What to do with your money in your 30s

Fsp Invest, 10 Oct. 2013

Tags: financial planning, money, 30s, what to do with your money, asset allocation, retirement, financial future

For many people, leaving their 20s isn’t necessarily a bad thing. It means setting aside the days of crazy parties and glaringly stupid decisions. By the time most of us kiss our second decade goodbye, we’re in steady jobs. That kind of stability mixed with the lasting strength and good health from our rip-roaring 20s might seem like the ultimate sweet spot. But there’s a downside to that kind of contentment if you’re not careful. Read on to find out what to do with your money in your 30s…

When the present is going relatively well, it can become difficult to focus on the future, Jeannette Di Louie in Investment U explains...

And that lack of foresight can bite you hard later on, especially when it comes to finances.

Your 30s - or your 40s or 50s, for that matter - are not a time to kick back and relax too heavily. Instead, they’re the perfect opportunity to prepare for life-changing events, particularly retirement.

As Fox Business noted earlier this year, “retirement may seem far down the road at 30, but the longer workers wait the more they’ll have to put aside later.”

And Kevin Luss, president of financial advisory company The Luss Group, added, “If you start at age 30 you have to put 10% of your income away as a benchmark. If you start at 45 you have to put 50% of your salary” toward retirement.

That’s a major difference and a much bigger burden further down the line.

Don’t leave it too late to start thinking about your financial future

Regardless of when exactly you begin saving up for your long-term future you need to take advantage of what opportunities you have…

However, it’s not good enough to merely throw a portion of your salary at a retirement fund and hope for the best.

That’s why proper asset allocation is key. Spreading out investments between a variety of markets and vehicles. For example, you could spread you cash the following ways:
  • 60% into shares.
  • 20% into bonds.
  • 10% into cash and cash equivalents.
  • 10% toward alternative investments.
  • 5% in precious metals.
  • 5% into property and property equivalents.
And yes, putting money toward your retirement will probably mean you have less to spend elsewhere.

But once you’re in your 60s, you’ll be very grateful for the decisions your 30-something-year-old self made back in the day.

So there you have it, what to do with your money in your 30s.

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