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#347 - The Best 10 Years to Build Wealth (not your 20s) · Money Grows on Trees

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  The best decade to build wealth in Australia is not your 20s.
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  Most financial content out there will tell you that if you haven't started by
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  25, you've already lost. The compound interest is everything, your
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  window's closing. But the actual Australian data says
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  something completely different to that, which is the single biggest
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  net worth jump of any decade actually happens between 35 and
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  45, when the median Australian nearly doubles their wealth. I'm
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  Lloyd J. Ross, seven-figure investor and entrepreneur. And I've helped thousands of everyday
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  Australians, Americans, New Zealanders, and Canadians get out of debt and build real wealth. And
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  in this video, in this episode, I'm going to show you why
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  35 to 40 is the real wealth decade, what your
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  20s are actually for, and the exact playbook for whichever decade you're
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  in right now. Median Australian net worth by age,
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  by the Australian Bureau of Statistics. Ready? Under the age of 25, it's
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  $28,000 net worth. Remember, net worth is assets minus liabilities.
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  25 to 29, it's 58,000. 30 to 34, it's 135,000. 35 to 39 is 250K. 40 to 44 is 380,000. 45 to 49, 480,000. And 50 to 54 is $580,000 in net worth.
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  The wealth acceleration phase peaks around 50 to 55. You're at the top of
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  the food chain in your working career. You're
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  at the very top effectively, you got all the experience, you're getting paid the
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  most. This is a huge decade or
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  certainly five year period to build wealth as well. So in your 20s, we
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  look at 25 to 35, the wealth jump is about 77,000. So a decade. a
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  decade of grinding for less than $80,000 in net worth. And
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  if you remember back to the early 20s to early 30s,
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  you might feel the same way. Like, oh, that's right, it was pretty hard to get ahead. Because
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  you're on a lower income, you're learning skills, you're still trying to figure out
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  what asset class you want to buy. And compound interest hasn't had a chance
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  to help you yet even, right? Now, is it important to start there, building
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  skills, working hard, saving, investing and so on? Yes, it is. But
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  the biggest jump on the board by far is 35 to 45. I'm
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  right in the middle of that right now, I'm 42. And
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  I can without doubt tell you that from 35 to on the
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  way to 45 now is by far the biggest jump by a
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  mile. It really is. Particularly if you've been diligently working away
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  in your 20s and 30s, it's like, whoa, there's a big jump. Because
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  you start to become the elder in
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  the tribe about all the things you know, the skills you have, the
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  network you have. the experience you have, and
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  even the assets that you had built in the past are starting to come to fruition, and you're
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  able to deploy it more aggressively with more income. So
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  that is the biggest jump is 35 to 45, right? And
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  then from 45 to 55, it's 100k jump
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  on average, so it's a little bit less, but why is it smaller? And
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  the real reason for that is just because the base is higher, that's all. So
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  you're coming from a bigger base. But if you play your cards right, 45 to
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  55 can be flipping huge, can be huge, especially
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  with assets. And there's this famous poster or
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  post that goes around about Warren Buffett. It says, you know, Warren Buffett built 90% of
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  his net worth after the age of 65, which is true. It's
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  just because the assets grew so, there's such a massive base that
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  pound for pound in terms of the money, not the percentage, but the money, it
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  grew the biggest because, you know, it was compounding. You
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  can accelerate, but the time that accelerates probably
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  the most dramatically is 35 to 45, right? The
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  gurus are selling you the decade and the worst scoreboard and calling it, you know, it's
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  everything. But the 20s is a small number. And
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  why that's the case and why it's still okay and fine is because there's
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  a low starting income. A lot of people have hex debt from university. They
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  carry personal debt. In fact, I think the statistics are
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  it's like 24K in average personal debt of
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  a Gen Zer, which is wild. Then, of course, they've got higher rent than
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  ever before. the zero capital base and
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  compounding needs capital, right? So 8% of nothing is
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  nothing and so you're really just thin in all
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  areas in your 20s and the best way to, I
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  believe that the 20s in terms of wealth building is
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  it's skill building. So like if you're spending your 20s
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  building skills, building a network and
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  knowledge, that is great wealth building. You just can't
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  see it in the numbers yet, right? But here's why 35 to
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  45 is the absolute machine decade to get after it. And
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  by the way, as you're listening to this or watching this, if you're 55 or 65 and
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  you feel like, oh, well, I missed that, please don't slip into a victim mindset
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  instantly when you watch this because you've got another 40 years of your life to live and
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  you need to get after it and stop sulking about it. I've
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  seen people in there, my dad lost everything at
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  the age of 40, everything. And he made
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  it back and then some twice over and he's 69 now. And
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  he's lived a great life. So you never want to quit or give up.
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  And I do happen to have people DM me on Instagram and people
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  in my education coaching programs, they
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  do come in at 50, 55, some 60, some more. And
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  I've got this lady, she's about, Oh, she's almost 80 and
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  she's got the mindset of a student of a young. It's amazing. She's
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  learning things And I'm like, this is great because you know, you got another 20 years
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  live potentially like what are you gonna do? You're just gonna sulk about
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  how you didn't do it in your 20s or the age of 35 to 45 like what Lloyd
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  said on your show It's not about that. I I feel like wealth building
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  is a little bit like a sport You either love the
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  sport or you don't So I think people just turn their nose
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  up at it because they think it's past them or they're too old. Oh, you know, it's too
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  old. When is it ever too old to watch a good sports game?
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  And that's how I feel like wealth building is. I'm like, even if I was down
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  and out, I just can't help but build wealth. It's just, it's a habit, it's
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  a lifestyle, it's an embodiment, it's an enjoyable process to get ahead
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  and progress. Because, you know, Tony Robbins talks about the art
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  of fulfillment and the science of achievement. And this process of building wealth is
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  the science of achievement. You've got to see yourself achieved no matter how big or small. So
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  don't count yourself out. But here's the five forces that stack
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  the decade of 35 to 45, right? Firstly, income. It's a peak, boom. And
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  I think, I believe for men, it's like 110,000 average income, 45, about
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  the 45 mark, right? So you're building up to that. So your 35 to 45 decade
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  is the step towards a higher income curve. And that's a
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  huge game changer when it comes to wealth, if you deploy it correctly and
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  don't waste it all, right? Two, skills that finally pay
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  off. So let's say you've done the, in your 20s, you've got two decades of
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  skills, you know, and all of a sudden it comes into its element.
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  It's like, okay, I've got pricing power, I've got seniority in my career, I
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  got sellable expertise and I got young people wanting to learn from me, right? And I
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  think MIT did this study and they realized that the average
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  founder of a successful startup is actually 45. So,
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  you know, and a 50-year-old founder is about twice as likely to
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  build a top company as a 30-year-old. So, like, the
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  odds are stacked in your favor. Look at that, as a 50-year-old founder. Experience
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  beats energy. That's why you want to not
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  want to count yourself down and out if you're an elder, tribal elder,
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  because experience beats energy. And there's a lot of really misguided
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  young people right now. So they're looking for leadership. Third
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  one, capital actually exists at 35. You finally have real money.
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  Like you can, oh, I can buy shares now. I can do stuff. I can buy a
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  business. I can whatever it is. You
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  still have, and you still got a long,
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  Hill, to roll the snowball down. You still have 30 years of runway ahead
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  of you, and you can deploy cash. So $380,000 at
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  40, as an example, about 8%, doubles by the time you
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  get to 60. If it's 10%, it doubles
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  every seven and a half years. So it doubles and doubles again by 60. So
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  it'll turn into like 1.2 million by then, even
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  if you add not another cent. So that's why at
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  the age of 35, if you have some cash, you must start
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  investing in some assets, either property, shares, whatever it might be. You got it.
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  Number four, leverage capacity starts to peak. So banks will
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  predominantly, because you've got a higher income and a bit of a capital base,
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  you are going to have the
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  ability to borrow more because you service better. That's the other thing.
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  Number five is tax tools open up so like you can salary sacrifice differently.
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  You can carry forward like cap gains in your super up to five years.
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  It's basically tax incentives at that age as
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  well. Now if you're a business owner too, you can set up companies and
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  consult at your expertise part time. There's tax incentives there too. But
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  in your 20s, The only
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  lever you have is time. But in 35 to 45, you've
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  got five things. You've got income, you've got the skills, done. You've got
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  capital, and you've got leverage, and you've got tax incentives. So like five levers
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  beat one, which is why your net worth amplifies
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  so much in that period. So
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  what about compounding? You've got
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  to give the early start crowd that you're not wrong about starting early,
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  without question. But it's just incomplete. 200 a
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  month, for sure, from 25 beats $200 a
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  month at 35. Everybody knows that. Because
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  time is real. Compounding requires time. But the habits
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  that you said earlier in your 20s are the most important. But here's the catch. If
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  a 25-year-old, for example, invests 200 a
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  month, that's got to assume they have $200 a month spare. right,
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  that never touches their hex or career pivots
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  or the pub. And so the data
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  is that most don't have that. That's the issue. And the
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  flip side of that is at 35, if you invest $1,500 a month, which is
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  very achievable, it ends up becoming far ahead of
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  the 25-year-old that did $200 by your 50s. So you
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  can catch up, and you have a lot more money to do that. So it's not always perfect
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  when you try and compare apples to apples. 225 or
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  1500 at 35 most people will do 1500 at 35. So there you
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  go. There's the there's the data Although don't we wish we had
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  have put more away in our 20s, but 20 year olds aren't like us
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  four-year-olds They're just not it's like when I have a lot of students ask me how can you teach my
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  kids? How can I teach me kids? I'm like kids don't give a shit about money. They don't care You
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  could sit there to your blue in the face telling them how they should start investing read that book
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  They just don't give a crap. All they care about is what color bike they're gonna buy next and
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  Like my nephew, I took him out. We started letterbox dropping. We
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  wanted some business on a dog walking side hustle. He wanted to make some money. Just
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  a quick letterbox drop. We got a couple of clients for him. It still works
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  by the way. Part of that process, I just want to teach him the habits of like
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  we have to go work to get some inquiry to make some money. I
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  said, what do you want to make money for? He said, I want to buy a new motorbike. I'm like, oh yeah. Like,
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  fine. That's what kids got to do. So kids aren't going to
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  listen to you when it comes to money. They've got to get hit around the head. That's why
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  at 35, you're like, oh my god, get my shit together. Because money
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  is not important until you don't have it. Or it's
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  not important until you're like, oh my god, I'm going to approach 60. This
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  last 20 went really fast. I'm cooked if I don't get it together now.
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  And this is where the pain starts to get more visceral. you
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  start to think about it more. That's why people go, I'm 50 now, I'm
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  going to retire in 15 years, oh my God, I need to get my shit together. And that's when they start
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  to read the books. You wish you could do it in your 20s, but most people just
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  don't, right? So be that as it may, 35 to 45 is
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  the period we're looking at. Just quickly, if you're ready to take
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  control of your finances but feel stuck on where to start, I
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  have a solution. My book, Money Buys Happiness, simplifies
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  investing and wealth building with practical steps to help you achieve financial
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  peace. Get your copy via the link in the show notes and let's get your
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  money working for you. Now back to the episode. So your 20s
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  are really designed to buy the fuel for the compounding at 35 to 45. And
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  that's when you floor it, you just accelerate, right? That's the best
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  approach. So what your 20s are for, as I said, is a full
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  process of skills, qualifications, job changes, finding
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  what you love, and you're basically setting the slope for the curb
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  that peaks at 45. So it's about
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  setting up the habits, setting up automation, learning the
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  knowledge of investing, understanding the structure you're going to do it
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  in, avoiding consumer debt, lifestyle inflation,
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  and it's where you take risks too. Risks on
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  careers. So I think back to my 20s. I left Australia
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  and worked in the Middle East. and I got arbitrage on
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  some sort of level of tax-free income for four years and my
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  living arrangements I did so it was a very low cost. So
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  I did that in my 20s and then I did a big career pivot and
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  I jumped out of a whole industry that's a guaranteed
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  income into real estate sales here and completely different
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  skill set and that was a huge risk. And it was also a financial risk
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  because you didn't know when your next paycheck was coming. I
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  did that for 7 years. So basically from the age of 23 to I would say 31, 7 to 8 years I remember working my ass off
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  and not really getting ahead. And
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  then I found a vehicle that I deployed into and then over time built
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  millions out of that. And then those skills over about a seven year
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  period, I was what, 14 years of skills, allowed me
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  to accelerate in other vehicles and bang, bang, bang. And now
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  at 42, it's just massive acceleration. And
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  that's, so that, your 20s is kind of like this incubator for
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  skills, network, know-how, experience,
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  and some money deployed. but not heaps, okay?
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  So it's an incubator. So here's the 35 to 45 playbook, right?
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  In order, one is the audit gap. So income minus spending is
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  your build rate, and at peak climb income, it's like
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  about 20 to 30% is what you wanna aim for. I know, it's like, what? How
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  do I do that with inflation? I get it, it's just an aim, it's a goal. Even
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  with a pay rise, save half before your lifestyle notices, okay?
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  So if you get a pay rise, if you can just put away half, boom, it helps that percentage go
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  up. Then kill the decade killer debt, so anything over 8-10%,
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  drop the debt, murder the credit card. And
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  then number three, max the tax leavers, right? So if
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  you are a POIG, potentially look at your superannuation and other
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  ways to generate tax savings and
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  making sure you're confirming your superiors in some sort of higher growth situation,
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  not just bonds for example. With the financial advice
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  that you need from a financial planner for deploy capital
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  like it's your job, right? So actually setting up auto investing and
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  getting that going and that's what I teach in some of my programs here like this
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  is to How you do that? What what is this all about? How do you manage your money?
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  Where do you deploy it? What are you deploying it in having understand those asset classes?
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  Okay, so at 40 you'd want to have a median of
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  about $380,000 net worth and Invest it,
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  if you can, I know. Number
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  five, use leverage deliberately in a specific way so
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  it doesn't kill you. Difficult
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  when property's falling to do that, but long-term it will help you if you don't over-cap,
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  over-leverage. That's all you gotta be mindful of. Don't kill yourself in the same process,
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  right? Number six, you gotta monetize your experience. This is what you can do, start
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  consulting, partnerships. You realize at your age,
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  you're like, actually I know stuff and all these young people need to know it. So
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  you start to consult outside your job. Everyone should
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  be doing that. It's like you're getting paid in your job to do this, why don't you
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  do it with other people outside your job, they'll pay you. Oh, I didn't think of that. Especially with
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  AI, oh God, you can do it, right? And most importantly, protect
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  the machine, okay? Protect your
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  body, protect your health, protect your ability to earn income. I have seen
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  people before where they go, oh, I'm 50, I'm gonna like just
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  to have a five years off working. I'm like, 50 to 55 especially
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  is your prime earnings years, certainly. 45 to
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  55 years. So don't have like a five-year hiatus. That's
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  the time to earn. You've got up to that point, right? You don't want
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  to kill it. And so don't coast and peak,
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  right? This is what most people are trying to do. They coast
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  and peak at the wrong time. Just a little bit more. Just a little bit more.
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  Even to 55 and then maybe, you know, so make sure you
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  capitalize on your prime earnings years. That's the trick. So here's the verdict,
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  the best 10 years without doubt, with the data to support it,
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  to build wealth for the median Australian is actually 35 to 45. The biggest
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  net worth jump, the steepest income climb, the most levers available
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  to you. So your 20s aren't worthless, they're just different. So
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  you set the income slope, you wire the habits, you take the cheap risks, you
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  pivot, you set the foundations of the future of
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  what you're gonna do. And if you're 45 plus, the acceleration phase runs
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  right through to 55. And the founder data says your odds of actually being
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  elite at that point double. The playbook doesn't compress. It should
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  just get better, right? So the
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  whole notion that you finish at 30 or 35 or 45, eh. You
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  didn't miss the boat. You didn't even miss the
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  boat at 55. You just didn't. So you can either, as I said, sulk
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  or get on with it and start building. Because what if from 55 to
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  65 you got after it, and then from 65 to 85 you just had the best life? Statistically,
• 17:40
  you're going to live to 85. Statistically. I know that you
• 17:44
  get it, but statistically you're not. Now
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  is the best time to build wealth, no matter what age you're at. But if you're in your 20s
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  listening to this, or you have a 20-year-old, they ought
• 17:56
  to be skilling up. This is the chance to
• 17:59
  skill up. And eventually, one day, all the money will come to those people
• 18:03
  who choose to skill up in their 20s. And for goodness
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  sake, if you're in your 30 to 45 period now, Put
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  some money away. Start deploying the capital. You're never going
• 18:15
  to be this well off income wise, which if
• 18:18
  that includes cutting cost to get ahead, do it. This is
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  your window. Don't lose the
• 18:24
  chance to make it happen. All right, so if you've enjoyed the episode, then go
• 18:28
  ahead and leave me a comment below. And of course, hit the subscribe button, and
• 18:31
  I'll see you in the next episode of the Money Grows on Trees podcast. Thanks for listening to
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