“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” ~Warren Buffett

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Best Investment Strategies for 30 Year Olds

Get the specific, actionable steps to become a millionaire if you are in your 30s. Use this financial advice for 30 somethings as a step-by-step guide for wealth building. Investing at 30 might seem a bit early to some, but by starting when you’re young, you’ll need less money to reach a million dollars at retirement, than if you start later. Don’t stress if you haven’t started to invest at 30 for your future. Now is the time to start understanding and implementing how to plan for retirement at 30.

Investment Strategies for 30 year olds – Backstory

My husband and I started out with financial challenges. In our first year of marriage, I quit my job to get a graduate degree. Despite living on one income, we managed to save. The next year, I went to work and my husband began his 4-year graduate studies at a private university with sky-high tuition costs. Fortunately, before going back to school we built up our savings accounts. When we had our daughter, I quit work to become a full-time Mom. In fact, we lived on one income for much of the time that our daughter was growing up. Throughout our daughter’s formative years, despite living on one income for much of the time, we aggressively saved and invested. Many decades later, we’ve surpassed our retirement goals. Here are the best investment planning strategies that worked for us. Read on for tips to become a millionaire for 30-year-olds – that work.

Max out your 401(k) to Become a Millionaire in Your 50’s

When seeking the best investments for a 30 year old or even if you’re saving for retirement at 35, your workplace retirement account – 401(k) or 403(b) – is the best place to start. If you’ve put off signing up, do it now! In 2023, the maximum allowable contribution amount into your 401(k) is $22,500, with an additional $7,500 allowed for those over age 50. This doesn’t include the employer match for your 401(k). This is a lot of money, yet, if you’re in the 24% Federal tax bracket, it’s as if you’re only contributing $17,100, a savings of $5,400. Behavioral finance shows that if you have this money automatically withdrawn from your paycheck, after a short while, you won’t miss it. You learn to adjust your spending to your available income.

What are the Best Investments for 30 Year Olds?

Choosing the best investments for 30 year olds isn’t rocket science. Either stick with a target date fund, geared for your projected retirement year or pick several stock and bond index funds. When investing in your 401(k), they’ll offer a choice, but don’t get overwhelmed. Most retirement accounts offer target date mutual funds, which are a one-stop-shop for investors. Within one fund you get a diversified pool of investments including stocks and bonds. The proportion allocated to stocks is greater when you’re younger and lessens as you get closer to retirement. In your later years, you’ll own a larger proportion of bond type investments and less of riskier stocks. You can also set up a lazy portfolio on your own and select several index funds on your own. Read on to find out more about the best investments for a 30 year old.

Slash Fees for the Best Investment Strategy for 30-Year-Olds

One reason that low fee index fund investing is so popular is that more of your money is working for you instead of going into the mutual fund manager’s pockets. Whenever you make a financial investment, whether in your 401(k), IRA, Roth IRA or investment account, look at the fees. Vanguard shows how fees eat up your investment returns. Assume you have a $10,000 investment that earns an average 6% per year. Here’s how various fee amounts will impact your account value 25 years later:

Be assertive and ask your financial advisor the fees charged for your mutual or exchange traded funds. If you’re investing on your own, look at the fund information sheet and check out the average fees. To sum up, when considering, “How to invest for retirement in your 30s?“, check investment fees. Make it a priority to choose low-fee index funds for your investment portfolio!

Index funds are baskets of stocks or bonds that match a pre-determined index of securities. Some total market indexes mirror the entire U.S. stock market. Others focus on the S&P 500 or small capitalization stocks. There are scores of index funds from which to choose. Yet, you don’t need to get too fancy when choosing a couple of index funds. To make your choice easy, check out “What Are Index Funds and Asset Classes Investing?” for a handy list of low fee funds. There are scores of low fee index funds available with Schwab, Vanguard, iShares and many other fund families. For example, Vanguard and Schwab offer two index mutual funds that span the total U.S. stock market. The Vanguard Total Stock Market ETF (VTI) charges a 0.03% fund expense ratio. The Schwab U.S. Broad Market ETF (SCHB) also charges an 0.03% expense ratio. Before choosing investments in your brokerage or 401(k) account, be sure to look at the fees. Bonus; My Best Lazy Portfolio

To ensure that you’re making the best investments in your 30’s – automate. That means, in addition to setting up a direct deposit from your paycheck into your retirement account, and do the same for other investment and savings accounts. Go to the human resources department at your company or create an automatic transfer from your checking account into a savings account and a Roth IRA and an investment account. Even a small amount each month will build up over the long term. You’ll be surprised that once the money is out of your hands and into the savings and investing accounts, you’ll learn to live on less.

Just like losing weight, or learning a new skill, saving for retirement at 30 begins with your behavior today. Don’t let your friends, the media, new gadgets or exotic vacations derail you. If this financial path is important to you, here is another step in a wealth-building plan that works. Think of it this way, you can live like you’re rich today or you can become rich tomorrow. It’s your choice. If you overspend on the largest expenses – housing, transportation and food – it’s difficult to succeed financially. Fortunately, there are many ways to live well and economically, but you need…