10 Financial Goals to Achieve Before You’re 30

hey everybody welcome back to whiteboard finance my name is marco and i'm here to help you master your money and build your wealth thanks to policy genius for sponsoring this video but more on that later in this video we're going to cover 10 financial goals to achieve before you turn 30 years old i decided to make this video because i'm 34 years old at the time of this recording and i've had time to reflect on my own life to be able to offer 10 financial points that i think are important for anyone getting close to their 30s okay number one is no longer dependent on your parents so to be completely honest and not to start the video off on a controversial note i personally don't think anyone in their 30s or older should be dependent on or living with their parents if they can help it i'm not talking about caring for a widowed mother or a sick parent that you have to take care of i'm talking about a situation where you voluntarily choose to live with and be dependent on your parents when you don't have to be or you can afford to do otherwise so you should absolutely be free of your parents by the time you're 30. there are many reasons for this but the biggest one is that the parents end up becoming enablers of a lifestyle that the child may or may not actually be able to afford so for example let's pretend susan is a 29 year old still living with her parents and makes 50 grand a year after taxes if her parents still take care of her cell phone rent and one meal a day this can lead to susan thinking she can live a lifestyle much greater than she can actually afford if her cell phone is 50 bucks a month her potential rent that she's saving is 1500 a month for example and her mom cooking for her one meal a day 30 days a month is 300 a month this is 1 850 a month in savings or a total of 22 dollars for the year this is an after tax bonus of forty four point four percent more when compared to her fifty thousand dollar a year net earnings now if susan is living at home to pay off student debt and to save that's obviously a different story however she will still be in for a rude awakening if she's leading a lifestyle that is 44.4 percent higher uh than if she wasn't living with her parents or being dependent on them so this was just a simple mathematical example not to mention all the other non-tangible character qualities one gains when they are truly self-sufficient also your goal as a kid should not be to be a pain in the butt financially for your parents who have worked their entire lives to raise you you should be the one providing for them financial goal number two is that you have a three month emergency fund so when building a skyscraper you must start with the strong foundation even if you have consumer debt or credit card debt i think it's important to establish an emergency fund first this will be your own personal buffer or insurance plan against life flat tire no problem cracked windshield no problem by time you're 30 you should have at least three months of expenses saved away in some sort of emergency fund whether this is under your mattress in cash which i don't recommend or a savings or money market account this money should be somewhere where you can access it quickly this money should not be tied up in investments or stocks my guidelines on this are is that if you are single and don't have any dependents then three months is fine so if you're someone that is 100 commission sales role or in a career filled with high turnover or a business owner then you should have at least six to 12 months of an emergency fund if you have dependents or children and you are the sole breadwinner then you should have at least six months with kids saved up in my opinion again an emergency fund is a staple to a strong financial foundation number three is to automate your finances not budget i hate budgets most people can't stick to a budget because budgets are just like diets we are human and we are bound to break the diet at some point all of my fat friends are always on the latest diet fads keto this that atkins whatever but they still remain fat i don't mind that they're fat they're just not being honest with themselves losing weight is very simple it's calories in versus calories out that's it being a caloric deficit you'll lose weight the easiest way to budget without actual budgeting is to understand what your monthly net income is versus your average monthly expenses calories in calories out dollars in dollars out once you get a fair understanding of what your monthly income is versus your monthly expenses figure out what that surplus is and every month automate it into different categories so i know exactly how much money i make every month and i have a good idea of how much money i spend every month so my wife and i categorize and automate our savings into these buckets and we pay ourselves first we have an investment bucket a savings bucket emergency bucket travel bucket a car bucket a house bucket these buckets are self-explanatory for what they're for and they're simple if we don't have enough money in the travel bucket then we either wait to take a vacation or adjust accordingly based on what's in the bucket sometimes it's southern france sometimes it's southern ohio it just depends on the amount of money in the bucket uh so by the time you're 30 you should absolutely automate your finances to pay yourself first this is me when i pay myself first uh into these different buckets and this will allow you to understand what you can truly afford number four is to pay off your credit card slash consumer debt if you have credit card debt in your 30s you are doing something wrong there are only three reasons why you should have credit card debt in your 30s one is that you went the college route and you accumulated a lot of credit card debt during college to buy books food and other living expenses that come with higher education this one is somewhat understandable two you don't earn enough income or don't have an emergency fund so you're quite literally living paycheck to paycheck using a credit card as a crutch to get you by this is also somewhat understandable you just need a higher income or three you're a typical consumer this is you right here that's you right there that's a sheep uh you're a typical consumer you're undisciplined with your money but you just can't help yourself because amazon prime and tj maxx feels so good i just love clicking that buy it now button i love it it's so easy you know exactly what you're doing when you're doing it but you can't forego the pleasure of that purchase that little endorphin rush that comes with buying stuff that you don't need to fulfill a much larger gap in your life it's time to reevaluate step three and understand exactly how much you have coming in versus how much you have going out if you see that you're going out categories much higher than your coming in category congratulations you'll be a debt slave for the rest of your life i'm not against credit cards at all in fact i think credit cards are great if you have the discipline to use them 45 percent of americans don't carry a credit card balance and they pay off their credit cards on time every month incurring zero percent interest uh if you choose to carry a credit card uh be the person in the 45 percent not the 55 percent uh this leads us to step number five which is one of the most important numbers uh especially if you live in the united states but before that let's get into today's sponsor policy genius life insurance can give you peace of mind that if something happens to you your loved ones would have a financial cushion to pay for things like rent mortgage payments loans education costs and everyday expenses having coverage through your job may not be enough to properly provide for their families most people actually need 10x the life insurance coverage than they get through their employer policy genius is your one stop shop for 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whether for good or bad your credit score is one of the most important numbers especially if you live in the united states your credit score can either save you a lot of money or cost you a lot of money you should aim to have a credit score of 740 or better preferably 800 or better let's take a look at a simple scenario of someone who wants to buy a house and needs to get a mortgage two people want to buy a three hundred thousand 000 house okay and both have 20 down ready to go one of these people is a 620 credit score the other is an 800 plus credit score the bank is obviously going to give these two people the loan however they will be done at a different rate the person with the lower credit score is obviously perceived to be a higher risk which means the bank needs to be compensated for that risk in the form of a higher rate mortgage so here's the math the 620 credit score will get a 30-year fixed at 5.8 percent okay 5.8 uh the 800 credit score will get a 30-year fixed at 4.1 okay 4.1 percent these are the national averages based on credit score at the time of this recording i'm not just making these up so the 620 credit score will pay 1773 a month with a total of 266 953 in interest over the life of the loan uh so i'll just write down uh 267 just for easy numbers the 800 credit score will pay a 1525.00 with a total of 177 482 dollars in interest over the life of the loan let's just say 178 for easy numbers so you can see the difference right here okay just by having a better credit score the person saved eighty nine thousand four hundred and seventy one dollars over the life of this loan and interest they also have a two hundred and fifty dollar a month smaller payment this 250 a month payment could easily be used to fund one of those buckets that we just talked about earlier in this video or to invest over the course of 30 years and uh assuming just a safe return rate what is this 250 a month in investing what would it grow to be this is just one example of the power of having a good credit score number six is paid off student loans so if you graduate in your early 20s your student loans should be paid off by a time you're 30 whether it's through your own personal financial discipline or through some sort of career forgiveness program you should not have student loans in your 30s unless you went for a super specialized field such as a doctor you graduated in your mid to late 20s and incurred hundreds of thousands of dollars of student loans this is the only scenario that i will be lenient on too many people forego paying off their student loans or simply paying the minimum and they're getting crushed by that four five six seven percent interest rate remember whenever you pay off a fixed interest rate you are making a guaranteed tax-free rate of return of whatever percentage amount that is so for example if you have ten thousand dollars in credit card debt at a 25 interest rate and ten thousand dollars in student loans at a six percent interest rate which one are you going to pay off first obviously the credit card debt because you're making a guaranteed rate of return of 25 by paying off that amount now if i gave you an investment opportunity with a guaranteed 5 rate of return with the maximum investment amount of ten thousand dollars and your student loans were ten thousand dollars at six percent interest which one would you put your money into first obviously the student loans uh so get the student loan monkey off your back as soon as reasonably possible and become one step closer to freedom okay number seven is established income career or business so by the time you're 30 you should have some idea of what you want to be when you grow up a lot of us go to college and pursue empty degrees or degrees with low rois or we had no guidance early on in life and just started working a job a job stands for just over broke you need to start thinking strategically and play chess not checkers with your career you need to establish some sort of income whether it's through a career or through a business or a combination of both via a side hustle for example because this is the only true way to progress and lift yourself up out of the poverty line or even middle class to a higher class lifestyle the worst thing you can do to yourself is make lateral moves in your career or lateral moves in your income or in business i highly suggest that you job hop and increase your income along the way stay in jobs for two three years crush it and then either get paid more or start working with recruiters to find you better paying jobs this is the fastest and easiest way to progress throughout your career avoid the lateral moves at all costs okay eight is contributing to your retirement this should go without saying but by the time you're 30 you should already have an established retirement account this can come in the form of a roth ira of 401k or other types of individual retirement accounts if you're a business owner or solo entrepreneur time is on your side when you start investing and 30 is the age when you start to get at a slight disadvantage so let's take this scenario for example you have sally who's 20 so if you can't see this this is just the number 20. and then you have chris who is 30 years old both contribute the same amount of money towards their retirement but sally started at 20 chris started at 30 and here are the numbers assuming both sally and chris are going to retire at 60 years old this gives sally 40 years to invest this gives chris 30 years to invest i'll assume that they both they'll both invest 500 a month during this exercise and that both of their portfolios earn exactly a seven percent rate of return this is what sally finishes with she's going to be 60 with 1 million 200 thousand 235 771 dollars okay so you're thinking chris will probably be you know million bucks somewhere around there right this is what chris finishes with he finishes with 584 thousand 726 dollars so those ten years doubled the amount of money sally has over chris with the same exact rate of return get it number nine is tracking and understanding your net worth so what gets measured gets managed if you aren't tracking and understanding your net worth you are simply running on a treadmill with no goal in sight you need to think of your net worth as a pie okay this is my crude pie right here net worth is simply assets minus liabilities think of your pi as your total net worth and each slice of that pie is a different asset class for example my net worth is broken down into cash stocks bonds real estate precious metals crypto collectible cars and other business interests i then assign certain percentages or weights to each one of these asset classes depending on my interest or conviction in them and then i simply track my net worth every month with my wife to figure out what percentage of these assets make up our net worth so this exercise takes literally 10 minutes a month and it allows us to understand if we are overweight or underweight in a certain asset class or slice okay i'm actually going to be creating my own web app that does this for you but i'll be talking about that more when i actually build it and decide to launch it so let me know in the comments down below if you'd be interested in something like this like a net worth calculator it would keep track of your net worth and tell you exactly what percentage of your net worth are in certain assets uh when you're overweight you can adjust when you're underweight you can adjust what gets measured gets managed number 10 is getting into physical and mental shape this has nothing to do with finance but it has everything to do with finance and life overall show me the richest man in the world who is sick and i'll show you someone who will give up everything for their health when you start to get into your 30s this is when your body starts slowing down in metabolism testosterone if you're a man and your overall youth if you let it your 30s are still the time when you can maintain or reclaim your youth through a healthy diet and exercise but trust me it only gets harder from here all it takes is about 20 minutes of cardio a day a healthy diet and maybe some calisthenics or weightlifting to stay in decent shape notice how i also mentioned mental shape to be a good investor you need to stay sharp and you need to stay in touch with what's going on in the world this is achieved through reading reading is just like working out but for your brain the best investors that i know i love twitter twitter you're on the pulse you're on the heartbeat of everything going on right now some news and mainstream media is whatever but twitter you can see exactly what geniuses are investing in that manage hundreds and hundreds of millions if not billions of dollars of assets under management but you need to know who to follow it's not going to behoove you to follow uh you know kim kardashian's butt on twitter okay you're not going to get good investment advice from that but stay sharp health physically through health and then mentally through sources of education so that's all i got for you today um i know this last one had nothing to do with finances but think about it if you get sick you don't have a job you don't have health insurance you're filing for bankruptcy that's the way the system works right um obviously in a nutshell but um take everything here with a grain of salt this has just been my experience but i'm telling you right now this is a great foundation for someone who's 34. uh so if you're 30 or younger knock these things off the checklist i promise promise you you can start building your skyscraper through offense and defense the offense is obviously side hustle career moves high roi degrees starting your own business that kind of a thing the defense is getting rid of consumer debt staying out of debt paying off your loans that's how you build a strong foundation hopefully you got value out of this video check out the links down in the description below moomoo's offering free stocks you can sign up for my university down there it will be launched here pretty soon and then as always have a prosperous day thank you so much everybody [Music]

Channel: Marko - WhiteBoard Finance

Views: 135,860

Keywords: 2022 financial goals, 2022 goals, 2022 money goals, financial goals, financial goals 2022, financial goals for 2022, goal setting, goal setting 2022, goals 2022, how to invest, how to save money, investing 101, learn to invest, personal finance, personal finance basics, saving money, set goals for 2022, setting money goals, money goals before 30, financial goals by 30, money goals, my 2022 financial goals, my financial goals this year

Id: 5NqsuyuhsVA

Length: 18min 8sec (1088 seconds)

Published: Thu Apr 14 2022