10 Money Revelations in My 30s

A few things I’ve come to realize about money as I recently hit the mid-point of my 30s…

1. A successful financial life comes from increasing your career prospects and saving the difference, but that doesn’t happen with lifestyle creep. Most personal finance experts talk about how much you can save from cutting back, but very few talk about the benefits of finding ways to earn more money. A combination of the two helps with financial security, but the biggest thing most people have a hard time with is keeping their standard of living relatively constant when they do finally start making more money. The secret sauce comes from making more money while not wanting more stuff.

2. House payments act as a form of a fixed income investment. One of the best things about a fixed rate mortgage is the fact that you know exactly what your payments will be every single month of every single year you remain in that house. This is a great thing for financial planning purposes. And paying down your mortgage offers a guaranteed return based on the after-tax interest rate on your mortgage. Pay a little more each month and that return improves. Housing has not been a great investment historically. But being a homeowner offers a simple way to slowly turn a liability into a valuable asset that can provide psychic income.

3. It makes sense to pay up a little for good beer. This is something I did not value highly enough in my 20s as quantity won out over quality. Craft breweries might be getting a little out of control with some of their new flavors, but to me the number of new breweries popping up is one of the few bubbles where everyone wins.

4. It rarely makes sense to pay up for good wine. Expensive wine, on the other hand, is overrated. You shouldn’t have to pay more than $20-50 for a really good bottle of wine. In a tasting most people can’t tell the difference anyways.

5. Spending money on time is always a good investment. This one became even more apparent to me when my daughter came along, but it certainly makes sense when you want to focus more time on your career, as well. In the past there were a number of tasks that I would do myself out of principle alone. Why pay someone else for something I’m able to do myself? I’ve now realized that outsourcing makes sense when it gives you more time to do things that are really important to you.

6. How much money you make has diminishing returns over time. After a few years in the workforce many people will start to figure out their number. If I could only make $X a year I would be set. The problem is that once you reach that level there will always be another one and then another after that you’ll be striving for. It’s obviously not a bad thing to make more money, but making more money alone isn’t going to make you happy.

7. Experiences resonate more than material possessions. Whenever I get together with friends or family we’re always sharing stories about fun, funny or random things that happened in the past when we all got together. No one ever gets together to share stories about how fun it was to go on a shopping spree or buy a bunch of clothes or household items. Spending money on vacations or dinner with friends or time with family will almost always pay off. You can’t say the same about material possessions that tend to lose their luster in short order.

8. Buying a book is one of the best deals on the planet. I’m sure I’ve said this before, but it’s a pretty amazing deal when you’re able to spend $10-$20 to read a couple hundred pages of someone’s thoughts, stories or ideas that have been developed over a number of years along with months or even years of research to back it all up. Not all books are worth your time, but reading a good book is one of the more underrated investments there is.

9. Negotiating is an underrated money skill. I’m by no means an expert negotiator, but simply asking people and businesses for a break on price can go a long way. You don’t have to wait until you’re haggling for a car to negotiate either. There are plenty of different businesses that are willing to haggle on price — credit card companies, insurance providers, cable companies, banks, retailers, etc. The worst that can happen when you ask for a break on prices or fees is that someone will say no.

10. Saving money is a huge stress reducer. The best thing a savings or investment account can provide is peace of mind. It’s never fun to shell out money for house or car repairs or healthcare expenses, but it can take the stress level down a few notches when you realize that you have some savings in the bank that can act as a backstop when things invariably go wrong.

Further Reading:
Personal Finance is Personal

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.