Most personal finance-related topics only focus on young adults and those in retirement. Hardly will you find content that appeals to those who are in the middle of the age spectrum. They are not just starting out life, and they are not retired or close to retirement yet. These are people in their 30s and 40s.
This article will appeal mainly to men and women that have been significantly marginalised. We speak of individuals in their middle age.
People in their middle-age are at the peak of their careers. They are just attaining the apex of their financial life. This explains why it is essential for them to know how to manage their finances. There is a lot they can still gain. Also there is a lot they can lose should they make the wrong financial decisions.
If you fall within this category of people, you will find this guide resourceful. We will share tips on how to manage your finances. Because of the peculiarity of the age spectrum, we have taken professional pieces of advice from Farnoosh Torabi. She is a financial expert and author. She has featured on several occasions on radio and television programs relating to personal finances.
Know your worth–and add 50%
Farnoosh advised that middle-aged men and women who are professionals should place a value on themselves. They must be aware of their worth based on the skill they possess. Also, she advised that they should add 20, 30, or even 50% on top of it.
As a professional, you may have years of experience that is valuable than the skills you have. Your experience can help companies save money, time and human resources.
Here’s what she has to say about this:
Some older mentors advised me early on that the fact you’re being asked to do a job says quite a bit about your “worth.” Yes, there is a going “rate” for the mechanics of the work, and the market does dictate value to an extent. But your unique skills, reputation and track record are the value add, making the final product or service you’re providing all the more desirable and competitive.
My advice: Know your day rate or market rate and tack on 20, 30 or 50%. By 40, assuming you’ve been climbing in your profession for 15 or more years, you’re worth it.
I could hold off for a few years until my kids are in school full-time and I’m no longer spending as much on childcare. But I’m not going to wait to contribute more to retirement. Having maxed out all my tax-deferred savings options, I’ve begun investing more in a brokerage account to supplement savings.
Ramp up retirement
You may have heard that nothing lasts forever. When you are at the peak of earning years, always remember that you earn like that forever. Sooner or later, your earnings will depreciate, and it won’t be long before you start approaching retirement. When everything is booming well in your career, that’s the time to start making moves.
Prepare for your retirement. Invest money to create wealth when you aren’t actively working anymore. You should try to save three times your salary by 40 years old.
I could hold off for a few years until my kids are in school full-time and I’m no longer spending as much on childcare. But I’m not going to wait to contribute more to retirement. Having maxed out all my tax-deferred savings options, I’ve begun investing more in a brokerage account to supplement savings.
Invest in alternatives
There is no better time to invest than when you are in your 30s to 40s. At this stage, you can make investments that will translate into a consistent money scheme for you even when you are retired.
You should have a working plan. This plan must be able to support you as you enter your retirement age. It could be your savings or a series of investments that you had dabbled in when you were still young. This is the time to take calculated risks. Invest in start-up companies.
Learn a new skill or upskill further
I’m entirely aware of the enormous risks, but I find supporting artists and founders very fulfilling. And I want my 40s to be defined by doing more of what I want and enjoy, rather than what’s always “practical.”
My friend Karen Rinaldi, author of It’s Great to Suck at Something, would say I’m on the money. She took up surfing in her 40s and, despite many falls has stuck with it. That’s the point. “It took me five years to even catch a wave,” she told me. “But what kept me going back was … I thought, ‘This is the one thing in my life…that I don’t have to be good at.’ There was so much freedom in that.”
It is also essential that you do insurance. As you invest in other things to make more money, little insurance can help you live a good life after retirement. You can do life, car, health and other insurances. They will help you save money when you are retired.
Mikka Montero, chief editor of the project All The Best Loans PH, notes that the main benefit of life insurance is your confidence in your family’s well-being in any situation.
Properly planned insurance will give your spouse the financial support he or she needs to pay hospital bills, pay off debts, and cover your children’s education.
