George Kamel - A Step-By-Step Guide to Building Wealth in Your 30s

Episode Date: November 27, 2024

💵 Start your free budget today. Download the EveryDollar app!  I hate to break it to you, but it’s hard to truly be “thirty, flirty and thriving” when you still have debt weighing you down. That’s why in this episode, you’ll get a step-by-step guide for building wealth in your 30s.  Next Step:   📗 Order George Kamel’s new book, Breaking Free From Broke, now 20% off for Ramsey’s Black Friday sale.   Connect With Our Sponsors:  🔒 Get 20% off when you join DeleteMe.  💸 Learn more about opening a high-yield savings account with Laurel Road.  📱 Visit Tello for more details.  Explore More From Ramsey Network:  🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💡 The Rachel Cruze Show  💼 The Ken Coleman Show  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

If you're in your 30s, you've probably realized two things by now. One, instant ramen has its consequences. And two, it's time to get serious about building wealth. But even if your student loan balance is still pretty scary, getting control of your money doesn't have to be. It's totally doable, and you're about to get a step-by-step guide to building wealth in your 30s so that by the time of your 40, you're sitting on top of a sizable nest egg, Scrooge McDuck style.

But before we dive in, hit those like and subscribe buttons like the good millennial that you are. And if you're not a millennial, hit them anyways, because you've got to keep tabs on what we're up to. Okay, we are really set in the trends these days that we stole from Gen Z that are already out of style. The first step towards wealth building in your 30s is to stop using debt. Stop it.

And if you have consumer debt, whether it's credit cards, car loans, or what you still owe clarnah on that 40-ounce maca cream Stanley Quencher, drop it like a hot potato, man. Because the more debt you have, the more you're playing ketchup instead of actively getting ahead.

I mean, paying crazy interest on a big, dumb cup you bought last year sounds like a big dumb decision. Especially considering you left it to Ashley's birthday get together four months ago and she swear she can't find it. I swear, I look everywhere. I don't sound like that. Bottom line, if you're in your 30s and you still have non-mortgage debt, you've been stuck in the cycle for too long. Some of y'all have had student loans for so long, they're starting to get moldy. You can't throw them away. You got to pay it. But I hear stories every day of people who just decided they were done with debt, they got to work paying it off,

and it typically took them less than 24 months to do it. When I was getting out of debt, I used the debt snowball method, and that's what I personally recommend for anyone trying to get out of So here's how it works. You list out your debts from smallest to largest balance, and you throw as much as you can at the smallest debt while making minimum payments on the rest. Once you knock out that little debt, you free up a payment, and you can roll up that payment plus the extra you're throwing onto the next debt. And as the snowball rolls, you gain momentum and you get out of debt so fast. And before you comment... Well, George, it makes more mathematical sense to pay off the highest interest first. Listen, debt is not a math problem, Brainiac. It's a behavior problem.

And what the debt snowball does is it targets your psychology and your behavior. to get you debt-free faster. The next step is not the most exciting part of wealth building, but it's crucial. Kind of like brushing your teeth. Few people are thrilled by it, but you're happy to do it to avoid gingeritis, halitosis, and tooth decay. I'm talking about budgeting. Listen, if you want to take control of your money, you can't manage what you don't measure. Dang, that's good. That's good.

That's how Tony Robbins feels every single day of his life. Your identity is defined by who you believe you are and who you believe you are not. You see, tracking your expenses with the budget shows you exactly where your money's going so you can stop wondering where it all went. When you know you're spending less than you make, you finally have this beautiful thing called margin. And you don't need to be an Excel prodigy or an accounting savant to do a budget. I personally use a budgeting app called Every Dollar that helps keep it simple using a zero-based

budget system where every dollar I earn has a job. Income minus expenses equals zero. I'm going to drop a link down below in the description if you want to go check it out for free. The next step is to get yourself a financial parachute. I'm talking about an emergency fund, because if you're old enough to have back pain from just sleeping, not that I would know anything about that. There it is. Oh, put them up. Put them up. Who hit me? And you're old enough to know that sometimes in life it rains. And sometimes when it rains, it catastrophically floods, leaving waterlog couch cushions floating around your apartment at best and wiping out all of

humanity at worst. Shout out to my man Noah. He saw it coming. Haders down. And let's face it, you're also old enough that mommy and daddy probably shouldn't be bailing you out anymore like they did in your 20s. But good news for you, an emergency fund can and will bail you out. You should aim to have three to six months of expenses saved for emergencies, and you want to keep it liquid, meaning you can access it fast. Where should you store it? I recommend keeping it in high-yield savings account like the one from Laurel Road, a sponsor of today's episode. How's that for a transition? You see, with a high-yield savings account from Laurel Road, you can earn way more interest than a traditional savings account,

because they offer rates over 4% without any bogus maintenance fees. But wait, there is more. No minimum balance required to open an account, and your deposits are FDIC insured so you can rest easy. So go make the most of your savings by going to Laurelroad.com slash George or click the link in the description to get started. And while I'm recommending awesome things, let's throw saving on your cell phone plan into the mix.

And lucky for you, my friends at Telo are committed to helping people save the big bucks over the big name service providers. Plus, they offer more data for prices as low as $5. or just 25 bucks for unlimited everything. Did I mention their plans are flexible, meaning no contracts you pretend to read just hoping everything works out. So go check them out, tello.com slash George, and you'll get an extra five bucks off the unlimited data plan for your first month of service.

Or you can always click the link in the description below. Okay, back to being 30 and taking steps. The next step is something that if you're out of debt and have an emergency fund, you should have started doing yesterday. And that's investing for your future. And by future, I mean the 65-year-old version of yourself that's risking it to go no hands on the Dumbo ride with your grandkids at Disney World. And yes, even though retirement might still be decades away,

you've got to start investing for it ASAP. For the record, I'm not talking to Wolf of Wall Street investing here. I'm talking about investing in ye old tried and true 401k or Roth IRA. And fun fact for you, the boring old 401K is the number one wealth-building tool for millionaires out there based on actual data. Now, why is it so important to start investing ASAP? Two words. Compound growth.

You see, compound growth is when your money, makes you more money. So the principle plus the interest, then gains more interest. That principle plus the interest plus the interest, then gains even more interest. That's compound growth. And the secret sauce to compound growth is time, which coincidentally, also the secret ingredient to my titsa's literal secret sauce, got to let those flavors simmer. So time plus a little cumin for good measure. That sounds delicious. So let's walk through this. Let me show you the power of compound growth. If you waited until you were 50 to start investing, and you invested $700 a month until you invested $700 a month you retire at 65, you'd have $290,000 to live on in retirement, assuming a 10% rate of return.

If you retire at 65 and you live to 80, you'd only have $19,000 to live on per year, plus what you get from Social Security, which you and I both know is chump change. Now let me give you a different picture. What if you started investing $700 a month 20 years earlier at the ripe age of 30? Well, that would give you $2.6 million by the time you reach $65, which would give you a heck a lot of trips to Magic Kingdom, plus an amazing legacy to leave your family. go. Start investing as soon as you can. How much do you invest? Well, once you're debt free with a fully funded emergency fund, invest 15% of your income into tax advantage retirement accounts to get the

most bang for your buck. Next step you need to do in your 30s is to start saving for your kids college if you got them. And if you don't have them, shout out to the grandma is trying to set you up with that nice bank teller named Eric. He seems swell. Little disclaimer here. Saving for college should come after paying off your debt, saving for emergencies, and investing that 15%. You got to put your own mask on first, FAA regulation. Don't mess with them. Because here's the deal. Your child may or may not go to college and may or may not graduate. But there's a hundred percent chance that you will have to retire one day. So trust the steps. Do them in order. Once you've gotten your own finances in order, you begin investing. You figure out how much

you need to save for college. I recommend saving using a tax favored plan like a 529 college savings account or an ESA, education savings account. Now if your kid is popping zits already, you'll need to save more money faster versus when your kid's younger and they still pronounce it Biscetti. I still pronounce it Biscetti. Stop talking, baby talking. You're grown, man. But if you can start this account as soon as your kid is born, you're going to be way ahead of the game and have way more time for compound growth to work its magic.

All right, this next step applies to homeowners and maybe future homeowners. If you don't own a home yet, I'd encourage you to keep working these steps, because once you're debt-free with an emergency fund, you're in a great position financially to pursue homeownership. But if you already have a home, the next step is to get serious about paying it off early. And before you click ahead to the next step, hear me out for a second. being mortgage-free a pretty awesome feeling, it's going to help you build even more wealth in the long run. And that's because ditching your house payment leaves you with a ton of extra money every single

month to throw away your other financial goals, like having a ball of retirement or building an at-home three-person sauna if that's what you're into. Why three-person? Still none of my business. And I'm telling you, wealthy people don't hang on to their mortgage, not even for the low interest rate and especially not for a stupid tax deduction. In fact, the average millionaire pays off their house in just 10.2 years, and I'm one of them. I did it way sooner because I wanted to be financially free in my 30s. So we got really aggressive, got a big down payment on that first town home, and we paid it off in 26 months, leaving us with tons of margin to build wealth. The last thing you need to do is say no to lifestyle creep. Just because you're making more doesn't mean you need to spend more.

So if you were surviving on 50,000 last year and you're now making 60,000, that's awesome. But what if instead of upgrading and getting monthly facials, you just pretend like you still make 50,000 and you do something like? like invest the difference. Wild idea. So just do the sugar scrubs at home and keep driving that old Camry and keep living your same lifestyle. You don't need the new car smell. You need the I just invested an extra 10 grand a year smell. So if you want to build wealth in your 30s, it's all about taking the right steps, in the right order, and being intentional with your money. It's that simple and it's that hard. Pay off your debt, invest early, and stay in control of your spending. Plus, whether you're 30 or 22 or 52, it's never too late or too early to do this stuff.

But the earlier you take action, the faster you'll see results. Trust me, I'm I'm speaking from experience here. I took these steps before I was in my 30s, when I was just a sad, in-dead, cardigan-wearing social media marketer in my 20s. And these steps are what allowed me to reach a million-dollar net worth by the time I was in my early 30s.

And you can find out exactly how I did it in my book, Breaking Free from Broke, which you can get right now for 20% off during the Ramsey Black Friday sale. So if you make it in time, good on you. I'll drop a link in the description, or you can go to Ramsey Solutions.com slash store to check it out.

Thanks for watching. We'll see you next time.