If You’re Between 32 and 48, Don’t Screw This Up

Money Guy Show

Brian and Bo explore the 'wealth window' occurring between ages 32 and 48, a period characterized by rising incomes and significant compound

Key takeaways

• The 'wealth window' (ages 32–48) is the most critical period for maximizing long-term retirement outcomes.
• Reaching the first $100,000 in liquid assets acts as a tipping point where wealth begins to snowball rapidly.

Main topics

• The Wealth Window
• Wealth Multiplier

Notable quotes

You ought to try to get to your first hundred thousand dollars like your life depended upon.

Conclusion

This episode provides a strategic roadmap for mid-career professionals

Transcript preview

Speaker 3 (0:00) You might think your 20s are the most important decade for building wealth, but in your early 30s, a wealth window opens up that's uniquely powerful, and we've Speaker 2 (0:09) never really talked about it before. But I am so excited because today, we're going to show you for the first time ever why between the ages of 32 and 48, it may be the highest ROI window of your entire financial life, and we're going to show you how to take full advantage of it. I'm Bron. He's Bo. And this is The Money Guy Show, Speaker 3 (0:30) where two financial advisors help you maximize your money in the messy middle. And with that, let's jump right in. Speaker 2 (0:42) All right, Brian, to set the stage, let's start by reviewing the wealth multiplier. And you know, if you've listened to this for any amount of time, the wealth multiplier is this idea that our money can multiply through time. And we talk all the time about how a 20-year-old that's willing to sacrifice and defer $1 today can watch that $1 turn into $88 by the time that they retire. Speaker 3 (1:06) Yeah, this is one of those things. Look, if you're in your 20s watching this, God bless you. You have the world by its tail. But I just know, if we're all being honest, and I look at the stats, most 20-somethings are broke as a joke, and they're just not saving and investing. So I wanted to create a show that allowed us to really focus in on the people that are between ages 32 to 48. Because this is a magical period. We're going to show you the analytics. on why if you miss this window, your future self is just going to be so disappointed because there's so much just true opportunity. And Bo, we actually have some numbers on this. Now look, for a 20-year-old, it's 88 times over. That's seven times what a 35-year-old has. But I don't think we can sleep on the fact that even for somebody in their mid-30s, their multiplier is still close to 13. If you take it out to somebody who's in their 50s, We have to round it up and be generous to get it to three. Speaker 2 (2:07) So Speaker 3 (2:07) there's already up a three times better for somebody in their 30s versus somebody in their 50s. You can quickly see time is your enemy and your friend. It's time to harness that for your future good. Speaker 2 (2:19) And so while we see that the wealth multiplier, it does deteriorate through time, there's still a window right there that even if you're not in your 20s, your dollars can be so, so, so powerful. We call this... the wealth window. Brian, you've already alluded to this. This is that stage of life, that area under the curve when you're between the ages of 32 years old and 48 years old. And what we're going to show you today is why when it comes to wealth building, when it comes to building for the future, in our opinion, this is the highest ROI window in your entire financial life. And you do not want to miss out on Speaker 3 (2:56) it. The whole purpose of this show is to get you motivated. If I don't... get people to take action on this show, I have failed as a creator because that's what the educator, the heart that I want people to know is you got to do something. I want to give you some context so we can go ahead and frame this conversation, Bo. I want to show the average contribution rate by generation. And if you look at this, look at Gen Z, this is the youngsters, seven and a half percent. Now, look, we've already said when you're in your 20s, you're broke as a joke. Millennials. 9%. Gen Xers, that's my generation, 10.5%. Baby boomers, 12.2%. Why do you think all of a sudden as people get older, their savings rate all of a sudden starts going up? They catch retirement religion because I think that they realize, holy cow, I am actually going to need money in the future to save. But here, let me go ahead and tell you some sad facts. We all play around with the artificial intelligence. I was playing around with mine and I said, hey, For the median U.S. American, what do they have at 65 in retirement assets? Speaker 2 (4:00) And Speaker 3 (4:01) it said it's just under $200,000. I said, okay, let's go a little further. When do you cross $100,000 as an American? And what I found was, is according to my artificial agent that was giving me, pulling data out there, it said in the late 40s is when most Americans. cross into $100,000. So Speaker 2 (4:24) the median American doesn't actually hit $100,000 in liquid assets until they're in their late 40s. And I Speaker 3 (4:30) just told you that the wealth window that we're going to be talking about today is 32 to 48, because let me go ahead and tell you the cold, harsh reality is also. When do most millionaires cross into seven-figure status? It's 48 years of age. Do you see the compare and contrast difference? You have one path where the average American, the typical American, doesn't even cross into six figures, $100,000, until they're like 48 years of age. Meanwhile, the financial mutant that actually started doing something while they were in their 30s, because we know that's when the typical person figures this out, is in their early 30s. They will have a million dollars. And it's all because of this wealth window that we're going to be covering today. Speaker 2 (5:11) So let's talk about why this window is so unique. What makes it so powerful when it comes to wealth building? Well, the very obvious one is that in this window, your earnings are likely rising. For most of us, when we're fresh out of college, fresh out of high school, anywhere between the ages of 18 and 23 years old, we're likely not earning a huge salary. We're likely... Broke is a joke for most people. But as we move through our 20s and as we move through our 30s, we actually begin to see our income increase from age 22 to age 32. This is according to the U.S. Census Bureau. Median earnings rise about 71%. And we talk about all the time on this show, the bigger your shovel is, the more margin you can create. And the more margin you create, the more money you can deploy. So if you just think about this in... Common sense mathematical terms, if you're a 22-year-old and you're earning the median average annual salary of $35,000 and you were saving 25%, you're saving about $8,750 a year, which is great. It's nothing to scoff at. But by the time you get to 32, if we see that 71 % increase in earnings, now the median earnings for a 32-year-old is $60,000. 25 % of that number. is $15,000 a year. That's almost double what you were able to save at 22. And then by the time you get to the end of this decade that your income starts to rise at 42, the median 42 will make $70,000. 25 % of that is about $17,500. As you progress through the wealth window, you're saving more and more and more if you're doing it the right way because now you have the earnings that will allow you to behave that way. Speaker 3 (6:57) Well, the earnings rising gave you the margin to actually put the money to work. Look, without a doubt, I want you saving and investing in your 20s, but I get it. I mean, you're coming out of school making $30,000 to $40,000 a year. Life is going to consume the majority of that. So that's why it's not until you've got a little traction under you and the reality, and welcome to Realville, this is when you actually have an opportunity to make the choice. then I'm going to start saving something for the future. As in this window from 32 to 48, we're going to change your life. And the second part of this is because this window is unique, is because you have still decades, literally like three decades of compounding growth. This is a magical thing. And this is what I think is the money got difference. We're actually going to share with you how valuable this window is. And I'm hoping this will change your life because every one of you who's watching this, I want you to do something because this is so important. You just have to do it. And with that, Bo, show them how powerful those early dollars are when they're putting things to work. Speaker 2 (8:05) Yeah, if you think about it, if you're a 32-year-old in the workforce, you have 33 years for your dollars to compound if you want to plan on retiring at a normal retirement age of 65. Those dollars in your 30s, while they may not be the same 88 times over dollars as a 20-year-old, they still have huge potential and a huge portion of your final portfolio. Look at this. Let's assume that you invest $340 per month every month from the age 30 all the way out to the age 65. And let's assume that you can earn a 9 % annualized rate of return. So you never... increase or change your savings rate. Well, in each one of those decades, in your 30s, in your 40s, in your 50s, you saved just a hair under $41,000. Exact same amount of money saved. But when you look at the age 65 values, those dollars that you saved in your 30s, that $41,000 you put away is now worth $619,000. $41,000 you saved in your 40s is now worth over a quarter of a million dollars. That $41,000 you saved in your 50s is worth over $100,000. If you think about the percentage of your entire retirement portfolio, the money that you saved in your 30s, in that decade, accounted for 62 % of your entire portfolio, of your entire retirement portfolio in one decade. Now, If we squeeze it down and we think about where the wealth window actually exists, age 32 to age 48, the work that you do and the