Are you trying to build wealth in your 40s? Growing wealth is a sure thing with the correct strategy. Create a budget, contribute to a retirement fund, increase income, and find a mentor.
I know, I know. It is not that simple, is it? In this post, I will show you exactly what you need to do to make sure you are set for the rest of your life. The Ultimate Guide To Building Wealth In Your 40s coming right up.
1. Create a Budget
Now, we need to build a base right? If you build the top-of-line 17th Century castle on top of sand… you will not have a castle anymore, let’s just say that. That’s why we require a budget. We need to know how much money is coming in and how much money is coming out so we can always be in a financially strong position. We want those metrics because without them we have no clue about everything else. Can you afford to buy that new car? A new Rolex? A holiday with your best friend to Cancun? If building wealth in your 40s is your main goal, you need to build a budget and always be in a strong financial position.
2. Contribute To Your Retirement Fund To Guaranteed Wealth
I know what you are saying in your head right now: “But, I already put in so much money every month, I will probably not even be able to enjoy that money when I get old, I am pretty sure I will be fine when I get to retirement age so, no need for that” While I am happy about your amazing goals and I know you will get them, We need to insure you will be financially set in the future. Believe me, your future self will thank you.
The beautiful thing is that the earlier you start contributing to the retirement fund. The easiest will be to achieve an enormous ROI (Return On Investment). Let me explain. Let’s say you decided to contribute $1000 per month. With an average return of the S&P500 of 10% per year and a retirement age of 67, we are looking at a total retirement fund of $1,660,416.59. Yes, you read that right, over $1.6 Million dollars for you to retire.
Now let’s compare that to the person that did not want to build their wealth in their 40s but decided to do in their 50s, therefore, losing 10 years. That person invested $2000 in their retirement fund (yes, the double) and only manage to retire with $1,075,396.61. Don’t get me wrong that is still an insane amount of money but while investing double every month they are left with over $550,000 less money. Why? Compound interest. This is what Warren Buffet used to be where he is: long-Term Compounding.
3. Focus On Increasing Your Income On Your 40s
While budgeting and contributing to your retirement fund is super important. The more important of them all is increasing your income. While you could secure your future self with only $1000 dollars per month and an average 10% return per year. You could add $10,000 dollars per month to your retirement fund, have a worst average return of 5% (super low, like what are you doing?!) and still manage to have a retirement fund of $6,870,358.35 (over 4x then your other retirement fund!). Clearly increasing your income should be on the top of your priority. I would advise you to also read the Wealth Manager post where I show you the exact step by step of how to become a Wealth Manager!
4. Start A Side Hustle
A side hustle is a brilliant way of increasing your income. There are 1000s of options that you could do. From copywriting to moving furniture on the weekend, your options are limitless. Just find something that you like doing and start doing it. Simple as that. Even if you don’t like it, the Mere-exposure effect says that the more you do something, the more familiar you will be with that the more fun/like you will. Therefore the more you do, the more you enjoy!
5. Start Building Your Knowledge, Experience, And Problem-Solving Skills
Have you ever heard this expression? “The more you know, the more you can charge people for it”. Well I might be butchering Aristotle’s quote “The more you know, the more you realize you don’t know” but hey ho, it worked.
The more knowledge you have about anything, the more valuable you are. That’s the difference between the $100 dollars per hour lawyer to the $1,000 dollars per hour lawyer. He is not 10x better, 10x smarter, or 10x more handsome. He just worked harder to specialize in solving a specific problem that people are willing to pay $1,000 dollars per hour to solve it. Be that person that goes the extra mile and I promise you, you will be rewarded.
6. Living Below Your Means
Living below your means is something that should never change. You should never live over your means, you know why? That’s a sure way of going broke. Ask any NBA or NFL player that bought 6 Lamborghinis, 3 mansions, and went on 2 $100,000 dollars vacations per year. It does not matter if you make per month $1,000, $10,000, or even $100,000 dollars. If you spend more than you make you gonna go broke for sure. It’s just math. This is the number 1 reason people go bankrupt and this should be the number 1 thing in your list that you cannot, under any circumstances do it. Thank me later.
7. Find A Financial Mentor
Now this one is tricky, I know sometimes is hard to find a mentor around you. Maybe you don’t know anyone that is that brilliant to mentor you or even if you know someone like that they might not be willing to spend time with you. Their life might be too busy to take someone under their wing and teach them the ropes. I got good news for you. There are 100s of books and youtube creators, that are truly great in being a mentor, best of all books are $10 and youtube is free.
You could get advice from multi-millionaires and not even pay for it. Advise that if you would go to those people individually would cost you over $10,000 to get it. Creators that I personally like are Alex Hormozi, Sam Ovens, and Graham Stephan. No need to pay for any programs. Just listen to their videos and you will get top-tier financial advice.
If you focus on all the information I gave you today, I can guarantee your success. This is like math or formula so if you implement those 7 steps there is no way you will not build a foundation that could build your life to extreme success, I know for a fact that you are capable of doing it and I really hope to see you someday on the cover of Forbes Magazine.
Before You Go
I would recommend you to read the Hedge Fund Manager post, this will show you one of the best ways of earning income, hence as you know 10% return on $1 Million is better than a 100% return on $10,000. This will show you how much they make, and how they grow their income year after year! Click here.