The earlier that you make your financial goals a priority, the better off you will be. However, it is never too late to get started on a detailed financial program. Below we will list a few time-sensitive goals that you may want to consider setting for yourself at each stage of your life.
Financial Priorities for Your Pre-Twenties
If you are prioritizing your financial life in this stage of your growth, then you should congratulate yourself. You have great opportunities here that many other people would gladly turn back the clock for. You have the ability to take financial risks that may pay off a great deal; at the same time, you can also begin a conservative program of saving and safe investments that will help to ensure your financial stability later on in life. Most people your age will just be starting out in the workforce. If you have a job that allows you to save any money at all, begin to save it with the goal of removing yourself from the so-called “rat race” – that is, being in a position where you have to trade your time for an income stream.You want to bolster a savings account that can serve as an investment core – from these savings, you will be able to secure lines of credit for large asset purchases such as real estate and business. You will also be able to invest in securities and businesses that will give you dividends and other passive income streams. In short, you will building a savings account that will eventually work for you.
Set a goal to save at least 10 percent of each and every paycheck that you get. Pay yourself first so that you have no excuses here.
Take at least one big calculated financial risk. Start a business that is based off of your passion and move forward with it wholeheartedly. Invest in a startup that you think has potential. It does not matter if you fail completely at this stage – the main goal is to give yourself experience in the marketplace.
Financial Priorities for Your Twenties
Your freedom beckons in your twenties, and you will likely be looking to have a great time in life. However, you do not have to give up your financial priorities in order to have adventures. Your goal here will be to set up investment accounts that can serve as your “adventure fund.” While all of your friends are spending their paychecks to go to that music festival or that overseas trip, you will be maintaining your capital while having your adventures on the dividends and other interest that your capital generates for you.
Your goal in your twenties should be to research the best investment opportunities that you can get involved in for an extended period of time. Begin nurturing a relationship with a financial planner until you find one that you trust. Begin to research what a DRIP account is and open at least one with a blue chip security.
You should also begin building your credit at this point. The best way to do this is to connect a debit account to a credit card that automatically receives payments from your income creating ventures. For most of you, this will still be a job. If you can set up direct deposit from your income producing ventures directly into your debit account, do so. Pay all of your bills from your credit card every month and pay off that credit card immediately using an automatic debit from the debit account. In this way, you build your credit without taking on any interest payments or risk from the marketplace.
Financial Priorities for Your Thirties
Most people are looking to settle down with a partner in their thirties. Although financial stability of this partner is only one aspect of a choice for life partner, it should definitely be one of the top priorities. Having a person connected to your household with good credit and some savings certainly will increase your ability to expand on your income producing assets.
Speaking of income producing assets, this should be the main focus of your thirties. If you have a savings account and some passive income from your previous endeavors, then your life will have a cash flow that will allow you to your credit to purchase assets that will produce income for you in the future. These assets can be real estate, businesses, artwork, rare coins, etc. You may still have to supplement your income with a so-called “rat race” job, but as long as your assets are increasing overall, you are still accomplishing the main goal that you should be looking to incorporate into your life.
Financial Priorities for Your Forties
According to most studies, your forties and fifties will be the point in life you have the greatest potential for income generation. You will have the most respect in society as a person with experience while maintaining a vigor for business. People will look to you for advice and partnership. Take advantage of this by expanding all of your previous efforts into business and investments. Build up your savings for retirement, and take advantage of any subsidies or government programs that you may be eligible for.
Financial Priorities for Your Fifties
During the sticking of your life, you may look to redirect some of your more risky investments into fixed income, annuities or index funds. You do not have the time to wait out bottoms in the market like you did when you were younger, so take the victories of your past financial battles and lock them in through fixed income investments and mutual funds, supplementing them with some ETFs.
Financial Priorities for Retirement
Although you may retire from work, your money does not have to stop working for you. If you have more time to focus on your financial endeavors, make sure that you keep up with the latest financial tools that you can use to continue to build your net worth without any hard labor.