Don't expect to make any money until after 40.

By TLS

I’m talking to all the youngin’s out there, and maybe some others.

0.0001%, that’s about the percentage of the population born into or luck into extreme wealth. Probably, I didn’t spend much on that scientific study. The point however, is that the vast majority of us have to work our butts off, still have a great deal of luck, make a lifetime of more good decisions than bad, be in the right place at the right time more often than not, plus a whole lot more going on, in order to have a chance at making good money (wealth from now on), over our lifetime.

Ok, if that didn’t discourage you, lets keep going.

[A brief aside here to explain why one would want financial success: Too many people equate money with personal value; meaning, if you don’t have money you are not a good, moral, ethical, or successful person, or some such thing. I can see how many could think this but I believe that misses or overlooks a far more important point. Money is a resource. This resource can be traded for things, such as safety, health, and comfort. The more of this resource one has, the more of these benefits one has access to. To me this is the purpose of money and it’s a distinction I think many over look.]

Contrary to what you might think while at work, most people work pretty hard their entire lives. Most people also don’t have shit to show for it. Soooo, hard work isn’t the answer? Nope, not entirely. Like I said, most people do actually work hard (ish) most of their lives. So, why doesn’t this pay off?

Aside from luck and all the other social determinantes of health (and wealth), I believe the vast majority of the heavy lifting for wealth accumulation comes from daily choices. Specifically I mean choices made focusing on long-term goals. Most people are absolutely horrible at focusing on the long-term. I don’t mean six months long-term. I don’t mean five years long-term. I’m talking decades-long time frames.

In our twenties we’re broke as a joke and usually dumb as a box of rocks. I do however strongly believe our twenties are for playing; doing stupid shit that nearly lands us in jail or costs us an eye or a limb, nearly. Those are fun days! But they are usually not very productive days.

Wealth accumulation, if it’s going to happen, takes decades and our twenties are one decade down where we don’t get much accomplished. It doesn’t have to all be dumb and dangerous though. Often there’s a degree or two earned, a trade school graduation, or perhaps a small business start-up. Regardless, this is all still entry level stuff typically with several start-overs, which also slows things down. Unfortunately achieving financial security takes a long time but the earlier one starts the better their chances.

Starting as early as possible and planning for when you are 60 or 70 is an excellent foundation for wealth accumulation. Now here comes the really hard part; consistently making more good long-term choices over short-term instant gratification. Ouch! This is where it usually falls apart for most people.

But, let’s imagine someone does everything “right” (finacially speaking) or at least productive, along with a very common busy life there is still a lot that needs to happen. This person does what’s needed to get a secure good paying job. They start investing early. They get married (MW, WW, MM, WWM, MMW, XYZ, LMNOP, etc) in their late twenties or early thirties (and doesn’t get divorced). They have a couple kids. They buy a house. They typically need a couple reliable vehicles. We’re in a two income household right? All of this takes time, a great deal of time. When everything goes “right” it takes a good twenty or thirty years to pay for all of this, and invest at the same time.

This alone however doesn’t ensure wealth. Throughout these two or three decades our hypothetical person still has to invest, a lot. The bulk of those investments have to pay off well too, after all there will be failures. Active and passive incomes need to be maximized, side hustles pursued diligently, and so on. Then they must resist pulling significant money out for frivolous upgrades to their home and such. Additionally we still have to pay for the kid’s college, and there is that one vacation, or whatever seems to become a short-term priority.

Spending habbits have an enormous impact on wealth success rates. As my grandfather used to say “It doesn’t matter how much you make, it’s how much you save.”

Ok, we’ve checked all the boxes over the past thirty years. We have financial security now right? Well, maybe. Some do, many still don’t. This is a difficult game to play but I believe it’s absolutely worth playing to the best of our abilities. Why?

Without getting into too much detail, I interact with a lot of seniors, and others. Many have done fairly well. But, then unexpectedly along comes a health or other life set back. These people are not broke so they do not qualify for state aid. But they didn’t do well enough to have adequate resources to pay for what they now desperately need. This is where the anger, dispair, and decline usually starts.

Should one instead just go for the broke state aid method instead? From what I’ve seen, absolutely not. That is clearly a far worse path.

Sorry, there is no rainbow at the end of this story. Life is hard, and often unfair. Many just give up, or don’t try very hard, or don’t even realize they should have been trying hard in the first place. With some luck you’ll be strong, fit, and healthy until the day you check out. It would be nice if we could all be so lucky.

Short story long, it takes a long time to generate any kind of wealth and even then it may not happen or be enough. Most will do ‘fine’ and get by well enough. But, as I said at the beginning, you’re probably going to be at least 40 before you hit ‘fine.’ Good luck to us all!

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