Financial Goals To Achieve Before Hitting 30

When you are in your 20s, remember time is your biggest advantage.

According to Marketwatch, a study shows Gen X is financially wrecked.

According to Fidelity's 2020 Retirement Savings Assessment study, millennials (born between 1981 and 1996) ranked higher than Generation X-ers (born between 1965 and 1980) on the retirement preparedness scale, in part because they had increased their savings rate from 7.5% to 9.7% over the past two years.

However, millennials still lack behind their elder cohorts. Why is this?

• Millennials take on student loans
• Start working at a later age in life
• The cost of living has become much higher

According to Northwestern Mutual's 2021 Planning & Progress Study, which surveyed more than 2,000 American adults.

Millennials (ages 25 to 40) have an average of $51,300 in personal savings, while their retirement accounts have an average balance of $63,300. 

Gen Xers (ages 41 to 56) are slightly ahead of their younger counterparts, with an average of $67,100 in their savings and $98,900 put away for retirement. 

Baby boomers (ages 57 to 75) have an average of $102,400 in personal savings and $138,900 in their retirement accounts.

Financial goals to tackle before 30

Knowing is half the battle.

Ask yourself what do you want?

• Do you want a mansion, fast cars, and a lavish lifestyle? Or do you want a chill life with a few million in your bank account and weekdays where you get to stroll on the beach?

There is no right or wrong answer most importantly it is what you want, not what society dictates you to want.

1. Build credit score

• Bad debts: Items that you pay for months and years that do not increase in value. Eg car loans, personal loans, credit card debt.
• Good debt: Items that have the potential to increase in value over time. Eg a mortgage or a business expansion loans

Building a credit score is important as it is a metric used by lenders to decide how likely you are to pay them back. The less risky they view you the less you end up paying.

2. Knowing about the stock market

When people hear the word stocks, they think of charts, people in fancy suits working on a walking street, etc, discussing finance in words that they could never understand.

However, in reality, understanding, the stock market has never been easier in this day and age through the internet and online brokerage account.

As a young person, it is crucial to have a basic understanding of the stock market if you wish to be financially independent.

3. Investing in yourself

This is learning new things right now

Think about it, if there is anything that you are interested in, " do it now". When you are young, you have the energy and mental bandwidth for it.

If you make a mistake that's alright, at least you gave it a shot and hopefully even discovered what you're passionate about. This is possibly the best investment you can make for yourself.

Eg paying to go to a seminar could provide huge returns as you utilise the knowledge gained. Or even buying a $10 book on public speaking can take you a long way. Think of books as a way of getting a front-row seat as the author narrates his experience throughout his 40 years.

It doesn't need to be a book, it could be watching educational videos on Youtube, documentaries or even shows that broaden your exposure to life.

4. Build up your nest egg

Your 20s are so important because it's the foundation that will set the tone for how you get to spend your life and how you get to enjoy your retirement.

No one wants to approach retirement knowing that they have nothing saved up for their future, so it's important to start saving and investing at an early age.

Fidelity's number is based on the assumption that a person saves 15% of their income annually beginning at age 25 (which includes any employer match), invests more than 50% on average of their savings in stocks over their lifetime, retires at age 67, and plans to maintain their pre-retirement lifestyle in retirement.

This is just a benchmark to work towards, in reality, everyone's financial situation is different and life events may happen but it is always good to have a guide that you can use as a reference for your planning.

5. Creating additional streams of income before you are 30 

According to a study by Tom Corley author of "Rich Habits".

• 65% of the self-made millionaires in my study had three streams of income, 
• 45% had four streams of income, 
• 29% had five streams of income. Each additional stream they added gave them wealth that they could then leverage and invest into another.

Relying on a single source of income is riskier than you think because if anything happens to that stream of income you be left flat out with no inflow of income. 

Having multiple streams of income through your side hustles, freelancing, and investment could provide you with continuous income flow should any one of your income stream stops.

Conclusion

If you strive to build these goals in your life before hitting 30 years old you will likely be years ahead that your peers that did not have this self-awareness of themselves.

Don't let your life be defined by what you didn't know or didn't do. Take on the driver's seat in your 20's so that you would have the confidence as your steer into your 30s and beyond.

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