9 Financial Goals To Achieve Before 40 #Finance

today we’re going to talk about nine specific financial goals you want to achieve before you hit 40. with average life expectancy around 80 40 marks the halfway point for the many of us so how we manage our #1a73e8; text-decoration: none;">Finances up to that point will have a ripple effect on the second half of our lives if you’re ready to understand what financial goals will set you for the rest of your life let’s get started but first if you’re new to the channel my

name is tay from financial tortoise in this channel i discuss personal Finance investing and all the while surviving in a multi-generational household if these topics sound

like something you’d like to learn more about i would appreciate it if you could hit that like button and also consider subscribing and if you have yet to download your free copy of the standard generation’s guide to financial security 10 steps to securing your family’s financial

future please go to my website at financialtortoise.com and do so i send out weekly newsletters with other great tips on mastering your money and i wouldn’t want you to miss them the first financial goal you want to hit before the age of 40 is to define your ideal financial lifestyle we spend

much of our 20s and 30s trying out new things making a lot of mistakes and hopefully learning from them but as we get closer to the age of 40 we want to start clearly identifying what is most important to us and how those priorities define our ideal lifestyle you might have thought that cars were

very important to you because you were a kid that loved reading car magazines growing up but after a decade of spending thousands of dollars on new cars you realize now that they didn’t bring you as much joy as you hoped instead you found that having a nice backyard is more important to you

because you learn you love hosting get-togethers with your family and friends in that case you have defined what brings you joy and you can prioritize your spending on a nice backyard instead of new cars when we have our ideal financial lifestyle defined it makes it easy when it comes to purchasing

or investing decisions we know what brings us the most joy and we can prioritize our spending to maximize that while we cut back ruthlessly on the things that don’t bring us as much joy if you don’t know what your ideal financial lifestyle is start by writing down what your ideal day

would look like how are you spending your day is it going out to a fancy restaurant with your significant other or is it just spending relaxing time at home with your family when you have your ideal day written down you can objectively start to identify how you can prioritize your

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finances to achieve that number two financial goal that you want to achieve before 40 is more specific it is to have zero dollars in Debt except a mortgage the 40s is a

time period when a lot of responsibilities converge for many of us it’s the age when we take a lot more responsibilities at work managing departments and divisions you have decades of work experience under your built which means more people are now coming to you for your expertise in addition

your family is likely growing with some of your older kids getting ready for college and your younger kids getting more involved in extracurricular activities and to add to that your parents are now getting older and may require more assistance from you physically and even financially now if you

still have Debt when you’re in your 40s it can add a layer of stress on top of all these other responsibilities that i just mentioned dead is quite an interesting concept it is touted by some as a way to achieve the american dream others say it’s a devil and should be

avoided at all cost my personal perception is this that should be treated like the neighbor you respectfully tolerate when you see them in the morning but someone you should never invite into your house Debt is oftentimes necessary but don’t accept Debt as a

normal way of life they serve a function in our society because they allow us to purchase big expenses like a home but we should be very cautious about letting it get too comfortable in our living room when we accept Debt as a normal way of life we start to purchase things we

don’t need we allow lifestyle creep to slowly start intruding into our life and ultimately hinder our ability to live our life to the fullest in our 40s alright number three financial goal you want to achieve before 40 is to achieve a Credit score of at least 800. i know i

talked about avoiding Debt in the previous point but that doesn’t mean you shouldn’t get the best deal when you’re about to take out a Loan it’s almost impossible to avoid Debt if you want to function in modern society

unless you have a half million dollars in cash sitting around most people wouldn’t be able to afford a home without access to a home mortgage so if you’re going to get that home mortgage you might as well get the best deal possible and the key component to that is to have the best

Credit score possible and 800 plus before you hit the age of 40 is possible because you have lived long enough where the length of your Credit score shouldn’t impact you negatively as it did when you’re younger and don’t underestimate the impact

of a few percentage points when it comes to your Debt Interest Rates on a half million dollar 30-year mortgage Loan the difference in total interest that you will pay between a three percent versus a four percent interest rate is close to a hundred

thousand dollars if you have an 800 plus Credit score you will surely get the best interest rate in the market because lenders will look at you as someone who is responsible with his or her Loan but if you have a lower Credit score because you

didn’t focus on building it you might only qualify for a higher interest rate and this could cost you thousands of dollars in the long run number four financial goal to achieve before the age of 40 is to have a solid emergency fund and this is cold hard liquid cash in your bank account as i

mentioned earlier when we hit the age of 40 a lot of responsibilities converge at once your kids might need braces your aging parents might need someone to drive them to their medical appointments or a new unexpected investment opportunity might present itself we don’t have as much

flexibility in our 40s as we did in our younger self it’s not just us so if something will happen we can’t just pick up and move or decide that we’re going to cut back and live on rice and beans for the rest of the year imagine how your spouse or kids would react to that a solid

emergency fund will help you smooth out the bumps of life that will surely come in our 40s and these pumps will come more often than we like think of emergency funds like the bowling guard rails that keep the ball within the lane despite whatever life may throw at it a good rule of thumb is three

to six months worth of expenses in a readily accessible account like a checking or Savings account if you’re a lot more conservative like my wife and i a 12 month emergency fund is also a good option and if you still have some ways to go before you are 40 start building it

little by little so you don’t have the burden of trying to come up with a large sum of cash in a short period of time another thing i love about having a solid emergency fund is that they can function as your fu money made famous by jail collins you might want to take on new opportunities in

your 40s or maybe even take some time off from work because you want to spend more time with the family having a solid emergency fu fund gives you that option number five financial goal you want to achieve before the age of 40 is to have at least five times your annual expenses and

Investments and this is also what most financial independent enthusiasts would call coast fire you achieve coast fire when you have enough money invest in the market or even if you stop putting any more money into it the compounding alone will allow you to have enough money when

you reach your retirement age five times your annual expenses and Investments by the time you reach the age of 40 is good enough for most people to have enough to retire on if they were to hold out Investments until the age of 65. 25 years of compounding and

growing can turn a half million dollar Investments at an eight percent rate into a well over three million dollars so if you want options when you reach the age of 40 option to pursue a new career option to slow down from work or just spend more time with the family for a few years

aim to have at least five times your expenses Investments and personally i believe that low cost total market index funds like vtsax is one of the best places for individual investors like you and i it allows you to take advantage of the upside of the market with limited downside

risk number six financial goal to achieve before the age of 40 is to have solid career Capital cal newport the author of so good they can’t ignore you defines career Capital as the skills you have that are both rare and valuable and that can be used as a

leverage in defining your career it might be okay to spend our 20s exploring without really developing expertise in anything but in our 30s we want to start really investing in our careers so that we have career Capital we can leverage in our 40s and the leverage can be in the form

of negotiating higher salary or better positions because our career skill sets are that good i’ve seen too many people who are still in the exploration phase of their career even when they reach the age of 40. still trying out new pathways new grad schools and not really building up expertise

in one area and this can be in a corporate nine-to-five job a technical field like healthcare or even starting a business as an entrepreneur 40’s will be a time when we want options because of all the things that will be hitting us from different angles of life and a key way to have that

option is that steve martin the comedian famously said be so good they can’t ignore you number seven financial goal to achieve before the age of 40 is to develop solid fitness regiment and despite what you may think fitness is tightly correlated with

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance not having a good fitness regimen will hamper your ability to work effectively to earn more and cost you more in health care costs in the long run and when i talk about a solid

fitness regiment here i want to specify that it is something that is age appropriate your fitness regimen in your mid to late 30s shouldn’t be the same one that you follow when you’re 21. i don’t know how many times i pulled my muscle because i was trying to run or lift the same

way i did when i was in my 20s or try to eat the same way i did when i was in my early 20s my stomach definitely didn’t appreciate me that day consider your body as a machine that needs to be well maintained and taken care of and when you can develop a diet and workout plan that is

appropriate for your age it will keep that machine operating like a ferrari instead of a rundown old beater that will break down at the first speed bump for me i have pretty much cut out processed food from 80 of my diet and my exercise is focused on minimizing injury rather than getting bigger or

faster if we don’t take care of the one body that we have it doesn’t matter if we have a billion dollars because we won’t have the body to enjoy it number eight financial goal before the age of 40 is to have our estate plan and life Insurance in order and this is

especially important if you have family members that are depend upon you your family will likely have the biggest financial needs in your 40s and 50s and what would happen if something was happened to you my recommendation is to have a 20 or 30 year term life Insurance at least 10

to 12 times your annual expenses people will try to sell you things like whole life or variable life Insurance ignore them if you want to learn more why i personally don’t recommend them check out my CashNews.co here where i go more in detail and when it comes to an estate

plan work with a reputable estate lawyer who can set you up with appropriate legal paperwork necessary for your family if you happen to get hit by a meteor tomorrow what you’re essentially doing for your family with legal documents like will or even a trust is that you’re helping them

avoid the probate court if you have to pass away without a good estate plan your beneficiaries won’t be able to automatically receive your Assets they’ll need to go through a probate court to meet with the judge and they’ll likely need to work with a lawyer it

could be lengthy and expensive why put your family through such an ordeal plan ahead and set up your life Insurance and have a solid estate plan number nine financial goal to achieve before the asia 40 is to start the money conversation with your asian parents jean chatsky the

famous personal Finance writer talks about the 70-40 rule when a parent hits 70 or a child hits 40 it’s time to talk according to the pew research center nearly 30

percent of americans with a parent of age 65 or older help mom or dad out financially and this is a lot more common in lower Income households getting your none;">Finances in order is within your control so you may feel comfortable with all the goals that we just talked about you have defined your ideal financial lifestyle you have no Debt and you have more than five times your expenses Investments

however your desired future could be derailed if your parents aren’t prepared financially it’s not like you’ll need to provide financially but by starting the conversation early with your parents you have more information you can work with and you might find that they’re a

lot more prepared than you gave them Credit for and in a rare case they might actually welcome a conversation with you given david meaning to talk but couldn’t find the right time to bring it up if you want more tips on how to talk to your aging parents about money check out

my CashNews.co here where i go in more detail i firmly believe that being part of the standard generation doesn’t have to mean financial stress with careful planning and preparation we can thrive in this stage of life thank you guys again i’ll see you in my next CashNews.co