How To Be Wealthy By Age

How much money should you have saved by your 20s, 30s, 40s, and 50s? Brian and Bo break down net worth by age, retirement savings benchmarks, investing goals, and wealth-building strategies for your 20s, 30s, 40s, and 50s. See how your finances compare, what net worth targets to aim for, and how priorities like emergency savings, investing 25%, buying a home, tax optimization, catch-up contributions, and retirement planning change over time. Whether you’re wondering how much should I have saved by 30, 40, or 50, trying to become a millionaire, or building toward financial independence, this is your decade-by-decade roadmap to building wealth. Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:26Speaker 01

  So good, so good, so good. Cashmere outerwear and boots are up to 60% off at Nordstrom Rack. Save on brands like Ugg, Vince, and Kohlhaan. Join the naughty club for free to unlock exclusive discounts. Great brands, great prices. That's why you rack.

• 0:45Brian Preston?

  Do you want to be wealthy? Well, the truth is being wealthy is going to look different based on your age.

• 0:50Speaker 03

  Brian, I am so excited because today we're going to show you what it really looks like to be wealthy at every stage of life. We're also going to show you how to overcome the challenges and take advantage of the opportunities in each stage of life so that you can truly be wealthy.

• 1:05Brian Preston?

  If you're not aware, I'm Brian, he's Bo, and we're the Money Guy Show where two financial advisors walk you through your wealth building journey. With that, let's dive right in.

• 1:19Speaker 03

  So Brian, as we were talking about how to lay this out, we thought there would be an interesting format to walk through each stage and age. We want to look at a financial snapshot. We then want to look at what are the challenges in that decade? What are the opportunities? What does an actual wealthy person look like? And what are the net worth targets that you ought to be hitting if you're truly a financial mutant at each of these ages?

• 1:41Brian Preston?

  This is going to be fun because I think for a lot of us, we aspire or we think we should look like a 50 or 60-year-old when we're in our twenties, and that's just not the case. I mean, when we pull back the layers and you see that the typical, you know, person who buys a Corvette is 63 years old, you realize I don't need to be buying those type of cars when I'm in my twenties. So I love that we're going to just shed light. And with that, let's jump right into what does it look like to be wealthy for your twenties?

• 2:10Speaker 03

  Yeah, I think this is great. Despite what Instagram says, despite what the highlight reel would suggest, the actual makeup of a 20-year-old is a little bit different. We know that the median household income across 20-year-olds right now in this country is a little over $60,000 a year. Their total debt load, not including their mortgage, so this would be student loans, credit cards, auto loans, about $24,500. Their median retirement savings is just a touch under $12,000. And their total net worth on average, on the median for those in the twenties, right under about $21,000.

• 2:48Brian Preston?

  I think it's important, this decade especially, there's going to be a huge difference from the way you enter this decade and the way you leave this decade. You know, other decades, like you think about your 40s or 50s, you know, yes, there's going to be differences, but it's not going to be the night and day difference for a 41-year-old versus a 49. I think twenties, you're likely broke as a joke when you're in your early twenties. And then as you leave your twenties, hopefully you've started catching some traction. So don't let those numbers throw you off. If you look at this and you're in your twenties and you're broke as a joke, everybody in their twenties is a winner. But before we talk about all the good stuff, let's talk about what the challenges are in your twenties.

• 3:27Speaker 03

  Yeah, I think a lot of people, especially in today's day and age, coming into their working career, they recognize that student loans are a big issue. But I mean, you talked all the time about even when you were coming through school, the cost of higher education is very different than what the cost of higher education is today. So a lot of 20-year-olds are facing a thing or a reality that their parents did not face.

• 3:50Brian Preston?

  Yeah, if you look at the stats, this is, look, the average balance of student loan debt for Gen Z is a little under $22,000. Look, the promise of education, guys, now you need to be much more of an active participant to make sure you're actually going to get the return on investment of that education. So go into this experience with your eyes wide open.

• 4:12Speaker 03

  Another challenge that we see for folks in their twenties is that expenses are high, but frankly, starting at the very beginning of our careers, we're often in a low-income position. Entry level pay makes it difficult to pay for rent, pay bills, pay utilities, and be able to save for the future. So if you're someone who's just starting out and you don't have a ton of discretionary capital, you don't have a ton of discretionary cash flow, it's okay. A lot of people in your position are in that same place.

• 4:40Brian Preston?

  Well, and that leads to, remember I started off saying when you're twenties, you start off broke as a joke. Well, that means you also likely don't have a big emergency fund because, you know, this is what's going to keep you from making desperate decisions when weird things show up in your life, like your car breaks down or you have a period where you're unemployed. So don't fall asleep on this. And that's why if you look at the stats, the median emergency reserves for a Gen Z is only around $400. If you remember in the Financial Order of Operations, emergency reserves is so important, we want you to have it in steps one and four. So at a minimum in your twenties, start trying to have that highest insurance deductible cover.

• 5:19Speaker 03

  What I think is so heartbreaking is that $400, I bet for most Gen Zs, that doesn't even cover their highest deductible. I bet that doesn't even cover their health insurance deductible. It's not going to keep you protected from an emergency. I think a lot of young people feel this pressure. And so what they begin trying to do is say, okay, I'm behind. Life is hard. Things are expensive. I got to figure out the hack. I got to figure out the cheat code. So they start looking at these get rich quick schemes, whether it be something like sports betting or maybe some sort of like more aggressive type investment like crypto. And they begin thinking, well, the only way to be wealthy is if I figure something out that the rest of the world hasn't figured out.

• 5:56Brian Preston?

  Look at this stat. It's 80% of Gen Z feels they're financially behind and they're turning to exactly what you said, crypto and sports betting. Can I just hit the pause button? Anybody and everybody, if you're in your twenties, you're not behind anything. We're going to show you in a minute with the opportunities of what 20-somethings have. You guys, you literally are all ahead of the curve. So don't let anybody fool you. The typical American doesn't even start saving and investing until they're beyond 30 years of age. So if you're watching this and you're in your twenties, don't feel behind. Don't go out there and do something like jumping into sports betting, thinking that's the way to go into this. There is a much more proven and easier path to create your wealth.

• 6:37Speaker 03

  I think so many young people right now, Brian, are hopeless. They figure, okay, the world is stacked against me. The deck is stacked against me. There is no hope. And one of the best things you can do is actually build hope into your financial plan because when you are in your twenties, there are a number of opportunities that you should be so excited about. And Brian, you just alluded to the very first one. This is literally where you have the most valuable tool, the most valuable ingredient in wealth creation on your side. You have time to let your money work.

• 7:11Brian Preston?

  I mean, the wealth multiplier, this is something we have, you know, tried to put out there so you guys get excited about it. And we talk about how $1 for a 20-year-old has the potential to become $88 at retirement. For a 30-year-old, it's 23 times, still an incredible opportunity.

• 7:27Speaker 03

  But not 88.

• 7:28Brian Preston?

  But it's not as good as 88 times over. So guys, I'm literally here to tell you, in your twenties, you are a billionaire of time. So get very serious about, yes, you might be broke, but you can trade some of your time and your wages and actually turn that into money that if you get it invested and give it enough time, it's going to be magical, magical. You're going to understand the power of compounding growth.

• 7:52Speaker 03

  You also have the opportunity at this stage to begin building these unbelievable habits that will serve you well later. You get to really understand the idea behind long-term investing and why that time can be so valuable. We've talked all the time about folks in their twenties that have this early start edge, this early start advantage, that if you're a 20-year-old and your goal is to get to $1 million by the time that you get to retirement, by the time that you hit 65 years old, you've only got to save about $95 a month, right? But if you wait, just waiting 10 years, it makes it actually four times harder. Instead of a 20-year-old having to save $95 a month to get to million-dollar status, a 30-year-old has to save $340.

• 8:37Speaker 03

  And if you wait until you're 40, it's actually 10 times harder. The earlier that you can figure this out, the easier the process becomes. And your twenties is a great time to start figuring this out. Maybe you didn't figure it out at 21, 22, 23. So what if you're 24, 25, 26, it's not too late.

• 8:55Brian Preston?

  Yeah, and I think that this, hopefully this empowers you to now realize the next thing, the opportunity for your twenties is you have the maximum amount of freedom and flexibility. A lot of times, you're not necessarily married or you don't have kids yet. And this is why you get to kind of figure things out. You get to try to figure out, hey, what can I go invest in myself? What skill, what trade, or what side hustle can I go do because I have extra time on my side? There's lots of ways that you can take your moment in time and try to figure out how you can create some type of arbitrage to put this money to work so it creates something for you in the future.

• 9:32Speaker 03

  Okay, so let's talk about now, what does it look like to actually be wealthy in your twenties? And again, this is not the Instagram highlight reel. This is not the summer in the Mykonos Islands. This is not the fancy car. This is not the expensive watch. A wealthy person in their twenties actually looks a lot different. It looks like someone who's living within their means. They recognize I've got X number of dollars coming in. I'm tracking where those dollars are going and I'm making sure that my living expenses are less than that amount. I'm naturally building up margin in my life.

• 10:07Brian Preston?

  Well, you're seeing, we just said, live on less than you make. That's the key. You're never going to build success unless you can live on the less thing you make because once you start creating that margin in your life, Now you can start building an emergency reserve so you can avoid the desperate decisions. Now I'll take a step further. Now you can start investing for something for retirement. And Bo, we laid out, if you start doing this, now I know we keep repeating. We talked about a hundred dollars a month to get you to millionaire. I think it's important if we take that same concept, but we show what percentage of those savings is your contribution versus how much of it is actually compounding growth?

• 10:43Speaker 03

  Yeah, it's wild for, if you think about that 20 year old that saves 95, 96, a hundred dollars a month and gets to millionaire status by the time they get to retirement, of that million dollars that they've built, 95% of those dollars are growth dollars of the million, $955,000 of that is your money making money. You only actually had to save about $52,000 over the course of your working career to get to that million dollar status. But as time goes on, you'll notice it decreases. But maybe you're 25, maybe you're 30, you should still get excited because you still, if you are in your twenties, if you have a two in front of your age, time is on your side.

• 11:26Brian Preston?

  Well, I want to put an exclamation point on is that you think about somebody that's in their twenties. You have to save $96 a month. That is the, literally when we talk about the latte effect, this is probably the only early twenties is the age where literally lifestyle decisions, like our consumption decisions, it's not even lifestyles, consumption decisions can turn you into a millionaire. If you fast forward to when you're 25 years old, now you have to save about $184 a month. Now look, that maybe that's a little bigger than consumption, but now we're talking about lifestyle decisions. Maybe instead of you buying the fancy car to impress people who really don't care, you drive something much more modest when you're 25 years old. 30 years of age, I know we're about to kind of move into the next decade,

• 12:09Brian Preston?

  but this is maybe the apartment you move into for that $340 a month, that might be the difference from you just living in a normal, still good part of town apartment versus getting the one that's got the quartz countertops or, you know, comes with plantation shutters versus blondes. I mean, look, the, I'm using real world examples. I can remember when you were relocating up here.

• 12:30Speaker 03

  Yep.

• 12:30Brian Preston?

  You and your wife chose an apartment that was very nice, but it wasn't the one, because we toured, I came up here and toured with you on some of these.

• 12:38Speaker 03

  It wasn't the fancy one.

• 12:39Brian Preston?

  And I was like, one of them was like, wow, this is the one you bring people to, to impress them. And the other one was just very nice.

• 12:46Speaker 03

  Yep.

• 12:46Brian Preston?

  And it was the decision in the monthly rent was huge.

• 12:50Speaker 03

  Huge. Uh, I think another, another characteristic of wealthy people in their twenties is that they're actually positive about the future. Again, I think it's so easy for us to become discouraged and negative and have this pessimistic view. Well, we ask our wealthy clients every single year. We interview them with, hey, would you describe yourself as a pessimist or an optimist? And overwhelmingly, our folks who have had financial success say, hey, I'm an optimist. I always believed that my best days are ahead of me, opportunities are in front of me, things will likely work out. So if you can frame your mindset to have that positive attitude, even in the midst of the challenges, those student loans and low income and all these other things that might be difficult right now,

• 13:35Speaker 03

  you're going to likely set yourself up for success because the future is bright if you start making the right decisions today.

• 13:42Brian Preston?

  Just do something in your twenties. I'm telling you, none of you are behind. If you're watching this and you're actually in, your, your decades, your age starts with a two, just do something, you're going to be ahead of the curve.

• 13:54Speaker 03

  So where should you be by the end of this decade? Well, again, you know, we sort of have these mile markers or these bench, uh, these benchmarks based on, okay, we don't know exactly what our expenses are going to be in retirement, but if our goal is to replace 80% of our pre-retirement income, and we want to be on that trajectory, then by the time we get to the end of our twenties, by the time we get to 30 years old, we want to have at least one times our annual salary saved up in liquid investment. So if you make $60,000 a year and you have a portfolio of $60,000 across your Roth IRAs, 401ks, AFTX account, we would argue that you are on track and you are where you should be in your twenties.

• 14:34Brian Preston?

  Yeah. So let's get to one times. And by the way, if you're looking for a way and what, how to get to your next dollar, to actually what to do with it, I'd encourage you to go check out our financial order of operations. Completely free to you if you go to moneyguy.com/resources.

• 14:47Speaker 03

  All right, Brian, now let's shift to the thirties. What does it look like to be wealthy for someone in their thirties? And let's start with the financial snapshot. Right now in this country, according to the US Census Bureau, the median household income is a touch over $90,000 a year. Total non-mortgage debt balance is 32,500. Retirement savings is now increased to about $50,000 and net worth in total is about 104,000. Just one really quick eye notice. We just said if you're on track to where you should be, you should have one times your annual household income saved up. Well, on the median annual household income for someone in their thirties, 90,000, retirement savings, 50,000. We're already starting to see a discrepancy.

• 15:28Brian Preston?

  Yeah, we, even the net worth is, is, and so you're, you are going to start to notice that harder decisions come for those who procrastinate. And this is why I will tell you, and I think you, you just did a great segue, because I was going to make the point is the thirties is the last stop on easy. So guys, I'm talking, when we get excited, I'm about to go through all the things that are struggles or challenges you'll have in your thirties, but I'm still here to tell you, your thirties is the easy button on, you can do this, you're still going to be ahead of the curve if you'll just make something happen while compounding interest and your wealth multiplier is so high.

• 16:03Speaker 03

  So what are the challenges that we face in our thirties? Well, the first, I think you can't ignore this, it's housing affordability. If we're going to be honest with ourselves, it's getting harder and harder and harder to buy a home, but it's not impossible, but it's not easy. According to the National Association of Realtors, the median sale price of an existing home in July of 2026 was $434,000. Brian, do you remember how much you paid for your very first home?

• 16:33Brian Preston?

  I don't want to, let's just say that it was half of that.

• 16:35Speaker 03

  It was not, mine was not either. And then you compound on top of that, the current mortgage rates are around 6.7% for a 30 year conventional loan. Buying a home right now is not easy.

• 16:47Brian Preston?

  And that's why I, I have a lot of sympathy in the fact that, look, now my interest rate on my first house was six and three quarters. So I mean, that doesn't freak me out. It's really the affordability that we've taken. So, because you don't, you shouldn't have to pay for both. You shouldn't have to have high purchase price plus crazy high interest rates. You should hope that there's a chance. Now I will say there are some cracks and I plan on doing some content. I've been sharing with the, the writers. There have been some cracks in certain markets in America right now where housing inventories are way up, prices are starting to get adjusted down. I'm not calling it, but at least you're starting to see that a lot of people, hopefully I'm hoping that we start to see some opportunities.

• 17:28Brian Preston?

  It's still not going to be like it was 10 years ago, but it could be better than what it is. But I still think it's, it's very fair to, to acknowledge this is a tough time and that's why we've done content.

• 17:40Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus.

• 18:06Speaker 04

  So good, so good, so good.

• 18:08Speaker 01

  Stay cozy and look cool with up to 60% off cold weather gear at Nordstrom Rack. Save on cashmere, outerwear, boots and more from brands like Ugg, Vans, Kohan and Hunter. Join the Nordy Club for free to unlock exclusive discounts, shop clearance and new arrivals first and more. Plus buy online and pick up at your favorite Rack store for free. Great brands, great prices. That's why you Rack.

• 18:34Brian Preston?

  On should you buy, should you rent? Go check this show out. This show was one of our better performing shows because I think we were very honest. We actually, we did them, we didn't do the traditional thing where it's always better to buy. And we also focused on, hey, location, location, location, your market's going to vary depending upon where you live in the country. Please go check out this deep dive on the data. And I think you'll come out on the other end with a little better understanding of what's going on in the housing market.

• 19:01Speaker 03

  You know, another headwind I think a lot of people are facing in their thirties is this is kind of, if it's not the very beginning, it's right in the middle of the messy middle. And for most people, what the messy middle means is that we're getting married and we're having kids and we're growing our family. And so just the cost of family, just the cost of our little nuclear circumstance gets bigger and bigger and bigger. According to LendingTree, the average middle income family spends approximately $29,000 on child related expenses during a baby's first year of life. Now, Brian, I'm going to be honest, I think that number to me seems high. I don't want to question the data.

• 19:40Speaker 03

  But again, if we're talking about averages, I do bet there are people who go buy the nice crib and the fancy car. And if you think about all the costs that you incur, it would not be difficult to rack those up. And I think a lot of folks in their thirties are facing the reality of those costs.

• 19:56Brian Preston?

  Yeah. And I think that ties into the next point is a lifestyle creep is real. I mean, it can be not only having babies, but it can be just your lifestyle, the cars you drive, the house you live. This is the age, I mean, I think in your twenties, you just kind of expect all of your peers are in the same boat as you. It is thirties that you start seeing some separation, but I'm going to here to tell you, it's not always in the life. Lifestyle that people look like they're living. I'm here to tell you the thirties, I think, is the stealth decade that those who are making really good decisions in their twenties and thirties, you're starting to see separation on the net worth statement. The problem is nobody walks around, nobody walks around with their net worth over their head. So I'm here to tell you, avoid the lifestyle creep, your ego, your pride.

• 20:40Brian Preston?

  I know we all want to look good to our friends and family and our peers, but I'm here to tell you, there is something very valuable in the future. Your future self will be so excited if you can just do a little bit of deferred gratification in your thirties.

• 20:54Speaker 03

  And what's great is if you can do that, your thirties is still an unbelievably powerful decade because there are tons of opportunities available to you, not the least of which, most people, if you're in a career and you're pursuing a vocation, it is not uncommon that you are likely going to have a higher income in this decade than you had in your twenties. Well, obviously, as your income increases, that gives you the opportunity to create more margin, to save more, to have more money going to work for you. So where in your twenties, things might've been so tight and they might've been on the razor's edge and it might've been just trying to make ends meet. Hopefully in your thirties, you're starting to see a little bit of reprieve there that allows you to pursue some of your other financial goals.

• 21:35Brian Preston?

  And this is, and I've repeated this, but I think it's a point worth repeating. You still have so much time in your thirties. This is one of those where, guys, remember the typical American doesn't even discover that they can save and invest for the future until their early thirties. So you still have the opportunity to, to make it work. And that's why, by the way, when we have, if you go to our money guy.com slash resources and look at our deliverable, how much did you save? We've done the math on this. This is still the easy button. When people say, hey, why is y'all savings rate so high at 25%? Look, if you look at our own savings strategy here, for somebody who starts saving, investing when they're 20 years of age, if you want to retire a normal retirement at 65, you only need to save and invest 6%.

• 22:19Speaker 03

  You don't have to do a ton.

• 22:19Brian Preston?

  But nobody, most people are not saving and investing at 20 years of age. Fast forward to when you're 25 years of age, 10% does a lot. A lot of you are just through your employer match is going to get close to half of that covered. Fast forward up to a 30 year old, now you're starting to see some numbers here. You gotta be saving and investing 17%. Fast forward to, maybe you deferred this until you're 35 years of age. You see that somewhere between 34 and 35, 24% for the 34 year old, 30, I mean, 27, I said 24% and 27% for the 35 year old. You can see why we landed on 25%. If you are curious, like I said, go to money guy.com slash resources. We

• 23:01Brian Preston?

  have a great resource here for you to line up when you think you want to retire. All my fire people get in there. You can actually retire early with this chart too. Compared to your age, you'll know exactly what you need to be doing.

• 23:12Speaker 03

  You know, Brian, it's really interesting. One of the things I feel like we hear in our comments all the time is, man, I love these guys, but they're just so hopeful for 20 year olds and everything is like geared towards 20, 20, 20, starting out. Yeah, it is true. If you, if you start out early, it's an easier path. But if you're someone in your thirties, and that counts from age 30 all the way through 39, the reality is, the three ingredients of wealth creation still apply to you just in the same way they did to your 20 year old self. If you can exercise discipline, discipline will be living on lesson you make, making the decisions to live smaller, not larger, making the decisions to defer gratification, you will create margin and creating margin, even at this age, applied across enough time, can be wildly impactful. So it's not like

• 23:57Speaker 03

  the rules change or the game changes. In your thirties, if you're just now figuring this out, it still doesn't have to be super difficult, but you are going to have to take an active role in building for your financial.

• 24:09Brian Preston?

  Well, and that's why I think it's a good time for us to kind of go ahead and pivot the conversation and say, hey, what does it actually look like to be wealthy in your thirties? And the first thing is, once again, if you looked at that, if you went to money guy.com slash resources, how much did you save? When people say, hey, did y'all just stick your finger in the air and figure out a savings rate of 25%? Cause that sounds heavy. And we take a little flak for that. And I'm like, no, remember, now you get to count your employer match, assuming your household income is less than $200,000. But for many of you, if you procrastinate too long, 25% is not even going to get it done. So this is the decade I want you to firm up, getting to a savings and investment rate of somewhere between 20 to 25% depending upon how good your employer matches.

• 24:53Speaker 03

  And look, a great spot check you can do, Brian, you hold the thing up for me. A great spot check you can do is, hey, am I somewhere between steps five and step seven? If I'm maxed out my Roth IRA, am I doing my employer's sponsor? If you're doing that in your thirties, that's a really good indication that you're where you need to be. And then, when it comes to making these giant life decisions, it's no longer the lattes. Now it's the place that you're going to live. If you decide to buy a house, if you decide to get on the ownership train, you're doing it the right way. You're not buying more house than you can afford. You're not becoming house rich and life poor. And if you want to know how to do that, we have a rule around that. We want you to follow 3525 where for your first home, now this is not for subsequent homes, this

• 25:34Speaker 03

  is not for home improvements, but for your first home, we're okay if you put 3% down, you plan on living in the house for at least five to seven years, and you keep your total housing cost below 25%. If you can check yes in the affirmative to all three of those, there's a really good chance that you're not buying more house than you can afford and robbing from your future self.

• 25:55Brian Preston?

  Well, I want to take it also, I think another thing you need to pay attention to is, are you taking full advantage of every time you get pay increases? You know, in your twenties, maybe you have a job, you don't have a career, but I think a lot of you in your thirties, you're actually in full career mode now. And, but you look at your savings rate and you're like, I'm saving, I remember I said, I did a set it and forget it when I was 28 years of age and put 10% in. And you're probably feeling pretty good about that. But meanwhile, you've gotten multiple pay raises since then. Now you're 33 years of age and you're like, why am I still just saving 10%? But you're, you're seeing our numbers, you're feeling motivated. Here's what I'd encourage you to do. If you don't feel like you have any margin to save more, the next time you get a pay raise, why don't you go with

• 26:39Brian Preston?

  the 6040 method? Meaning 60% of this new pay raise is going to show up in your future through savings and investment. The only 40% is going to be left for consumption and lifestyle. If you can do these type of incremental decisions with the goal of trying to get you to 25% as fast as possible, I think your future self will show and your numbers will show your net worth, your success, and the ability to have flexibility to live your best life will all show up from that small decision right now.

• 27:09Speaker 03

  So where should you be by the end of this decade? Well, if you're a financial mutant and you're trying to stay on target, we would say that by the time you get to the end of your thirties, by the time you hit 40 years old, you should have three times your annual income saved up in liquid investment. So if you're making the median household income right now of $90,000 a year, we would expect by the end of your thirties, your investment portfolio to be somewhere around $270,000. If you can say yes to that, we would argue that you are on track with where you should be by the end of this decade.

• 27:41Brian Preston?

  All right, Bo, before we move on, let's do a shameless plug for Abound Wealth.

• 27:46Speaker 03

  I have no shame because I'm mighty proud of the work that we get to do for our clients every single day.

• 27:53Brian Preston?

  Here at Abound Wealth, we're fee only. We're fiduciary advisors. That means we're legally required to work in your best interest. And we love helping our clients optimize their army of dollar bills so they can live their best life.

• 28:05Speaker 03

  And before you leave a mean comment about us self promoting, keep in mind, Abound Wealth helps us keep this entire thing going, creating free content, growing the team and changing the financial landscape.

• 28:17Brian Preston?

  We're honored you're watching and listening. And we hope you use this content to help you learn, apply and grow your army of dollar bills. And when your financial life gets complicated, it'll happen. We'd love for you to come back to where it all started. That's the Money Guy Show and Abound Wealth.

• 28:33Speaker 03

  If you're ready to take the relationship to the next level, check us out at aboundwealth.com or click the link below.

• 28:39Brian Preston?

  All right, let's talk about a new decade here. Let's talk about those 40 somethings.

• 28:43Speaker 03

  40s, we often call Brian, it's a little bit like the fork in the road. So let's take a snapshot at where the median American is. Median American incomes have increased here. The median household income is about $106,000. Total non mortgage debt is about 28,000. Retirement savings is now up to 105,000, not anywhere close to where it should be. And the total net worth is at $265,000 on the median.

• 29:08Brian Preston?

  Now, you, you gave the prelude and you said fork in the road. I think this is because this is the decade that if you did anything in your twenties and thirties, You're starting to see the fruit from that.

• 29:17Speaker 03

  That's right.

• 29:17Brian Preston?

  You're feeling really good because you've got now, we're probably going on 15, 20 years of compounding growth. Your army of dollar bills is getting pretty sexy and pretty exciting. If you're somebody though, you didn't, you've procrastinated, you know, there can be lots of excuses, but there's other things, but this is still an okay time to wake up and realize, hey, I've still got opportunities. But I do want to be honest is that there's a lot of things still pulling at you at this stage. Now, the good news, this is the decade that millionaires start showing up on the scene. A lot of research shows that people somewhere between 27 to 29 years of saving and investing cross into the two comma club, that's seven digits, meaning you become officially a liquid millionaire.

• 30:01Brian Preston?

  But there's also challenges and the first one, we call this the sandwich generation, Bo, and that's because you're getting sandwiched between children, they're getting older and they're getting more expensive because you've got college and as well as just all the activity fees that come. But also your parents are getting older and you're getting squeezed because of aging parents and some of the decisions that go with that. This is something to pay attention to.

• 30:26Speaker 03

  Yeah. 54% of Americans would describe this situation that way. I've got aging parents and some of their care falls on me and I have growing children and their care obviously falls on me. And so I feel like I'm stuck in this middle place and you're feeling pressure on both sides. And when you feel that pressure on both sides, it becomes very, very easy to begin taking your eye off of your own financial circumstance, which is noble. You want to be able to help your loved ones. You want to be able to serve them. But if you allow that to drag you in a bad position, you could end up repeating that same negative cycle that you're beginning to experience.

• 31:02Brian Preston?

  Also, I think the 40s is the decade, maybe you've gotten soft with a higher standard of living. Look, I get it. 20s and 30s, you can handle anything. By 40s, if you've been making bad decisions by accelerating your luxury and other things, you might be straight up just bougie. But you look at what, hey, what is this going to be in the future? Use this as motivation. If you've made yourself bougie because you, you know, you're soft in the fact that you need to stay in nice hotels when you travel, you need your house to be a certain way, your car a certain way. I want you to ask yourself, what is my future self going to look like? If you have to go back down the rungs of success, this is not going to be good. So pay attention to what you've done with a lifestyle creep and higher standard of living.

• 31:42Speaker 03

  And look, if you're doing it right, we have a natural release valve built in. Bro, hold the thing up. We have a natural release valve. At step number eight, you can live in luxury. You can do those things because you know, you've done the stuff that you're supposed to do. But far too often, again, this is part of that sandwich. We, we begin prioritizing the wrong things at the wrong time. And one of the big challenges, especially for folks in their 40s, your kids are now getting a little bit older. By the end of this decade, your kids might be going off to college. And so you're now beginning to have this pressure, oh my goodness, I gotta save for college, I gotta prepare, gotta prepare, gotta prepare. And now caring for the next generation from a financial standpoint takes precedent and priority over you making sure that your own solid financial footing, if you do that,

• 32:25Speaker 03

  and if you miss out this decade by getting your priorities wrong, it can put you in a bad spot for the next two, three, four decades.

• 32:32Brian Preston?

  Okay, let's talk about what we got going for us in the 40s. Here's some big opportunities you have going for you. Peak earning years. This is the decade where, hey, if you're going to be behind, why not have the biggest shovel of your life? Meaning statistically, this is the best time. Don't take our word for it. Look at the median household income. There it is. Look at that. The peak earning years are somewhere between 35 to 54 with the 45 to 54 running away with it. Get in there, catch up. You can do lots of stuff. If you've procrastinated or put things behind, this is a great opportunity.

• 33:07Speaker 03

  With a bigger shovel, you can move more dirt. That's just a fact of the matter in your 40s is when that often happens. And it's likely that in your 40s, now you begin to own your time a little bit more. In your 30s, you feel like you have to say yes to everything. I'm gonna say yes to social commitments, yes to work commitments, yes, yes, yes, yes, yes. In your 40s, perhaps now you've attained a level, you've reached a place where now you can actually start saying no to some things and you can make sure that you're spending your time and your efforts and your energy doing the things that you want to be doing, not just doing the things that you feel like you ought to be doing.

• 33:43Brian Preston?

  Well, with these big earnings that you're having in your 40s, you're also now, this is when, because we're probably running through the financial order of operations. We've blown through five with tax-free growth. We're starting to max out our 401ks. We're getting to the point where maybe we're under step seven, we're even doing after-tax brokerage accounts. This is when you can really be opportunistic with your tax optimization. We always talk about the three bucket strategy. What we're talking about that was tax-free assets. This is your Roth accounts. You're, you take advantage of all the tax-free money, your tax deferred, that's your brokerage, I mean, your, your tax deferred accounts or your employer match that you're doing with the 401k. And then after-tax, that's that brokerage account that you're opening up to hopefully build the bridge to your future retirement.

• 34:26Brian Preston?

  Take advantage, you can legally manipulate the tax code when you're in your 40s because you have the income and the assets to make it work.

• 34:34Speaker 03

  Yeah. A lot of times these things change. In your twenties and thirties, Roth may made all the sense in the world, but now that your income is up, now that the tax benefit has increased, it might make sense to shift your dollars to pre-tax. And oftentimes when you do that, just shifting your dollars to pre-tax might save you enough in taxes to fund some of those other financial goals, like maxing out a backdoor Roth, like saving more, like getting your savings right up. So what does it look like for someone to actually be wealthy in their 40s? I think one of the truest signs is that someone who is thriving in their career, it's not just a J O B. It's not just a thing that they clock in and clock out of, but it's something they actually do and are excelling at and find some sort of fulfillment and purpose.

• 35:19Speaker 03

  And it may not be the thing that you feel like you were put on this earth to do, but it's a thing that while you're doing it, you're able to do it well and you're able to find the enjoyment in it.

• 35:28Brian Preston?

  You're also saving and investing at least 25%, maybe even beyond 25% if you're in catch-up mode. I also like that, hey, we said fork in the road. For those who are behind, you might be saving, investing greater than 25%. But if you made good choices in your twenties and thirties, maybe this is the decade you get to start making some of the lifestyle decisions where you get bigger purchases and you're making them with cash. You don't have to jeopardize your future because they're just not moving the needle from the future. You've had enough success that you can reward yourself in step eight.

• 36:00Speaker 03

  You're also beginning now to likely start optimizing your investment strategy. Perhaps you've been doing target retirement index funds. You've been focusing on save, save, save, build, build, build. But now you've reached that critical mass where asset allocation, asset location can add some benefits. So you graduate from a generalized financial solution, generalized investment portfolio to something very specialized to your situation. Again, this is the decade when most folks hit the two comma club. And so you want to make sure you adjust accordingly. So where should you be by the end of this decade? How do you know if you're on track? Well, if you get to the end of your 40s and you have 6.4x your annual income saved up, we would argue that you're on track.

• 36:44Speaker 03

  So if you have the median household income of $106,000 a year and you've saved up 6.4x that amount, that means that by the time you hit 50, your investment portfolio would be around $680,000.

• 36:58Brian Preston?

  Man, now we're getting to the point, this is where it all comes together. I'd like to talk about 50s and beyond.

• 37:04Speaker 03

  So if we look at a snapshot of the median American in their 50s, their income is now about $117,000 as a household. Non-mortgage debt is pretty consistent. It's right around $23,000. Retirement savings are now up to $200,000 and total net worth for the median American in their 50s, $363,000.

• 37:26Brian Preston?

  I think that this is probably a great time to talk about challenges because a lot of Americans are having to make tough decisions. The first thing in your 50s, you're probably, it's not something that's sitting under the surface. You're very aware of your age. You're also very aware of where your retirement account is.

• 37:41Speaker 03

  Yeah. And 2020, 2024 AARP survey found that one out of five adults over age 50 have no retirement savings. They've not done anything. And they found that three out of five adults over the age of 50 are worried that they won't have enough retirement savings to support themselves. They've done something, but they're beginning to have the realization and recognition, I have not prepared the way that I should have.

• 38:05Brian Preston?

  Yeah. And I'm looking at all of my people who are in high paying, especially if you're in the industries, fast-growing industries like the IT industry and so forth. In your 50s and beyond, you're going to have less job stability. This one breaks my heart because I've actually experienced this with a lot of my clients. Unfortunately, 56%, that's not a misprint, 56% of workers age over 50 are laid off or pushed out of, pushed out of the workforce into retirement, not from their choosing, but because this is just what's brought to them. So guys, if you're in your 30s and 40s and watching this for the 50s, get to work because this is when you don't always get to choose your exit. So begin with the end in mind and plan accordingly that you might not always get to be in control

• 38:50Brian Preston?

  of what happens with your income.

• 38:52Speaker 03

  In that same vein of not being in control, we often don't get to control what's going on with our health as well, because as we age, naturally our medical costs and what it costs to remain healthy are going to increase. 65-year-old that retires in the year 2026, it's according to the Employee Benefit Research Institute, can expect over the life of their retirement to spend $185,000 on healthcare and medical expenses. If you remember, the median American right now has about $200,000 in retirement savings in their 50s. By 65, they're going to spend nearly that full amount on healthcare. That's certainly a challenge that you want to make sure you've at least thought through

• 39:36Speaker 03

  and accounted for when it comes to how you're building your financial plan.

• 39:39Brian Preston?

  I think we've thrown enough cold water on this decade and beyond. So let's talk about opportunities. I do like that the government at least has realized, hey, for a lot of people that might be waking up and realizing, hey, they're a little behind on the savings and investments, you can legally now get catch-up contributions on your retirement account. The government will help you by allowing you to save and invest even more for the future.

• 40:01Speaker 03

  That's catch-ups across your 401K, across IRAs, even in your HSA. So if you are above 50, you don't know the additional catch-up amounts, make sure you educate yourself on that because this additional savings, the size of your portfolio, now your investments are likely growing at a faster rate, assuming you've done what you're supposed to do. If your $10,000 in your 20s made 10%, it's not life-changing. But if your $10,000, your $1 million in your 50s makes 10%, now you've made, makes 10% and now you've made $100,000. The bigger the numbers get, the bigger the numbers get, and you're likely beginning to see that in this decade.

• 40:40Brian Preston?

  Yeah, and this is also for those who've made good decisions. A lot of you are financial mutants. You're watching financial content on YouTube or listening to this in podcast form, you've actually done well. So you get to start thinking about what's your legacy? How are you going to actually bless the generation after you? What are you doing for, to make sure that you are stewarding this wealth well? And I think a big part of that is we can transition into what does wealth look like in your 50s? Guys, don't sleep on, what does your health look like? Because what my saddest things that I've dealt with is people who save what they need, but they just don't have the health to do the traveling, to do the adventures. So make sure you're not sleeping on what it looks like to be wealth.

• 41:23Brian Preston?

  Health is wealth, especially in your 50s and beyond.

• 41:26Speaker 03

  Another sign of someone in their 50s that's doing well is they understand risk management. Now they've begun to move into a place where now they're completely debt-free and they're actually beginning to experience more freedom. They actually control their financial life, control what their dollars do, and are not encumbered by having to make a monthly payment or make debt payments every single month, year over year.

• 41:47Brian Preston?

  Yeah, I love the, this is kind of bringing it all together. You're actually at the stage where you get to multiply your wealth. You know, all through this case study, always, we've been running a case study or milestones that you should look for. If you think about from your 20s to your 30s, by the time you get to 30, you want to have one times your income. If you're saving and investing for the future, by the time you get to your, to 40, you want to have three times your income. We decided, hey, what if we actually took somebody who discovered the Money Guy Show? We've been doing this 20-plus years now, but so we're not quite as long as this projection's going to show, but I still think it makes the point. Somebody who's 25 years of age, making $60,000 of income, who just started saving and investing just 10% of their income.

• 42:27Brian Preston?

  And if they did that all the way to age 65, would that 10% reach these same milestones that we've been detailing by every decade? What did we find, Beau?

• 42:36Speaker 03

  Well, we found that at 65, they'd have about $2.6 million saved up. And do you recognize if you did that, you would have blown the milestones out of the water? If you can figure this out early, if you can start making the right decisions early on in your journey, not only will you be able to hit these milestones, these markers we're talking about, but you will blow them away. And that's going to open you up to more options, more flexibility, more opportunity to live the life that you want to live on your terms.

• 43:08Brian Preston?

  Well, you're also getting to the point where you're ready to land the plane. And a lot of you, you're not going to remember what small decision has led to this big, great, big result that you've created for yourself, but you are realizing, man, there's a lot of things you just don't know. You don't know where your blind spots are, and you're starting to realize, hey, man, I have just one retirement, I don't know what I don't know. And this, man, is it complicated now because I'm thinking about doing Roth conversions, I'm thinking about, I hear this thing about the taxability of social security, I hear about Medicare and IRMA payments. What, what are these guys talking about? You start realizing there's a lot of complexity that success has brought to your doorstep. And you're like, hey, how do I do this better? How do I make sure that I'm not sleeping on something that are a mistake that could cost me literally millions of dollars?

• 43:53Brian Preston?

  That's where you can take the relationship to the next level. We literally work with clients all across the country on a long-term relationship format. I think you can tell, we love planting the seeds of knowledge and then waiting for you to create that success. And then, once you reach that, now we say this is the abundance cycle fulfilled. So go check us out, moneyguy.com, become a client. I'm your host, Brian, joined by Mr. Beau, Money Guy team, out.

• 44:18Speaker 05

  The Money Guy Show is hosted by Brian Preston and Beau Hanson. Brian and Beau are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

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