Change your life by
managing your money better.
Subscribe to our free weekly newsletter by entering your email address below.
Subscribe to our free weekly newsletter by entering your email address below.
Wealth isn’t just a number – it’s a mindset. We walk through each decade of your financial life, from the early behaviors that set you up for success in your 20s to the mindset shifts and milestones of your 30s, 40s, and 50s. Discover what real wealth looks like today, how to avoid lifestyle creep, when to pay off debt, and how to move from simply making money to truly owning your time.
Subscribe on these platforms or wherever you listen to podcasts! Turn on notifications to keep up with our new content, including:
Bo: Brian, I am so excited about this because we know that everyone’s financial journey looks a little bit different. And depending on where you are in your journey and your goals, your targets, and your milestones, they might all look a little bit different, too. So today, we’re going to look at each decade of your financial life and go over what you should focus on, the checkpoints to keep you on track, and the financial markers you can use to make sure you’re right on track.
Brian: So, let’s talk about how to be wealthy in your 20s because this is the very beginning of the journey. You are coming out of the starting blocks and in this age at this phase it’s really about getting the behavior right. If I could get you excited about any decade this is the opportunity when you’re a billionaire of time to leverage and maximize every opportunity you can because it’s kind of hard to screw it up if you do this right.
Bo: When we think about what wealthy looks like in the 20s there is a wonderful quote by Benjamin Franklin I think that lays this out really well. Benjamin Franklin said, “Many a man thinks he is buying pleasure when he’s really selling himself to it.” Brian, how many folks early on in their journey have we seen fall into this exact trap?
Brian: Well, I mean, we go through a lot most of us our first 20 years, we feel like we’re under the thumb of somebody else, whether it’s your parents or something. And so when you get out on your first time on your own, you want to unleash, you want to reward, you want to pay yourself back for all that discipline or whatever you perceive that you’ve been under. Guys, I want you to know this quote when I read it, many a man thinks he is buying pleasure. How many of us, whether it’s going and buying the new car right after we get out, get running up a consumer credit card debt because they were offering those all through college only to find out later when you get a little more an ounce of wisdom that you have now locked yourself. You’ve sold yourself, your labor, your time, all because of these things that mean absolutely nothing to you.
Bo: So true wealth in your 20s, it looks like living within your means. People that are actually wealthy, they recognize that using debt or borrowing money to buy items or experiences isn’t actually freedom. It’s entrapment. And don’t misunderstand. We have nothing wrong with you buying things that you can afford or having experiences that you can afford. But it’s about doing the ones that you can afford. It’s about living below your means, not at your means or even beyond your means.
Bo: Another thing that being wealthy in your 20s looks like is it looks like getting out of debt or at least getting out of most of your debt. Because we understand that there are a lot of debts. Maybe student loans from your education or maybe when you got your first car, you had to take on an auto loan. Some of those are necessities, but there are other types of debts, the credit card debts, the consumer debts, the store debts, those types of debts. In your 20s, if you want to be truly wealthy, you have to get those off of your balance sheet.
Brian: Well, debt is an illusion to you because it looks like it’s solving all of your problems that you have in your 20s is that it helps you pay for things when you’re not making a lot of money. But guys, I’m here to tell you if you don’t get the behavior right, the discipline, it will be a bridge to nowhere. You are borrowing from your future self. So that’s why when we talk about 20/3/8 with cars, when we talk about all the the avoiding credit card debt if you can’t pay it off monthly, we’re trying to teach you that credit card and all that highinterest debt is chainsaw dangerous.
Bo: And one of the things, this is a great thing that Warren Buffett said. He says, “The best way to build wealth is to invest in yourself.” So when we think about folks in their 20s that are actually wealthy, that are actually doing the right things, they’re recognizing that one of the best things they can do is improve themselves, improve their skill set, improve their knowledge, improve the way that they make decisions.
Brian: Well, it’s back to the once again the superpower of your 20s is you are a billionaire of time. Imagine if you take the power of compounding growth, but you can boost what you earn your, you know, your disposable income available to you by $100 a month, $1,000 a month. These things, the exponential difference this will make in your life. So, that’s why if you can focus on, you know, what degree do you get? You know, is there extra certifications you can do? Is there some type of networking that’s going to help you either sell more products or either get to know the right people that will put you in the right places?
Bo: And as you are investing in yourself, one of the things it allows you to begin to do is it allows you begin to have a plan in place. It’s so amazing, Brian. We talked to people in their mid to late 20s and we’re like, “Hey, what’s your plan?” Oh, I don’t I don’t have a plan. I’m just kind of flying by the seat of my pants. I’m just trying to make the ends meet. If you really want to be wealthy in your 20s, you want to have a plan.
Brian: No, I like you just mentioned have a career. I also like the idea of yes, you start disciplining. You live on less than you make. It’s one thing to build up your cash to where you you cover your highest deductible, you cover your emergency reserves, but also put that money to work. Your army of dollar bills is that much more powerful if you go look at our wealth multipliers in your 20s.
Bo: Steve Berkholder says that if you’re saving you’re succeeding. If you are living on less than you make, if you’re putting some money aside for the future, you’re doing the thing that you ought to be doing. And we already said this in your 20s. Saving does not have to be difficult. It only takes a little bit.
Bo: All right. So, what does wealthy look like in your 20s? Well, wealthy looks like if by the end of your 20s, you can say these affirmative statements. I’ve got no consumer debt. Check. I’ve got a fully funded emergency reserve, which means I’m past step four of the financial order of operations. Check. And I’ve begun building and investing so that my total liquid portfolio is at least equal to one times my annual gross income. If you can say that by the end of your 20s, you are setting yourself up for a beautiful next decade in your 30s.
Bo: All right. So, let’s talk about Brian. Now, the 30s, how to be wealthy in the 30s. For most folks, this is where the messy middle begins to grab you. You have a thousand different obligations pulling you in a thousand different directions. There are a thousand different ways that you can use your money and there are a thousand different things competing for your priorities. So that’s why in the 30s, in the 20s you had to learn behavior. In the 30s you have to master behavior.
Bo: Warren Buffett said it best. He said, “If you don’t find a way, specifically in your 30s, specifically in the messy middle, to make money while you sleep, then you’re going to work until you die.”
Brian: And this is the thing. When we were talking about the 20s earlier, I was like, “It’s hard to screw this up because you’re a billionaire of time.” But here’s the good news. Most people, unfortunately, don’t hear that. They don’t get motivated in their 20s or they’re just limited on resources. So, it never happens. But it happens for most Americans in their late 30s. I’m here to tell you, if you can discover this in your early 30s, guys, you still have a tremendous wealth multiplier. We’re talking about for a 30-year-old, every dollar that comes into your army of dollar bills has a 23 times multiple opportunity.
Bo: Okay. So, when we think about in the 30s, what wealthy looks like, well, it actually looks like actually investing. In your 20s, we said it was aspirational. You just got to start somewhere. Start with that 5% of your take-home pay. Start with $100 a month. Start doing something. But by the time you get to your 30s, it’s a little more prescriptive. In your 30s, we want you actually saving and investing 25% of your gross income.
Bo: And Charlie Munger says that the big money is not in the buying and the selling. It’s not in the trading. But when it comes to building wealth as an investor, the big money is actually in the waiting.
Brian: I would add, if I could give Charlie one little asterisk, I’d say consistent and being consistent. Because guys, think about this. This is the part where so many of you will get inspired to watch our content and you might fund your Roth one year and that Roth, if you especially if you use one of our wealth multipliers, it’s going to grow into something spectacular. But if you can just keep waiting, not letting the market emotions, whether the market’s getting beat up or whether you know there’s volatility or there’s crazy political stuff going on or geopolitical things, you’re going to be cool as a cucumber.
Bo: Let’s say that you have an income of $50,000 a year. And you’re in your 30s. We’ve already said, “Hey, when you’re in your 30s, you need to be saving 25% of your gross income.” So, if I have a 25% savings rate, that means that I’m going to be saving $12,500 every year. Well, do you recognize that in your 30s, if you can just build up your portfolio value slowly and consistently over time to where once it is worth $156,000, if you can just earn an 8% rate of return in any given year, that $156,000 will have grown by $12,500. You’ve literally built a pot of money, built an army of dollar bills that can add more to it on an annual basis than your savings. Your money is actually saving harder than you do.
Bo: And that’s why there’s a great quote from Morgan Housel. He says, “When most people say they want to be a millionaire, what they might actually mean is that I would like to spend a million dollars.” And unfortunately, that is literally the exact opposite of being a millionaire. Spending a million dollars and having a million dollars are polar opposites.
Brian: I do think it’s so interesting. I love Morgan’s quote there is because I know in my own journey. There was something razzle-dazzle or blingier about your 20s. You’re looking at watch brands. You’re looking at people’s cars. But there is something as you actually start discovering and building your own wealth. Your desires and the way you look at stuff is different. I’m just telling you, if you trust me on this, it’s better to be rich than to look rich.
Bo: So, let’s kind of go through this checklist just like we did earlier. In your 30s. By the end of your 30s, we want you to have a savings rate, a savings and investment rate of 25% of your gross income. We want you to be thinking about using cash for large purchases. You don’t have to use debt anymore. And then I hope as you close out your 30s that you’ll have a portfolio of investable assets. You can include your 401k, your Roth IRAs, all your after tax accounts that’s three times your annual income.
Brian: All right, Brian, let’s talk about now, okay, what does it look like or how does one be wealthy in their 40s? So, we talked about 20s was mastering behavior and then we said that 30s was sort of this mindset shift. Well, 40s is often this fork in the road moment. You’re either catching up and figuring out where you’re behind or this is the part where you get to take your foot off the gas, but you’re beginning to recognize in the 30s was a mindset shift around money. Well, in your 40s, there’s a mindset shift around life.
Brian: You recognize that people often define being rich as having money, but those that are truly wealthy, and this is according to Margaret Bonano, being wealthy is actually about having time.
Brian: You know, you’re talking to somebody who’s in their 50s now, and I got to tell you, made it through this decade. This is the thing coming out the other side of it. I’m telling you guys, in your 40s, you’re going to become so sentimental and you’re going to realize that that Margaret was on to something.
Bo: A lot of folks in your 40s, this is a form of time where now you’re even begin to interact with your loved ones in such a way where there are implications to the way that you communicate and the way you model money and finances and decision-making to your children. It was Bruce Lee that said, “Instead of buying your children all the things you never had, you should teach them all the things that you were never taught.”
Brian: I always think about, you know, we’ve done the that we’ve seen the data in our investor, you know, of our millionaire survey. We’ve seen it in the millionaire next door and others where 75 to 80% of millionaires are typically first generation. Guys, for that stat to even exist, that means that wealth gets crushed in second and third generation. Instead of you like like Bruce Lee had been to the top of the mountain and figured out once he was starting to make money was, man, I need to probably so I don’t fall into my kids don’t fall in the trap of consumption and all the things that the typical American falls in. How do I pay this forward? So, educate your children.
Bo: All right. So, by the end of your 40s, what should you be able to say? Well, by the end of your 40s, perhaps you can check the box. Say, hey, you know what? Early retirement is on the table for me. I’m not someone who has to work all the way until age 65. Maybe I have a path and a plan in place where I could leave the workforce early if I choose. Or perhaps at this stage, my 40s, I’m able to start thinking about some of those abundance goals. Maybe it’s saving for my kids’ college. Maybe it’s buying that second property.
Bo: And I can check on some mile markers. My mile marker by the end of the 40s should be about 6.4 times my annual income. Or if I want to take this even a step further and I want to cross into the wealthy threshold, I might want my total portfolio value, my liquid net worth to be 12 times my annual income to substantiate early retirement, maybe around age 55.
Brian: All right, Brian, let’s shift gears now. Let’s talk about how to be wealthy in the 50s because in your 50s you know we talk about in the 30s life begins coming at you fast. Well in your 50s the next phase begins coming at you fast and retirement is upcoming and empty nesting is upcoming and there’s a lot of stuff that’s changing.
Brian: I mean in your 20s and 30s I think you are in warrior mode. You’re trying to conquer the world. It’s in your 40s you get somewhat sentimental. You start realizing, hey, maybe there’s more to life than just conquering and building only. And then it’s in your 50s. I’m just here to tell you mortality definitely enters the equation where you start realizing, oh my gosh, a lot of time has gone by.
Brian: But it does lead to this this this great German proverb that says when wealth is lost, nothing is lost. But when health is lost, everything is lost. And guys, that’s why you probably noticed, I see in the comments, people noticed that I’ve lost weight and other things is that y’all know I’ve lost my father when he was 55 years old. I’m soon I’m in my early 50s right now. I’m having a blast and I want to make sure that I’m able to make as many memories as possible.
Bo: But another thing that we recognize and again it’s not so much this idea of sentimentality like it was in your 40s but it’s more this reality that when you think about money Henry Ford said money doesn’t change men it doesn’t change who you are it merely unmasks you it begins to reveal the true things about you and we talk all the time that when it comes to wealth building the sort of these three distinct phases we like the make wealth phase where you’re in the early stages beginning to build it and then you move into kind of the maintain phase where you want to make sure that you are maintaining your wealth. But there is a third stage that we hope most people aspire to and that’s where you get to that stage where you actually get to begin multiplying your wealth.
Brian: This this is the stage where look I I look at wealth as an amplifier. And when we talk about multiply your wealth, we want you to be generous. We want you to be focusing on what’s legacy, what are your passions. You know, make sure you’re not skipping out on on estate planning, but also making sure that you’re very generous, not only with your time, but also with your resources, because that stuff matters.
Bo: So, what does it look like by the end of your 50s, if you’re doing this right, you’ve likely got a paid off home or you at least have the ability to pay off all of your debt. You’ve begun thinking through the multiply wealth behaviors, how you’re going to use your dollars to not just affect your life, but also the lives of others around you. And you’ve recognized some fun portfolio markers. If you’re just sort of thinking about a standard regular retirement, you’d likely want to have a liquid portfolio value equal to about 13.7 times your annual income. Or if you’re thinking about leaving the workforce at the end of your 50s, you might want to target a portfolio value somewhere around 22.9 times your annual income.
Brian: I I think anybody who’s watching this content like, man, this is interesting, especially if you’re brand new to us because you’re like, what a crazy intersection. These guys were obviously pretty nerdy with the math. They just gave me a a multiple down to a decimal point. So that that’s kind of a nerdy endeavor to be willing to do that. But then I kept hearing throughout this a lot of sentimental as well as stuff that was beyond the numbers. Guys, that’s on purpose.
Brian: And you know, I know you’re probably on this journey with us. Not only are you thinking about the finances of it and the numbers and how you’re going to make things work in your own personal finance plan, but you’re also thinking about, hey, what am I not doing or what do I not know? You don’t have to do this alone. We just like we were creative with how we’ve done this entire presentation to you to have both the numbers as well as the behaviors. We do that for our clients as well. And that’s why if you’ve come and you’ve taken advantage of all of our free resources for the decades we’ve been creating content by going to moneyguy.com/resources. If you’ve now bear the fruit the dividends and you’ve built this multiple seven-figure portfolio or soon-to-be multiple seven-figure portfolio consider going to moneyguy.com and look at the become a client because that is the abundance cycle fulfilled.
Brian: I’m your host, Brian Preston. Mr. Bo Hansen, Money Guy team out.
How about more sense and more money?
Check for blindspots and shift into the financial fast-lane. Join a community of like minded Financial Mutants as we accelerate our wealth building process and have fun while doing it.
It's like finding some change in the couch cushions.
Watch or listen every week to learn and apply financial strategies to grow your wealth and live your best life.
Subscribe to our free weekly newsletter by entering your email address below.
