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Where Should You Be Financially At 30?

2 August 2010 16 Comments

I think many 20-somethings ask themselves continually where they should be financially by the time they reach 30 years of age.   Most people focus on a single number – specifically, what should one’s net worth be by the time they’re 30?  While this is a legitimate approach, net worth is something that’s difficult to project for someone in their 20s.  There are a number of reasons why.  First, the earning power for most people in their 20s is a fraction of his or her earning power later in life.  As such, it’s very difficult to build net worth in your 20s.  Also, many people are busy getting out of debt in their 20s from student loans and so forth, so their move in net worth is many times from the negative towards any level of positive level of net worth – a very worthwhile goal, but hoping for a net worth of $5,000 by 30 isn’t exactly a goal that most describe.  With this said, I think our financial situation at 30 is more about other areas versus net worth.  I’ll explain further…

The reality is that most of us are not going to have a high net worth at 30 unless you had a high salary at a young age coupled with a drastically low standard of living, inherited or were given money, or you started and sold a business in your 20s.  Most of these examples are the exceptions rather than the rule so again, most of you reading won’t have a high net worth at 30 (or are 30+ and can vouch for these statements. So, what should we shoot for at 30 if a high net worth is out of the question for most of us?

Part 1 – A Sound Financial State

This is the first area to address: our general finances.  By 30, you want a clean financial situation that has the potential to be a major tailwind in your life versus a headwind.  What might this look like?  Consider the following:

  • Clear of any consumer debt and/or student loans – mortgage debt being the only debt you carry
  • On your way to paying off your mortgage – this might still be a long ways off or you might have already made good progress, but regardless you have a game plan and are in the process of executing it
  • A nice chunk of money in savings and investments – this might include an emergency fund, savings accounts and basic equities accounts – how much money?  I think $100,000 at 30 is a good goal and very attainable.  This does not include retirement accounts.
  • Retirement accounts that have been funded for some time and are continuously being funded – In addition to the savings outlined above, you should hopefully have been funding a 401(k) or IRA or something of the sort for a few years now.  This money is untouchable until retirement so it really doesn’t do much for you in the near future – still, somewhere in the range of $50,000 – $75,000 and up is a decent goal for 30.

To accomplish the above, you’ll need to be good with your money.  You’ll need to make decent money and be great at saving money – this usually means living frugally.  By combining a decently paying job with strict money management, you can easily accomplish all of the above during your 20s.  Then again, it’s easier said than done, and I’d guess that the vast majority of 30-somethings were not anywhere near accomplishing all of the above.

Most people stop here with regards to financial goals.  I consider the above to be the minimum at 30, and the next part to be the real differentiator in determining future financial success.  Read on…

Part 2 – Business & Income

You can make great progress in your 20s laying the foundation for or implementing your own business or income stream.  I firmly believe that the progress here will be the differentiating factor between financial security and financial prosperity in your life.

Now, launching your own business in your 20s in the traditional sense is very difficult.  You probably don’t have the capital, the experience, the contacts, the skills, and so forth – therefore, I’m not necessarily advocating you jumping off the cliff and taking a stab at some business idea you think is cool.  Instead, I encourage you to explore ways to build additional income streams while keeping your main job.  This will allow you to earn extra income and maybe develop one of them into a full-fledged business down the road.  This approach is super low risk and offers significant benefits to your financial life.  This approach is what I constantly talk about here at this blog – usually I’m referring specifically to online income, but the concepts are general and can be applied to non-online income streams.

Furthermore, an area we often overlook is our business contacts and our network.  The contacts you make in your 20s can be huge down the road with regards to launching your own business or finding additional opportunities in your career.  Take the time to get to know people and reach out.  It will pay dividends later.

What are your goals for 30?  Where are you in reaching them?  What are your thoughts on what I’ve outlined in this article?  If you’re 30 years of age and up, what advice would you give to 20-somethings?

I look forward to your feedback.


  • wyojeff said:

    I think these are some very solid goals for age 30. Most people don't really worry much about their student loans in their 20's and i'm not taking that approach. After eliminating my credit card debt, i've started on my student loans. Being debt free (possibly not even having a mortgage) at age 30 would be a solid place to be financially at age 30. I'm planning on being there.

    I also like your thoughts on starting a side business. Once I get my debt paid down, I plan to do this as well. I've got a little bit of spare change coming in from my blog, but I've got some other ideas in the pipes as well.

  • Buggeredforlife said:

    Wow im a 33 still in debt no saving living UK – shot myself now

  • EagerBeaver said:

    I'm not quite 20 yet and I've got about 5k of student debt under my belt. I don't have to make any repayments until I earn over 42k but I'm not letting them be indexed!! No soiree. By the time I graduate (age 25), I estimate my loans to be about 30k. I am determined to have them paid off by the time I'm 30.

  • lauren said:

    Um 100k by the time you're 30 and that doesnt include retirement??? I dont know anyone in that boat.

  • Brian said:

    Each person is different and so their situation would be different. I am 29, and I will be on track to have $70K in retirement (company matching helped a lot) but I have $20K in credit card debt (started a business that failed to turn a profit). My goal for the next year is to remove my credit card debt, the following year is to remove my student loans, and the year after is to pay off my car. The key is to have a plan and keep with the plan.

  • Andy said:

    Here in Zimbabwe we were billionaires in late 20s and trillionaires in our 30s. All that turned to $0 when we adopted the USD. Now at 39, tell me how on earth i can have $100 000 in 12months. Abrakatabra?

    Good thing though is that i own my house valued at $90 000 debtfree. I also have 3 investment properties valued at a total of $100 000 debt free aswell and earn $1 000 rentals from these.

    But $100 000 cash i dont have and might not taste how sweet it is before i turn 40 maybe.

    So what should i do now

  • Joe said:

    I am a 26 year old male. Firstly, I like to spend money. I have $21k in my company matched 401k and $18k in savings/investment accounts. I made $45k 2 yrs ago, $60k last year, and $97k this year…plan to make $110-120k this coming year. In Sales and didn't finish college degree. Renting and paying on a nice used car, as well as about $8k student loans remaining. Zero CC debt (after fighting for a few years to get it done)! I currently try to live on roughly $3200/month (all utilities, bills, food, fun).

    For people like me who got no money from their parents, (that includes things like college tuition and living, healthcare, auto insurance, furniture, random $$ gifts, gas cards etc) it can be very difficult to become stable financially and have any sort of life. I feel good about where I'm at and suggest doing what you enjoy and finding joy in becoming at peace with where YOU are at financially. I have my own goals of where I want to be by 30, but there are a lot of things I will need/want to spend money on before then. Money sucks when you have none, when you have some, and when you have plenty…so get to where you feel good about the steps you have made to set up the life you want. I hope reading my real scenario helps some people…

  • Melissa said:

    100k by the time you're 30? Reasonable only if you're still living with your parents. I can only assume that the author is from a state where cost of living is very high (and therefore salaries are as well). Also, if you have that kind of money, why not use it to buy a house instead of having it for around while interest accrues on your mortgage? Also, you're been hacked – I'm pretty sure that payday loans link does not belong in this article.

  • dave diggs said:

    This is way off base… all of it.

  • Hard Truth said:

    I agree, way off base, here are some tidbits to consider: Financial Samurai http://www.financialsamurai.com/2012/05/14/the-av
    at 30 yrs old suggests between 127k and 182k for the "above average" person. Crazy! Maybe if you know the boss, became a doctor or nurse, or better yet sold insurance at rip off rates, then yes, you could have that much. Some other sources state that average net worth in the USA is $8,525 between 25-34 yrs old. Way more realistic, and sadly more likely the hard truth. Look, if you make good money (i.e. above $50k/yr) from 26yrs old on, yes, 100k could be attainable. If however you live in a state that has lower wages (i.e. Mississippi), you're not a nurse or successful salesperson, maybe just a customer service associate or landscaper or HR rep good luck making well above 50, 60 or 70 soon. Oh, by the way, do you want to live a little, I don't know, go on vacation, go out on friday/saturday, etc. then expect to spend a little money. Oh, also, did I mention getting laid off or losing your job for some reason like many people have done. Having a 100k plus net worth, because in the end that is what the author is suggesting can be attainable, but not likely, good luck to everyone, but I really wish there was a more realistic net worth survey/study down for folks in their 20's.

  • Lauren said:

    I'm going to be 30 next year. I have 117k in savings and 113k in retirement, and 3 years into paying my mortgage off without any help from my parents. I live frugally and work hard for what I have.

  • Rob said:

    I think extremist always like to comment on threads like these to show off….congrats but it's not the norm