Reaching 40 years with a comfortable financial wealth is an object of desire for many young people. Mandi Woodruff-Santos, a personal finance expert, is on the road: she has already saved more than 600,000 euros. Of course, he has worked a lot for it and acknowledges that he has also been lucky.
At 34, this American podcaster has a net worth of more than $ 700,000 (more than 600,000 euros) between investment assets, home ownership and liquid money, and plan to hit a million dollars before age 40.
Now, Woodruff-Santos has said that to get there, however, it was very important to change his financial routine in his mid-20s, and he has reviewed five habits that have helped him build his current wealth.
1. Save and invest at the same time
Woodruff-Santos says that he left the university in the middle of the 2008 crisis, and that at the time he was afraid to invest. “But I realized that while keeping all my money in a savings account seemed ‘safer’ to me, it would stifle my chances of growing my wealth more quickly,” he says.
So he came up with a plan that would allow me to save, invest, and continue to sleep soundly. “I set up automatic transfers for each pay period.”
– 10% of your salary towards a retirement plan
– Another 10% to a high-yield savings account
2. Do not be afraid to leave a job for a better paid one.
“Once I got into the habit of investing and saving 20% of my salary, I focused on increasing my salary to be able to invest and save even more,” he continues.
That meant seeking promotions, asking for a raise, or leaving a job for one that paid more or offered more opportunities for career advancement.
“Almost every time I quit a job for a new one, I was able to increase my salary by at least 30%,” relates. Although he cautions that of course, this is not the right move for everyone; Let’s always make sure that we take into account our situation and professional goals.
3. Avoid lifestyle inflation
The expert has a special concept called “lifestyle inflation.” “When you’re young, every raise seems like an excuse to get a bigger apartment with more amenities or take more vacations,” he explains.
But she intended to keep my living expenses low. “I decided not to spend more than 30% of my salary on rent, which meant continuing to have roommates even though I could afford to live alone. “
“And when we needed to save money for our wedding, my then fiancé and I moved into his parents’ house for six months. It wasn’t easy, but we were able to save $ 11,000 for our big day,” she says.
4. Don’t create a too rigid budget
He also tells that his first savings plan was very aggressive, and that it did not end up working because of that.
“So I focused on automating all my bill payments, including investment and savings contributions, and forgetting about it a bit,” he says.
5. Do not hesitate to hire someone to help you with the accounts
Mandi says she didn’t think she needed someone to help her put her finances in order. “But what I didn’t know was how to align my financial goals with my husband’s, especially early in our relationship. We had similar financial habits, but very different views on how to spend our hard-earned money,” she says.
Hiring a financial advisor helped them work toward those collective goals in mind. Although he recognizes that it is the least important step he has taken.
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