Mon Jul 22 2024, by Tyler Gardner

Three Things to Know About Investing in Your 30s

Here are the only three things you will ever need to know about investing in your 30s. I'm Tyler, a former financial advisor and portfolio manager. Now, I make financial content for free so that you don't have to pay for it.

1. Start Investing Weekly

If you were to invest $110 a week in a low-cost index fund like Vanguard's VOO and earn the historical average on the S&P 500 of 10%, by the time you're 60, you'll most likely have close to a million dollars.

2. Consider the Impact of Inflation

However, a million dollars will not have the same purchasing power that it does today because of inflation. Adjusting for a national average of 3% annual inflation, we recalibrate. Instead of 10%, let’s use 7%. That same $110 a week over the next 30 years will be worth $540,000 in today's dollars.

3. The Cost of Inaction

Alternatively, you could convince yourself that $100 a week isn’t significant. By leaving that money in a savings account, instead of gaining 7% per year, you’re losing out 3% per year. In 30 years, $158,000 of your hard-earned money will only equate to the purchasing power of $63,000.

So the choice is yours. You can keep telling yourself that a hundred bucks here and there won't make a difference, or you can realize that by leaving your money in cash, you are literally missing out on a half million dollar opportunity of real money.

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