7 Secrets to Becoming Wealthy in Your 20s and 30s

7 Secrets to Becoming Wealthy in Your 20s and 30s

Theres no straightforward way to guarantee yourself a rich future, but these 7 strategies can help you do it while youre still young.

We all wish wecould be wealthy. For most of us, its a far-off dream that someday, eventually, we might be able to turn ourselves into self-made millionaires. But the truth is, building wealth isnt about putting all your hopes into someday. Youre never too old to start building wealth, but if you start when youre young, you have far greater potential to amass a fortune–and more time to let that fortune compounditself as you grow older.

That being said, life in your 20s and 30s is not without its challenges; you might have student debt, a tenuous career, and dozens of unknowns that keep you from doing everything youd like to build your wealth faster. Theres no straightforward way to guarantee yourself a rich future, but these seven strategies can help you do it while youre still young.

The folly of youth is believing that theres always enough time for everything. Youngsters often believe that retirement, or wealth building, is something that comes later in life, and aremore preoccupied with the concerns of the now. Unfortunately, this often leads to a cycle of Oh, I should do that next month, month after month, until before you know it, youre 10 years older and youve missed out on a decades worth of compounding interest. The first step is to stop procrastinating; saving and investing is scary, but the longer you wait to do it, the fewer advantages you have.

My use of the word secrets in the title of this article might have brought you here hoping for a guaranteed, almost magical solution to make you wealthy. There isnt one. The fundamental objectives are simple: Make more than you spend, and use the excess to invest wisely. How you invest is up to you (with a few caveats below), but the obvious goal is to make investments that have a high likelihood of making you more money in the future. Thats it. The ways to achieve this are by making more money, spending less, and investing more wisely.

Your next goal should be to invest in yourself; you are the best resource you have to accumulate wealth. Investing in yourself means spending more time on your education, refining your own skillsets, and branching out to meet new people who might help you achieve your goals. The more educated, skilled, experienced, and connected you are, the more valuable opportunities youre going to get, which means higher salaries and more options for you down the road, both of which will help you build a stronger financial foundation.

Remember the steps from point 2: Make more money, spend less, and invest wisely. Point 3 covered making more money, and this one covers spending less. Make a detailed budget for yourself based on your projected income and your current expenses. Set firm limits for your expenses, and keep a close eye on where most of your money goes–you might be surprised at some of the areas where you waste the most money. Once identified, you can start refining your budget to spend as little as possible, and funnel the rest into a savings or investment program.

Before you start regularly saving and investing money, its usually a good idea to pay down any debts you may have accumulated. Credit card debt, student debt, and even car loans can carry heavy interest rates that drag you down, demanding monthly installments that chip away at your revenue while racking up additional interest and penalties that take away even more money from your future self. Dont let this eat away at your potential; make it a first-line priority to get rid of your debt as soon as possible.

Youre young. You have a lot of years ahead of you. Now is the time to take risks. Invest in higher-risk, higher-payoff stock opportunities. Consider quitting your job to start your own business. Jump on new ventures and new opportunities. If things go south, youll have plenty of time to make up for it. Most wealthy individuals will tell you one of their greatest keys to success has been taking calculated risks. The majority of the population sticks with the safe route, so if you want to break away from the pack, you have to try something new, possibly something uncomfortable.

Even though risk-taking is a generally rewarding strategy in your 20s and 30s, its also a good idea to diversify your efforts. Dont build up just one skillset, or one set of professional connections. Dont rely on one type of investment, and dont gamble all your savings on one venture. Instead, try to set up multiple income streams, generate several backup plans for your goals and businesses, and hedge your bets by looking for new opportunities everywhere. This will protect you from catastrophic losses, and increase your chances of striking it big in one of your ventures.

By applying these seven secrets in full swing, youll be able to start accumulating wealth no matter where you are in life. Yes, the first steps are hard–paying down your debt, establishing your credentials, building an investment portfolio, etc.–but if you do it early and do it right, youll set yourself up for massive financial success later on.