How to build wealth in your 30s

Key takeaways
  • Investing with a long-term plan means you’re less likely to be affected by short-term market fluctuations
  • Keeping track of your expenses versus income can help identify possible savings to pay off debt
  • Adding more to your super on a regular basis offers tax benefits in addition to improving your retirement.

To all the thirty-somethings out there, now’s your time to shine! These are the years that will shape the rest of your life.

If you’re looking for a bright future—that’s not held back by financial worry—here’s four simple tips to start building wealth now so you can chill later.

1. Consider long-term investing 

Having time on your side—one of the great benefits of being in your 30s—can mean a great deal in the investing world.

Why? If you invest with a long-term plan, you’re less likely to be affected by short-term volatility.

With growth assets like shares and property, your chance of a negative return gets lower the longer you invest. In your 30s you’re in a better position to use that pattern to your advantage – to take on more risk to generate higher returns, if you choose to.


Generally speaking, shares outperform many other investments over the long term.1

There’s also the benefit of dividends. If you invest in companies that pay dividends, you’ll benefit from part of the company’s profits paid to shareholders (generally twice a year). That can be handy income – or reinvested to keep growing your capital.


Owning an investment property may be another way to generate a good income stream – with tenants paying you rent. This income may also help to pay off your mortgage so you can capitalise on another investment later in life.

Like shares, Australian residential property has delivered strong long-term returns.While less volatile than shares, it’s important to note property values do change depending on supply and demand in the market.

2.  Seek help from a professional 

If you value the experience of experts in other aspects of your life, don’t discount it when it comes to managing your life savings.

A financial adviser is not just someone who helps with investments. Their job is to help you with every aspect of your financial life—savings, insurance, tax, debt—while keeping you on track to achieve your goals.

More importantly, they can answer questions like:

  • How can I pay off my mortgage faster and reduce my debt?
  • What strategies can I use to build my wealth?
  • What age can I stop working and retire?

If your to-do list is endless and you never quite have time to tackle your personal finances, a financial adviser may help to set you on the right track.

3. Gain control of your debt

Debt management is a crucial skill when it comes to managing money, saving and planning for the future.

Whether it’s a credit card, personal loan or a mortgage you’re paying off, setting priorities and keeping track of your expenses/income to identify potential savings may help to pay off debts sooner. And the sooner you pay off your debts, the more money you can invest for a better lifestyle in future.

Set priorities

If you have more than one outstanding debt, consider working out how much you can repay on each, based on the minimum repayment owing.

Alternatively, if you’re able to repay more than the minimum, look at prioritising your debts. You’ll need to think about the type of debt you have—an investment loan or personal debt—and how much is owing. If you only have personal debt, you could prioritise repaying debts with the highest interest rate first, given these will be costing you the most.

Keep track of expenses and income

Having a clear picture about what you earn versus what you spend can highlight areas where you could save more. Whatever income you’re able to save can then be allocated towards your debt.

There are budget planners and phone apps you can use to track your spending. Alternatively, you can simply download your bank statements and keep a record of your receipts.

4. Add more to your super

Super is one way to generate wealth over the long-term due to compounding returns. Compound returns is the way your balance increases if you give your investment time for the growth you got this year to grow again next year – and the year after that and the year after that.

In your 30s you’ve got time to get compound returns on your side. One way to maximise this benefit is to contribute more into your super on a regular basis. You can do this using your before or after-tax income and there may be tax benefits that come with this too.

For example, if you contribute some of your after-tax income or savings into super, you may be eligible to claim a tax deduction.

Be mindful of contribution caps though. They limit the amount of super contributions you’re able to make each year if you want to avoid paying tax at your marginal tax rate rather than the concessional rate of


If you have questions and would like your financial situation to be evaluated, please email us on with your contacts, for an exploratory meeting, at our cost, not yours.

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The power of compound interest

Albert Einstein is reputed to have said: “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

As an investor, making your money work for you is the best way to increase your wealth. And the wealth you will accumulate is the result of 2 things: how long you invest and the rate of return on your investment.

You will also need psychological qualities to make the whole thing work. Qualities like being patient, disciplined, knowing the value of things, and being able to act decisively on your own reasoning (and not on the opinion of others) when the  odds are in your favour.

Doing the maths

Why is compound interest so “magical”? The simple answer is: “Because it’s reinvested”. Compound interest is, simply put, interest on interest.

Here’s an example. Assume you invest $100. The following table shows how much return you’d get over different lengths of time, and at varying rates of return.

The power of compounding – in a table

Compound interest

If you invest $100 at 5% over 5 years, you get $128, but if you wait 10 years, that amount rises to $163. The longer you wait, the more you make! Of course, this goes even higher if you can get a higher return. For example, if you can find an investment that returns 15% for 10 years, you multiply your money by a factor of 4. If you wait for 20 years and still earn 15% a year (which is a lot), you get 16 times your money back.

Twenty-percent seems like a very high unachievable return. Actually, it’s pretty rare, reserved to the most talented  investors, such as Warren Buffett (the annual return of per-share market value of Berkshire Hathaway has been 20% per annum, over 55 years…).

Two factors to remember

If you want to accumulate wealth, you will need to start as early as possible and then focus on the best prospective return you can find.

The second factor is obviously the most difficult to get, because it depends on careful study of key elements such as the price you pay for the assets in which you invest, and their intrinsic qualities.

For instance, if you want to invest your money in stocks, you will need to select individual companies that boast high quality, and that trade at cheap valuation.

High quality companies are companies that have a strong competitive position in their market, have growth in their industry, generate high return on capital and growing free cash-flow, a strong balance sheet, and are managed by competent people.

You can’t control the market

Cheap valuation is also not an element you control. It’s usually the reflection of other people’s opinion, aka “Mr. Market”, that sometimes agrees to pay a lot for a company and at other times is willing to sell at a huge discount (per Benjamin Graham’s real quote in his must read book The Intelligent Investor or those quotes from Warren Buffett in his 1987 letter to shareholders).

But if you’re patient enough and know which companies/assets you want to buy, you just have to be patient and wait for the market to provide the opportunity to buy something you like at a fair price.

Then you will just have to stick to your guns and wait for other opportunities to come along.

If you have questions and would like your financial situation to be evaluated, please email us on with your contacts, for an exploratory meeting, at our cost, not yours.

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What qualified advisers have over “finfluencers”

More people than ever are taking control of their money – but where do they go if they’re after financial advice? While ‘finfluencers’ are appealing to younger investors, ensuring any advice comes from a qualified adviser gives you a better chance of meeting your goals.

Since the pandemic began, more people have become interested in investing, particularly in the share market. Research house Investment Trends found about 435,000 new investors bought shares for the first time in 2020 and of these 18 per cent were aged less than 25, while 49 per cent were between 25 and 39. This influx of investors brings a new challenge – that of educating this group on investment strategies. So, where should they go for advice?

Generally, if an investor wants advice, they seek out a financial adviser.  A report into financial advice highlights demand for advice has doubled over the past five years. It found three out of four advised clients engaged with their adviser during lockdown while 2.6 million non-advised Australians said that they intended to seek advice. This demonstrates an increase in awareness of how valuable financial advice is. Other research backs this up. Rice Warner’s 2020 report – Future of Advice – found those who receive advice accumulate 3.9 times more assets after 15 years than those who make their own decisions.

The rise of the ‘finfluencer’

However, not everyone is going to a qualified financial adviser to discuss their financial needs. Over the past few years, financial influencers or ‘finfluencers’ have emerged, dispensing (often questionable) advice via social media platforms. Described as social media content creators that build audiences through providing financial advice, finfluencers can be found on platforms such as TikTok, YouTube, Twitter, Instagram and Reddit. But should people be taking their advice?

Some finfluencers have shown their audiences take quite a lot of notice of them. For example, the number of trades in the US video game retailer Gamestop took off after it was pumped on Reddit and tweeted about by Tesla founder Elon Musk. But it’s a case of buyer beware with these unlicenced and mostly unqualified sources. In fact, the Australian Securities and Investments Commission has been dealing with rising numbers of complaints relating to unlicensed financial advice since March 2020 – when the pandemic began.

But while the advice of some finfluencers may be suspect, they do appeal to a particular audience – such as Millennials and Gen Z. There are also some finfluencers who appear to help people better engage with their finances. But while finfluencers can provide useful tips on how to save or budget, sharing investment tips and strategies is where inexperienced investors need to take care. It’s important to be very wary of investment advice, especially if someone is pushing a scheme that they benefit from personally.

Why a qualified financial adviser?

While a finfluencer doesn’t need to have any particular expertise (and often doesn’t), anyone giving financial advice must hold an Australian Financial Services Licence (AFSL) or be acting as an authorised representative of an AFS licensee. Anyone wanting to become a financial adviser must also complete a full-time professional year that includes at least 100 hours of structured training.

If you’re serious about building your wealth and meeting your financial objectives, a qualified financial adviser whom you can build a relationship with over time, is the best person to provide you with the advice that will guide you at every life stage.

So how does financial advice help investors? Some of the areas an adviser can help with include:

  • Setting financial goals
  • Advising on wealth-building strategies to meet your goals
  • Advising on appropriate insurance to protect your health, wealth and family
  • Estate planning

The benefits of seeking advice are many. An IOOF paper – The True Value of Advice – reveals the long-term benefits that financial advisers provide, with 90 per cent of advised clients surveyed saying that accessing financial advice has left them in a better position financially and 89 per cent reporting that receiving advice allowed them to live their desired lifestyle.

It’s also important to remember that financial advice is not just for those nearing retirement. Seeking advice early on could make a big difference to your finances at all stages of your life, such as when you’re buying a property, starting a family, or wanting to access your superannuation.

If you have questions and would like your financial situation to be evaluated, please email us on with your contacts, for an exploratory meeting, at our cost, not yours.

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Inflation: Friend or foe?

It might be unwise to extrapolate too much from this week’s inflation data on both sides of the Atlantic. This is peak bounce back. Like the surge in corporate earnings that we will see in the results season that started this week, the rise in inflation is largely a matter of arithmetic. The world shut down a year ago and is re-opening today. This was always going to distort the figures.

Take the biggest contributor to this week’s rise in UK inflation, transport costs. The recovery in the oil price has been dramatic, and petrol at 130p a litre versus 106p a year ago reflects that. But this is a return to a more normal world from one in which producers were, briefly, paying others to take oil off their hands and the cost of a barrel of crude was, for a short time, negative. Likewise, the increase in second-hand car prices is largely about a temporary semiconductor shortage affecting the production of new cars. This too shall pass.

So, while the inflation prints in both America and here have been significantly higher than forecast this week, we should not assume that central banks on either side of the pond are necessarily wrong to believe that price rises are transitory. The peak may be a bit higher than predicted but their assumption that inflation will settle back in due course could turn out to be correct.

Let’s hope so. It would certainly be reassuring to those of us whose memories stretch back to a time when we last misjudged the inflationary straws in the wind. Central banks, notably the Federal Reserve under former chair Arthur Burns, ignored the warning signs of rising prices in the late 1960s and early 1970s, and we know how that ended. Inflation never looks like being a problem until it is a big one. It’s far better to keep the genie in the bottle than to have to stuff it back in again.

This week I took questions from investors about my quarterly Investment Outlook. The most popular topic by a country mile was inflation: should we worry; what can we do about it; where are the opportunities? Reading those questions, it struck me that inflation is not a one size fits all problem. Depending on our age and circumstances we will experience inflation in different ways.

For my parents, now in their eighties, inflation was just a given, a part of their world view. They would prefer to spend money today in the knowledge that it would be worth less next year. They were happy to take on seemingly eye-watering mortgage debt because they knew that within a few years, rising house prices and salaries would reduce the burden to a more manageable level. The conventional wisdom was to buy the most expensive house you could stretch yourself to afford.

The biggest difference between my parents’ experience and mine and that of my now adult children, is that inflation was not really their problem to solve. They worked in the public sector (Air Force, teaching) so their salaries and subsequently their pensions were a political rather than a commercial decision. The 1970s was a dreadful period for asset prices – both shares and bonds performed terribly, as investors questioned whether capitalism even had a future. But the collapse in valuations between the mid-1960s and 1982 was an ‘out there’ kind of problem for a family in the embrace of the state.

For my generation, on the brink of what we hope will be a long and healthy retirement, the prospect of inflation is a much bigger concern. I hesitate to complain too loudly because, like many people in their fifties, I too have been a beneficiary of rising asset prices. My children smile through gritted teeth when I tell them that we put down £3,500 to buy our first, inner London, flat in 1989.

But, while there are some people my age who will enjoy an inflation-linked final salary pension scheme, they are few and far between. Most of us are setting out on a new kind of financial journey in which the onus will be on us to make sure that what we have managed to accumulate in the last 30 years of our working lives can last out the next 30 years of retirement.

The most important determinant of our ability to do that in any sort of comfort will be whether this week’s inflation numbers are indeed a temporary spike or the first signs of history repeating itself. If you don’t know the Rule of 72, now would be a good time to familiarise yourself with it and to pass it on to your kids.

If you want to know how long it will take for rising prices to halve your spending power, simply divide the current inflation rate into 72. At just 4pc a year, half-way between this week’s headline inflation rates in the US and here, it will take just 18 years for the pound in your pocket to be worth 50p. At 6pc inflation, it will take just 12 years. You will need to have put aside a great deal for that not to matter.

It is my children, all now in their twenties, that concern me more. They have the advantage over those heading into retirement that their incomes can rise in line with prices. Let’s hope they do because that has not been the reality for many since the financial crisis. And they are starting out with property prices high and interest rates low, the mirror image of my experience 30 years ago. I suspect they will look less kindly on inflation than their parents and grandparents have been able to.

Governments like a bit of inflation. Central banks think they can achieve it. It’s the rest of us who will have to deal with the consequences if they can’t.

If you have questions and would like your financial situation to be evaluated, please email us on with your contacts, for an exploratory meeting, at our cost, not yours.

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5 top investment truths

Many of us have probably received in our in-boxes spams for get-rich-quick-schemes with promises of making great amounts of money, effortlessly. If only getting rich was so easy.

Rather than pipedreams being sold by spammers, here’s a list of 5 investment principles that have stood the test of time.

1. Asset allocation is very important

Asset allocation – how you spread your money across various asset classes like shares, bonds property, infrastructure and alternatives – helps to balance the risk and return potential in your investment portfolio, anchoring it through different economic and investment cycles.  It’s a key driver of long-term investment performance.

By including multiple asset classes with investment returns that move up and down under different market conditions within a portfolio, an investor can protect against significant losses. This is because, historically, the returns of the major asset classes have generally not moved move up and down at the same time.

By investing in more than one asset class, you’re likely to reduce the risk that you’ll lose money and your portfolio’s overall investment returns should have a smoother ride. If one asset class’ investment return falls, you should be in a position to counteract your losses in that asset class, with potentially better investment returns in another asset class.

The process of determining which mix of assets to hold in your portfolio is a very personal one. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon and your ability to tolerate risk.

2. Diversification matters

The practice of spreading money among different investments to reduce risk is known as diversification. Through diversification, the overall performance of your investment portfolio isn’t overdependent on the performance of a single asset class or any single investment.

By spreading your money across a group of investments, such as in your super fund, you should be better able to limit losses when financial markets are volatile, and reduce the fluctuations of investment returns without sacrificing too much potential gain.

Asset allocation, along with diversification, is important because it can have a major impact on whether you’ll meet your financial goals. If you don’t include enough risk in your portfolio, your investments may not earn a large enough return to meet your goal.

For example, if saving for a long-term goal, such as retirement, most financial experts agree to including at least some ‘growth investments’, such as shares, for example, in your portfolio.

On the other hand, a portfolio heavily skewed towards shares would probably be considered inappropriate for a short-term goal, like saving for a holiday or buying a car.

3. Higher returns come with higher risks

Risk is unavoidable when investing. No discussion of potential investment return or performance is meaningful without also considering the level of risk involved.

If you want the potential to earn a higher return on your investments, then you have to be willing to accept more risk or volatility (ups and downs in the value of your investments). But investment success isn’t always about chasing higher returns by taking on relatively high risk – it’s about finding the right balance between risk and return that works for you.

An aggressive investor, or one with a high-risk tolerance, is more likely to risk losing some money occasionally, in order to get better long-term results.

A conservative investor, or one with a low-risk tolerance, tends to favour investments that will preserve their original investment. Conservative investors are concerned with a “keeping bird in the hand,” while aggressive investors seek “two in the bush.”

4. Your time horizon can influence your investment choices

Your time horizon is the expected number of months, years, or decades you will be investing to achieve a particular financial goal. An investor with a longer time horizon may feel more comfortable taking on a riskier, or more volatile investment because they can wait out inevitable financial market ups and downs.

By contrast, an investor saving up for a near-term goal, would likely take on less risk because they have a shorter time horizon.

5. Time in the market is more important than trying to time markets

All financial markets, including share markets, have good days and bad days. From this, it might be assumed that the key to successful investing is simply to be invested on all the good days and not invested on all the bad days.

It sounds tempting, but very difficult to do consistently and successfully, even for investment professionals.

Consider the fact that market timing entails two decisions. One decision is regarding when to get into the market whereas the other decision is regarding getting out of the market.

Getting just one of those two decisions right is difficult enough. Getting both right is a very tall order.

Market timing can be costly

One of the biggest costs of market timing is being out when the market unexpectedly surges upward, potentially missing some of the best-performing moments.

The opposite of market timing is staying invested with a long-term view as the market goes through its cycles.

Here’s something to consider: a hypothetical investment of $US1,000 in the global share market as measured by the MSCI ACWI index, made in 2010, would have grown to $US2,060 by the end of 2019.1

But if an investor missed the 30 best trading days of that period, they would have lost 99% of that return; and missing the 40 best trading days in that period would have seen the investor with a smaller amount than the original investment.

This emphasises the importance of patient capital – giving the market, in this instance, the global share market, time to grow your money rather than trying to pick the best time to invest. Even experienced investment professionals find it difficult to accurately and sustainably time markets.

One more thing

Sitting down with a financial adviser can help you will all aspects of investing, including investing your super.

If you have questions and would like your financial situation to be evaluated, please email us on with your contacts, for an exploratory meeting, at our cost, not yours.

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