What advice would I give to the 30-year-old me?

Your 40s are known to be a challenging decade financially, typically balancing the demands of lifestyle costs, children and their education, ageing parents and making increased space for retirement savings. Establishing good habits in your 30s helps. Tamryn Lamb shares some advice she would give to her 30-year-old self. 

There was a time when I couldn’t have conceptualised writing an article that was framed from the perspective of someone in their 40s. It feels like just yesterday that I was finishing my studies and starting work – yet it has been over two decades. In fact, the older I get (and to be clear, I still consider myself a youngster), the more I realise how precious and perishable the concept of “enough time” is – in my personal life, for my health, for my career and, of course, for investing.

So, what would I tell the 30-year-old me? In no particular order:

1. Take some risks

You likely have, at least, a 30-year accumulation period ahead of you, most of which will hopefully be in some form of gainful employment – self-directed or more formal. You can afford to take risks and make a few mistakes. This includes taking on an appropriate level of “good debt”, for example to get onto the property ladder. You probably don’t need to worry too much about market cycles as most (not all) wash out over 30 years. 

2. Work out early what your investing behavioural biases are

Most people start to save in earnest in their 30s. Yes, we know we should start in our 20s – but not everyone is in that position. Before you figure out how to invest, with who, and in what product and investment – it is a good idea to identify your behavioural weaknesses. Does your stomach drop when you see a decline on your statement? Do you overestimate your ability to pick that great idea? Do you worry when your friends tell you about an idea, and you think you might be missing out? Work out what will hold you back from making the right decisions, and then try to put mechanisms in place to “protect you from yourself”. 

3. Don’t let your lifestyle increase at the same rate as your earnings

This is a hard one. Combining my studies, and my training contract at an accounting firm, I lived like a student for over eight years. When I got my first real pay cheque, I felt like a glucose-intolerant kid in the proverbial candy store. While this is probably to be expected, it’s important to take control of your budget early on and try not to let your spending habits increase at the same rate as your earnings. Your retirement pot will thank you. 

4. Don’t succumb to inertia or the excuse of “I don’t have time to sort out my admin”

Life is busy. Most people in their 30s are juggling a job, starting a family, managing their extended family, etc. There can be times when months go by and you realise you haven’t sorted out that tax-free investment for your child or upped your contribution rate. Don’t succumb to that excuse. Treat each important, non-urgent decision as if you were retiring in three months, not three decades. 

Continue reading: https://www.allangray.co.za/latest-insights/personal-investing/what-advice-would-i-give-to-the-30-year-old-me/ 

August 03 2020 By Tamryn Lamb - allangray.co.za Personal Investing