40 year olds, what financial advice would you have for a 30 year old?
50 and older, I'm sorry, but in my personal experience, your advice has been a little out of date.
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If you ever come into some money, whether it be a raise, bonus, or gift, don't let it sit in your checking account. Move it to somewhere that is able to earn money.
Don't listen to anyone born before 1980. They don't live in the same world as you.
Just save your money as much as you can, dont suffer but live in the studio until you're ready to buy a house. The car and the two bedroom and all that shit just keeps you perpetually a decade away from buying a home.
That's funny because I live in a shared house which has 8 bedrooms but only 1 kitchen. Even if I worked 40 hours a week I couldn't afford a studio in my city. New Zealand rentals are unaffordable, here I'd need to have a professional job and be married just to rent a 1 bedroom apartment with almost no space.
im in the US but yeah i moved halfway across the country to go to a lower cost of living because I just couldn't make it work in a HCOL area like you're describing. I mean, im just way happier now but i understand that NZ is a smallish country where you can't just find a lower cost of living area further away.
True. I've looked for rentals further south of me but it's the end of the world at the bottom of New Zealand. Every time a "cheaper area" pops up in the news, everybody from Auckland floods the new "cheaper area" and it ends up like everywhere else after 1-2 years (more pressure on house prices).
Learn to cook & meal-prep. Invest time into your health and fitness. Self-host as many techy services as you can (bonus points for Arr stack - streaming services are expensive). Try to "BIFL" where possible - Terry Pratchett said it best:
There is no hope without a revolution.
But also whenever you get a raise or pay off a loan take the majority of that money you would have added to your regular paycheck and put it in your superannuation (or your country's equivalent retirement fund) as an automatic deduction. That way you're saving without feeling the pinch of giving something up.
Also once you reach an age you start dealing with funerals you'll realise how nightmarish and expensive that whole process is, so get a proper legal will made up.
Don't worry about money, worry about your health. Form the habits now, and stick with them.
Everyone will tell you that, and you'll just ignore them, we all know it. But, we feel like we should say it anyway.
It's really fucking important. Far more important than money.
Without money health suffers. It's a balance.
This is good advice, but do kinda worry about the money. Just don't obsess about the money. Save what you can without sacrificing too much. Tomorrow is never guaranteed. Talk to a financial advisor that you trust ideally one that answers the question "are you a fiduciary" with a straight up "yes" anything else they aren't one and fuck em. Work out a plan and find what's realistic to accomplish, and how to get there. Start that today. Not tomorrow. Investments and savings work on time not just your deposits, and every 5 years you wait you double your contributions to stay at the same level of 5 years before. Be it $50 a week or $500k a year there's no such thing as too little if that's what you got. Also max whatever your explorer match is on the 401k. It's free money basically. There is so much more but the truth is none of us are likely qualified to answer this your your situation or even in general.
But yes have fun. Live for the moment. Take time off. Spend time with your family and friends. No one will remember you for your dedication to the grind, but perhaps they would be filled with resentment.
Your teeth and feet are hopefully with you for life. Take care of them.
Look, I brush and floss on a routine and haven't had a cavity since I was a kid.
But what am I supposed to be doing with my feet? I get that my teeth can rot out, but I have never worried about feet falling off...
Brush and floss... is that not common knowledge?
quality footwear and custom orthotics.
Consider quality shoes a necessity, not a luxury.
Its not falling off so much as eventually wishing they would.we are on our feet every day yet we often don't lace up our shoes or boots.ill fitting shoes cause all kinds of problems for future self in thefeet and joints. Workboots every day can be a nightmare as can High heels for toes, ankles and the balls of the feet. Mostly good shoes are the answer but people like pretty things and not lacing up thier boots. When you get old and your feet hurt every day maybe you wonder why. Maybe it was those old converse with the hole in the toe.
Cheap used EVs are great, but if you are still in college, you don’t need that much range, so a beater leaf is even cheaper.
Your refusal to go into credit card debt in your 20s was great. Continue not fucking doing that.
Denying every indulgence makes you explode in spending desperation once you eventually get a windfall. Instead, ration indulgences, don’t forbid them. Get familiar with “this was expensive. I shouldn’t do that often.” It will make resisting temptation much easier with the new shiney XL+909T comes out when you’re older.
Don't smoke, don't drink, learn composting, grow a garden and learn foraging.
Fuuuuck, I do both, though I've been... Trying... With the smoking. I have been working on my tomatoes though!
You can grow your own tobacco. Once you do, never buy someone else's (big tobaccos) crops.
It's cheaper, you'll probably smoke a lot less of it (you have to make each harvest last until the next crop is ready!), and you'll have more fun with it when you do (pipe or rolling your own smokes, bragging rights, etc).
There are northern strains of tobacco that grow in scandanavia even, for the non aussies.
Best to quit tobacco and just enjoy the weed. If you can not get caught.
As much as i hate smoke, i would respect that
I like it that you're keeping it in the nightshade family, shit add some eggplant and you got the trifecta!
Tomatoes are great, especially if you make passata and use your garden waste for canning/pasteurise fuel.
Lose fat and build muscle. You will be more financially stable when you’re healthy.
Don't assume the future will be better than the past
Nobody under 40 thinks the future will be better
... You know, this is kinda true. I can't think of a single young person who looks at the future (writ large) with hope rather than dread, or at least YOLO-ish apathy. The difference between people is in degree, and if they think it will eventually get better again.
Even most old people know the outlook is kinda fucked.
money (you need enough) so keep dollar cost averaging into ETF, don't forget the world is a big place, so international as well and consider the debasement trade.
Switch to income investing when you "retire", don't try and time markets.
https://www.youtube.com/channel/UCuNKV0CMgcVUiJNdA-JNlJA
https://www.youtube.com/channel/UCxU4PhPfJEBgaeYT1rMhvCg
and physical health ; no smoking, no drinking, moderate cardio (running cycling etc) and lift weights to help prevent muscle loss and osteo.
and mental health: hike, enjoy the woods, spend time with friends and family you care for
Am 61, retired at 40 , gf is 57.
sounds like legitimate financial advice
Get out of the U.S.
And go where? Do you realize how hard it is to immigrate? Even if you're successful, find a cowpany who will sponsor a visa, everywhere I look seems to be taking sharp right turns. AfD in Germany, crazy grandchildren of literal Nazi collaborators in France, the grand daughter of Mussolini is prime minister of Italy. UK is doing whatever the hell it is that they do.
I’d still rather be in Canada or the EU.
And I totally realize how hard it is. I’m fucking stuck here. The U.S. has turned into a gigantic prison. It’s just my advice m. If I could expatriate I would. But realistically I’m just going to stay here and vote and then the maga Nazis will probably kill me at some point when they start their own final solution. I’m just sayin’.
I'm not really up to date on Canadian affairs, but I would absolutely not be surprised if they have anti-american sentiment and actively try to discourage or prevent people from immigrating to canada, specifically US citizens.
I’m pretty sure they are and from what I’ve seen the polls say they are not happy with us. Go figure.
401k now.
The stock market is insanely overpriced and due for a downturn. Maybe the US government will bail them all out again, but already 40 trillion in the hole, probably close to 50 by 2028 even without a crisis, and the indigestion in the bond markets right now, would give me pause in dumping cash into the market now.
It's also helping to prop up the worst companies in the world. And managers of the funds take a big cut despite not doing better than random choices, or a monkey throwing shit against a list of stocks to choose. Seriously.
You don't have to invest in the stock market to invest in a 401k. There are funds dedicated to bonds and you can pick the funds with low overhead ratios. You can even pick treasuries if you really want to.
It is better than shoving it under the mattress.
Yeah, but timing the market is always iffy. For all you know the bubble will burst so far out that it's still better to buy today.
Plus, you can invest in other countries. I myself hold some of an everything-except-the-US ETF.
I think I maybe signed up for it when I was 23? I'll have to look into it again
https://www.moneycontrol.com/news/trends/old-fidelity-study-goes-viral-reveals-why-dead-investors-perform-best-13631692.html
Check that your fund allocation is appropriate (e.g. a target-date fund or otherwise 80%+ stocks). It would be an absolute disaster if your money has just been sitting in the cash sweep account this whole time.
Also, up your contribution percentage to max it out.
I was a dumbass and withdrew my first one when I changed jobs around age 26. That job had profit sharing too. Such a waste.
"Don't believe sermons, fairy tales, or stories about money."
Get in the habit of wearing a backbrace. When you move something heavy, when you work in the yard, whenever you need to bend or twist a lot. Backbrace.
Good boots, gloves, kneelers etc. Good quality tools. Your tools (your body especially) are an investment. Buy quality. Buy to last. Take good care of them.
Save your back. Don’t bend over to pick stuff up off the floor unless there are at least 2-3 things down there to get.
Marry someone rich.
Get lucky
Don't have health problems
Don't have children (even if you find someone rich)
Win the lottery (backup for if you can't marry someone rich)
Get out of the usa
Don't eat anything approved for eating in the usa
Exercise
Damn gonna have to give up Bananas
Just do all the crazy shit. You live only once and soon your back will ache every day.
No matter what the situation, you're not financially behind yet, but if nothing changes in 10 years, you will be.
Save and invest. If you don't have at least $200k net worth by the time you're 40, you're probably never going to retire.
Daily intermittent fasting is a great way to save on your food and toilet paper expenditure.
Spoken like a true capitalist \s
lol don't ask us. we're just as fucked as you. :\
If you can afford a house, try as hard as you can not to buy a house that you can barely afford with a 30yr mortgage. Limit yourself to a house where you can afford it with a 15yr mortgage. I did that in my 30s and now in my 40s I don't have a mortgage anymore. Obviously with the current housing market this advice won't help many.
To those people, I'd say: stop using a basic savings account. Get a High Yield Savings Account. They pay 3.5-4% interest at the moment. Zero risk, and you can even havd a card attached to it for spending. They're liquid. Got 1k sitting in savings? That's $35/yr free money you're missing out on. 10k? $350/yr. Best part? When inflation starts going crazy and the fed increases interest rates to control it, your money starts making even more money. Not enough to fix everything, but it does help a little.
If you can, max out your 401k. Put money in a Roth IRA too.
If you want to play with stocks safely use index funds. Something like SPY for the S&P500. 98% of day traders lose money. Every trade someone makes is measured against the market. The trade you made increased 2% in the last week? Well, the market was up 2.8%. It's like gambling and the market is the house. The market eventually always wins and everyone else loses.
I got a 30 year mortgage at a fixed 2.something % 15 years ago and am very happy with that because I could invest more in stocks with a higher rate of return.
'Course, with the current interest rates that won't help many either...
Only one problem with the S&P500: a massive chunk of it is AI speculation, like 30%+, and that bubble will pop. Recommend bonds or metals until it does. Then switch back.
Diversified stock without AI exposure is an option. Bonds give less return and also are looking a bit funny these days, while metals give literally zero.
Everything in the market is exposed to varying degrees, unless you have something particular in mind? If you can think of a stock that will go up when AI goes into freefall, name it, please.
G4S, Dollar Tree or a payday lender like Curo Holdings should go up in any major downturn. Specifically if/when AI craps out, some of the big losers in white-collar services would rebound, although I don't know enough to really give details on that. Lots, like Nestle or Goodyear, aren't countercyclical but will be fairly unaffected, because they aren't in tech and sell something people can't really do without.
Yes, everything in the market is exposed to volatility. In which direction can vary, though. If you have a crystal ball and know the bubble is imploding this quarter, you could also buy bearish options on things like Nvidia. (There's no off-the-shelf options that go out many years, I checked)
Drinking water and mountain home meals. I'm afraid their value will skyrocket sooner than later.
HSA > 401k > Roth or backdoor your Ira. High yield savings changes every time you can get an extra half point of interest.
Do not, I repeat do not touch your fucking hsa unless you absolutely must and are dead dying on the ground. Take out a small loan before you touch your hsa. A little interest will be cheap as fuck compared to a years loss of hsa funds.
Look at how much fees cost. They are sneaky. Vanguard is the standard with low cost target date and index funds.
do not fuck with day trading unless you feel like gambling
WTF is an HSA or 401k? We're not all US Americans...
They're both tax advantaged accounts - meaning you don't have to pay taxes on them in most situations.
HSA is supposed to be a Health Savings Account, but has turned into more of a retirement account. 401k is Americas sad replacement for pensions as workers need to contribute to it and so it largely only helps wealthier people.
The more general advice would be - make sure to save and invest money (preferably in ways that avoid taxes if possible).
Can you explain what you mean about the HSA being more of a retirement account? Can't you only use that money on medical or health related purchases? I understand the possible tax savings through an HSA, but I don't see how it could be a retirement account.
After you turn 65 there is no penalty for using your HSA for non-medical purchases, you just have to pay income tax on withdrawls. This effectively turns an HSA into an IRA after you turn 65. So you can contribute pre-tax, it grows tax-free, then you can withdraw without any penalty - making it effectively just another retirement account.
https://ourtaxpartner.com/hsa-distribution-rules-after-age-65-medicare-premiums/
Thanks a lot for the explanations!!! 🤩
Yup.
The Canadian equivalent is a TFSA, unless you max it out (congrats), then RRSP. Apparently there's niche cases where RRSP is better, so look into it a bit.
RRSP contributions are income tax deductible, and up to $60k from the account can be used toward a down payment for a home. For someone trying to buy, its a good idea to focus on that RRSP first.
Oh, and there's also the FHSA, on that note.
Yup, and it's good if you start using it early. I'm not a fan of the restrictions on it though, compared to the RRSP. But they are strong when used together.
They are. Bravo on that awareness you felt the need to try and point out.
The title didn't say "40 year olds in the US" now did it? Am I required to research every poster's history? Jeez.
Is every responder supposed to research how investing and retirement works in every country on the planet and answer in kind? If you don't have these programs where you live then just keep scrolling or submit your own response.
No, man, I just wanted an explanation. And I got one from another kind soul.
Why even make that comment, it adds nothing to the discussion IMHO.
It seems disingenuous to claim that you were "looking for an explanation" when you very clearly knew they were a US thing. It seemed more like you're complaining because someone gave a response that's only applicable to people in the US.
True, maybe a mix of both. I heard 401k in some TV show and knew it was an American thing but if someone said TFSA or RRSP without mentioning it was Canadian I'd have said the same thing. Canadians know there's a world outside Canada though and would've specified so in the opening post.
I think the confusion about your reply is that it reads like you're assuming the person giving advice was being ego-centric or thinking everyone lives in the US or something, when in reality they were just answering the question. Nothing malicious. Spreading their own wisdom.
Are you required to open your virtual mouth anytime something isn’t directed at you? Are you op? Did I answer your question? If you hadn’t opened your virtual mouth would you be here having me shit talk you like a toddler?
How about you consider what actions you took to end up here.
I'm sorry you seem to have a bad day, hope you'll have a better one tomorrow. I won't be fazed by a stranger trying to berate me 😄
Hi, I'm OP, stop getting into arguments in my thread, thanks.
Although, if you have to gamble, fuck with day trading before slots or poker or whatever. Way better odds.
30-50 are most people's highest sarnings years, so if you aren't happy with your career, nows the time to fix it and get on a better path. Career changes get more difficult at 40 and 50.
Save even more than you think you can afford.
If you have IRA offered by your employer as a work benefit, try to contribute the amount that maxes out the employers contribution. This amount will vary by plan structure and also IRS limits. But basically you want to max out the amount your employer compensates you and even moreso for savings that compounds over time.
Consolidate and eliminate consumer debts.
If you need a car, buy used and let the first buyer take the depreciation hit.
Buy a house if you can afford to insure and fix everything that goes wrong with it also. Furnaces and AC and roofs are expensive.
If you plan to have a kid, start a 529 for their education now. Even if the contributions are small, time and compound interest is your ally here.
Don't get on TikTok or Instagram as it becomes an envy/peer pressure/consumption trap. I don't have the Amazon app on my phone either. I have to manually log in at a PC if I really need something from them. This reduces impulse purchases. Limit the Ubereats and Doordash expenditures also.
Set aside some time to understand how your pension and the tax system works.
It's dull as hell, but you will need it.
At least contribute to your 401k to get the full match from your employer if offered. More if you can afford it. Time in the market is huge. Make a budget, have emergency savings. There’s little point in investing if an emergency happens and you have to withdraw your retirement at a potential loss, and that’s before penalties and tax. Take care of your body, especially joints. Be even a little bit active regularly. Figure out a decently healthy diet. These will help prevent health issues which can be expensive. Plus you might look better and feel better too.
All of this sound like too much? Pick one or two and try doing them consistently even if it’s half assed. Half assing something consistently for a long time is much, much better than putting in a ton of effort, burning out, and returning to old patterns. It’s a marathon, not a sprint.
Sorry I know that kinda veered into fitness but I see a lot of parallels in personal finance and fitness/nutrition. Both involve budgets and benefit from a plan and spreadsheets.
I’m over 50 so apparently I don’t count. But if I did I would say maximize salary. Live below your means. Invest because compound interest is your biggest ally.
Lots of good tips in here already.
I would recommend checking out The Money Guys or Caleb Hammer on YouTube for some great tips with actionable goals.
Don't. Just don't. Ever.