving and investing automatically.
Doing this will help eliminate one of the weakest links in your wealth-building YOU.
You are your weakest link, lazy, forgetful and cheap on a good day, never mind a bad day.
You may find all sorts of excuses not to save this or that month, but with automation, it just happens.
Automate; get out of your own way.
Create a big parachute
When things go wrong, you want to have a soft landing so that something doesn’t get broken on the way down.
Creating your parachute to slow down the descent from a great fall is crucial to building wealth.
You can’t build wealth if it keeps crashing down every time something goes wrong.
If you end up using all your money or, even worse going into debt to sort out the problem, you may find yourself on a slippery slope you can’t get off from.
If when you need money in a hurry for:
- Gaps between work
- house or car repairs
- medical bills
- Last-minute travel
- Opportunities that can’t be missed (important ones, not just the pizza delivery at the door)
And you have nothing to fall back on; you are going to be taking 2 steps back for every step forward.
Build yourself an emergency fund of 3-6 months living costs or larger, whatever helps you sleep at night given your circumstances.
This emergency fund will help prevent, mitigate, or recover from the bumps in the road and slow down the descent from big falls.
Take the free money
Part of becoming wealthy is also about taking the no brainer opportunities put in front of you.
If you work for a company, one of these is likely to be the company pension.
The free money company pension – Yes, FREE MONEY.
Your company is offering you a pay rise – the only thing is its deferred income. You get to spend it later – not now.
Take as much of the free money as you can, matching whatever the company will match, and that fits in with your circumstances.
Don’t worry; you haven’t lost the money; it is there waiting for you when you reach the right age.
Know yourself – greed and fear
Another part of building wealth is improving your financial literacy.
How can you increase your wealth if you have no idea how to do it?
Read books, watch Youtube and approach people who you think have what you need.
One of the core areas of learning should be to know yourself, especially around money.
Can you be left alone with money, or will you go crazy with it?
Are you aware of your impulses and urges that may lead you to financial, physical or mental destruction?
Knowing your impulses around greed and fear will play a big part in your ability to manage, earn and keep any wealth that flows into and then out of your life.
A bit of reflection might help you make better financial decisions around
- What to invest in
- Taking on and managing debt
- How to manage your more destructive habits and behaviours.
For instance, a pension is a way to save without getting your hands on it until you reach a certain age.
Maybe this would be helpful if you thought you might spend it if it was too easy to reach.
Taking time to make decisions like waiting for 30days to make a purchase might head off some poor choices.
Removing the stimulus from your life, like alerts, emails, onscreen adverts, or your more consumer-focused friends mike help to keep you on the simple path to wealth, avoiding the rocks on the way.
Build your financial knowledge and self-knowledge to navigate your way to wealth.
As part of your financial education and wealth-building, you may want to start investing.
Investing in things that have the potential to pay dividends and grow in value.
Something that you might want to consider investing in which have the potential to compound or growth upon growth are:
- Your health
- Your wealth
- Your happiness
Investing in yourself might be through courses, qualifications, and coaching that builds on your current knowledge and skills.
This personal development might help you get a promotion, ask for more money or pivot to a new position.
Improving your skills might also help you to start your own enterprise or side hustle.
You could work full-time on your job while working part-time on your passion.
A healthy lifestyle
Investing in your health might be a priceless thing to do.
Where would you be without your health?
No amount of money would be worth it without a healthy body and mind
Eating, drinking, and sleeping well will all help lead to a healthy body, mind, and spirit to give you the energy to achieve all you want.
Staying healthy will help lead to a long and active lifestyle
Start investing in things that will grow
Investing in the world’s great companies has been a way to build wealth over the long term.
As part of your personal and financial development dipping, your toes into investing will be crucial to your wealth journey.
Here you especially need to develop your financial literacy and understand the difference between investing – building wealth over the long term and speculation – trying to make money in the short term.
Some terms you will need to learn about include
- Active vs passive investing
- Timing and time in the market
- Long-term growth vs temporary declines
- Risk vs reward vs volatility
- Greed and fear – especially your own.
Uping your investing knowledge and then the experience will help you to start building your financial resources.
By the way, this is one of the things that we do at Financially Happy – find out more here.
Navigate your way toward happiness
Understanding YOUR goals and ideal lifestyle should help you navigate the things that make you happy and away from those who don’t.
Aligning your goals with your values will lead you to a clearer path to happiness rather than just chase the latest shiny thing.
This is where investing in the things you really enjoy will pay multiple dividends
- Time with family and friends
- Hobbies and interest
- Volunteering and engaging with your community.
If your happiness is high, it might well make you very wealthy in life
Use your talents to get creative
One final thing to consider in building wealth in your 30s is using your experience and talents to create more money.
- Is there something that you like doing?
- Are you particularly good at something?
- Might people ay you for these skills?
- Does the world need them?
If you could help people move away from a problem and towards a solution, you might just be able to make an income out of it.
This could be a side income while you do your day job and or grow into a full-time business.
Creating assets, things that grow in value and pay you an income, will be a core part of how to build wealth in your 30s.
Could you create a
- Youtube videos
On the things you love doing, are good at, people will pay for and what the world needs?
If so, you might find another income source to build wealth in your 30s.
Just remember it took a while for Rome to be built, so any side hustle takes time to take off.
You will be learning and building your skills all the time – it’s a win-win-win.
How do I start building wealth in my 30s?
A summary of how to build wealth in your 30s.
|Start with a Plan
|Set clear financial goals and create a roadmap to achieve them.
|Collect Your Data
|Gather all your financial data, including income, expenses, debts, and assets.
|Automate Your Actions
|Set up automatic transfers for savings and bill payments to streamline your finances.
|Create a Big Parachute
|Build an emergency fund equivalent to 3-6 months of living expenses for financial security.
|Take the Free Money
|Take advantage of employer-matched retirement contributions and other incentives.
|Know Yourself – Greed and Fear
|Understand your risk tolerance and avoid making financial decisions based on emotions.
|Begin investing in stocks, bonds, or mutual funds to grow your wealth over time.
|Invest in yourself through education and skills development to enhance your earning potential.
|A Healthy Lifestyle
|Maintain a healthy lifestyle to reduce medical expenses and improve quality of life.
|Invest in Things That Will Grow
|Put money into assets and ventures that have the potential for appreciation and returns.
|Navigate Your Way Toward Happiness
|Focus on what makes you happy and fulfilled, not just on accumulating wealth.
|Use Your Talents to Get Creative
|Utilize your skills and talents in creative ways to generate additional income or start a business.
FAQ: Building wealth in your 30s
How to invest in your 30s?
Some good ways to invest in your 30s include.
Getting rid of expensive debt and then building an emergency fund of 3-6 months of living costs.
Joining your employer’s pension scheme – its free money
Educating yourself or finding a planner or coach to take you through the principles of good investing.
Start investing in low-cost global diversify index funds – think long term and don’t react to the market’s ups and downs.
How to grow wealth in your 30s?
Keep a close eye on your cash flow – keep as much money as possible.
Save first and spend whats left.
Invest your spare cash in assets like property, stocks, and or business.
Automate as much of your money as you can, and get out of your own way.
Keep doing this year after year.
How to manage money in your 30’s?
Save first and spend what’s left.
Automate your accounts into sending saving and investing accounts.
Join your employer’s pension scheme.
Think long-term and be kind to your current and future self.
Read at least one financial book annually to improve your financial literacy.
How to build wealth UK?
Get clear on your goals – what’s going to make your life great?
What sort of finances will that take?
Save first and spend what’s left not the other way around
Automate your saving and investing.
Track all your numbers, income, outgoings, net worth, and financial freedom numbers.
Think long-term ignoring short-term setbacks.
Summary: How to build wealth in your 30s UK
Building wealth in your 30s is a much about money as it is about not financial actions.
Wealth can mean many things to many people, but it probably includes
- Time freedom
Working on building wealth in all these areas will be key to real wealth.
Understanding your why and where you are trying to get to will ensure you are not chasing your tail or the latest shiny thing.
Collecting your data will help you understand where you are starting from and what the gap is.
Knowing what is going on right or wrong is a core part of keeping you going in the right direction.
Automate your wealth building with automatic saving and investing – take the weak link out, i.e. yourself.
Building yourself a good parachute for a soft landing when this goes wrong will help maintain your wealth and prevent taking on debt.
Take any free money on offer through workplace pensions, make sure you understand what is on offer and maximize as best you can.
Strengthen your financial literacy. Understand the difference between investing and speculating and know yourself enough to know which one you are more prone to.
Navigate your way to wealth, health and happiness. Discover over time what makes you happy and navigate towards that and away from the rocks.
All of these ideas will help you get closer to understanding how to build wealth in your 30’s.
Anyway, those are my thoughts on how to build wealth in your 30s; let me know yours in the comments below.
Thanks for dropping by.
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