Building wealth in your 30s

Building wealth in your 30s 150 150 Kieran Hall

When you’re in your 30s, retirement can seem like a long way off. It’s a time of competing priorities as you juggle a whole range of things – a young family, stressful work commitments, travel and a mortgage perhaps. Whatever you’re doing, building wealth for the future might not be top of the list. But your thirties are actually a great time to start financial planning and the earlier the better.

Most people understand the concept of compound interest. Putting away small amounts of money early on can yield significant results in the long run. If you are making full use of tax concessions through your investment portfolio, you will also get the full benefit of these over time. But most people don’t start protecting their wealth early enough.

There are a three key areas that I discuss with clients to protect their wealth in their 30s.

First is investment planning and management and a big part of this is risk profiling. When talking to a client, I will look at their current investments, such as superannuation or their investment or property portfolio and consider their risk tolerance and what investment time horizon they’re planning for. We’ll then go through a risk profile to make sure they’re comfortable with the level of risk and tailor a strategy in line with that. This will give the client confidence in how their funds are invested and what their expectations should be over the long term.

Alongside investment planning and saving is wealth protection. Wealth is slowly accumulated over a working life but it can be lost overnight through poor investment decisions or just life circumstances. Personal insurance is key as it makes sure you have a mitigation plan in place. If something were to occur and you were unable to work or you lose your income, having protection in place to cover debts helps ensure your financial stability.

Lastly, focus on something that’s important to you. An important thing that often crops up when I talk to my clients in their 30s is stress. This is usually caused by competing priorities such as family, debt and work. It’s important to sit down as an individual and think about what’s important to you, what makes you happy. For me personally, it’s getting out once a week to go for a surf. So rather than just getting caught up in the daily grind, I make sure I take time out to do that each week and it makes such a difference.

Financial planning for retirement may seem so far away but if you put it off you run the risk of missing out on the compounding effect and tax concessions that you can receive along the way. Starting in your 30s may seem daunting and unimportant, but it’s probably the most powerful thing you can do to improve your finances over the long term.

Kieran Hall is an Executive Advisor at Viridian Advisory

This post and some supporting materials may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we may have given you, having regard to your own objectives, financial situation and needs before acting on it.  Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
 
The material in this post is correct and complete as of the data it was posted.  Viridian is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within this site.