Building wealth is something that everyone should be doing at all points in their life. Your age can change the trajectory you use to build this wealth but it is not impossible to build wealth in the later stages of life. This isn’t a “get rich quick” guide or scheme, you should avoid those. The steps to building wealth are the same at any age.


You need to do three things: make money, save money and invest money.

Keys to Building Wealth at Any Age

These four keys to building wealth work for everyone, at any age. They will help you open the door to building long-term wealth and establishing a well funded retirement savings.

  1. Get and Stay out of Debt
  2. Establish an Emergency Fund
  3. Always Invest 15% of Your Income
  4. Buy a Home and Pay it Off Early

You’re going to want to get out of debt as soon as possible. This doesn’t mean pay off your house, student loans or car – even though you should pay those off too. This means get rid of the useless credit card debt and any loans that don’t fit the three above. You’ll want to start paying off debt with the snowball method, start with the smallest bill and pay it off and roll that monthly payment into the next smallest one and continue the process until you’re debt free.


As you’re paying off debt, or very soon after, you should calculate out your expenses for 4-6 months and establish an emergency fund. This fund should allow you, and your family, to survive for several months without having to worry about money. The more you have the better but it’s good to have at least 4 months on hand in the event something happens.


If you can invest 15% of your income, you should. However, investing anything is better than nothing so don’t feel too stressed to hit the 15% mark. If your debts are paid off and you have an emergency fund there is no reason for you to not be investing at least 15% of your income. Make sure you’re taking advantage of any company sponsored 401(k) or IRAs.


Almost 70% of all “millionaires” have one thing in common – no mortgage. Buying and paying off a home is one of the most important things you can do prior to retirement. The cost of rent or mortgage is usually one of the largest bills a person has to pay each month. It can eat away at your retirement savings.

How to Build Wealth in Your 20s

If you’re in your 20s then you’re in one of the best spots you can be in. The decisions you make now can have a drastic impact on your later life and retirement. If you do things right you can even consider retiring early. You should start building savings and being religious about adding to it. The earlier you start saving for retirement and investing the less you have to worry about later on.


Let’s look at a quick scenario:


You start investing $200 per month at age 21. If you were active with investments and retirement plans, like a 401(k) you’d have around $2 million in your retirement accounts by the time you hit 65. If you started the same savings regiment at 35 you would cut your retirement savings in half.


The key here is that you have something others don’t. You have time. Time is one of the biggest factors in how large one’s retirement savings grows.


Things you should be doing:

  1. Avoid adding unnecessary debt. If you have debt, pay it off. If you do not have debt then you shouldn’t add any debt to your name. You want to get out of debt as fast as you possibly can.
  2. Live below your means. Basically just say no to anything you can’t buy with cash or that you don’t need. The biggest thing that hurts someone’s savings is not being able to say no and overspending.
  3. Slowly improve your standard of living. You don’t need the latest cell phone or brand new car every year. Instead of upgrading your life each year you should look to upgrade as needed.
  4. Learn how to budget. This goes hand and hand with living within your means. A monthly budget helps keep you on track with where you’re spending your money.
  5. Start early and save often. It doesn’t take a lot of money to build a large retirement savings, but it takes commitment and habit. If you habitually save money over time that money will grow.

How to Build Wealth in Your 30s

If you were like most people and spent your 20s living life – that’s ok. You’re still not too far away from building substantial wealth. You probably have some debt at this point, kids and even a mortgage. It will be a bit trickier to filter through your income and expenses to find money for savings. You shouldn’t let saving for retirement take a back seat from everyday living expenses.


Things you should be doing:

  1. Manage your budget. You’ll want to make sure you’re keeping your budget in line. At this point in life you really don’t want to add any more debt to your name unless you strictly have to, like buying a house.
  2. Establish an emergency fund. You should make sure you have adequate savings to cover any emergencies that may pop up. This should be enough money to survive for 4-6 months.
  3. Max out retirement savings options. You should be taking advantage of your 401(k) or Roth IRA and maxing out your contributions each year.
  4. Don’t pay for your kids’ college. Unless you can pay for their college in cash, don’t go into debt paying for their schooling.

How to Build Wealth in Your 40s

At this point you should already have a retirement savings started, even if it is just a 401(k). According to a recent study, a large percentage of workers in their 40s have less than $100,000 in their retirement savings accounts and survive primarily off of social security. The goal for retirement is to replace around 80% of your income prior to retirement.


If you’re not where you should be with your retirement savings, you’re not alone. There are many in the same spot you’re in but the good news is that you still have time to turn things around.


Things you should be doing:

  1. Establish your portfolio. Meet with a financial advisor if you need to but you should take stock of what you have and where you have it. If you’re not committing to 15% of your annual income you need to start now.
  2. Let your retirement grow. Don’t borrow against your retirement and don’t add any debt. You should be paying off your debt or near paid off by now.
  3. Get rid of the mortgage. If you have a mortgage you’ll want to be aggressive with paying it down. The sooner you can get rid of your mortgage the better.

How to Build Wealth in Your 50s

Nearly 50% of working adults in their 50s have no plans to retire and no savings to even allow them to retire. Your options are getting limited since you’re older but if you have the cash flow you can set yourself up with 10 years or less to retire and actually retire!

Things you should be doing:

  1. Use the annual catch-up contributions. If you have the cash flow you should be taking advantage of the catch-up contributions to your 401(k) and IRAs.
  2. Live within your means and needs. If you’re in a 7 bedroom house and it is only you and your spouse, it may be time to downgrade. You should find ways to cut expenses and lower your total annual expenses. By the time you’re done you should only be paying for exactly what you need to live.
  3. Find health insurance. Many retirees try to survive off of the government based insurance but that only gets you so far. If you are hit with a health crisis later in life it can bankrupt you. Finding good health insurance and planning for that expense can help you figure out how much money you need to retire.