At 30, there are three things you absolutely must know. The first is that despite what your Mom told you, Santa isn’t real. Second, all that calculus your high school teachers told you would be super handy as an adult is a skill you will never use again. Finally, by 30 you need to understand the cold, hard truth about money and while you may have already come to your own conclusions on the first two realizations, you may not have on the third so let me share with you 5 money lessons everyone must know by 30!

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Lesson #1: A job stands for “Just Over Broke”

Most of us are aware of common short forms like OMG and LOL and while we use them all the time, you probably never realized that the term job should be included in this mix of acronyms. You see, I have to admit that when I was growing up, I was surrounded by people who didn’t exactly have the best perspective of the 9–5 life. Every Monday, my family members would say we’re going back to the grind and would complain that their salaries were not enough to allow for any noticeable amount of financial progression. This is when I learned that the term job was aptly referred to as being “just over broke”.

At the time, I had no idea why there was such a negative sentiment around jobs. I mean, if you were making $60,000 a year, weren’t you basically rich? Well, this is what my younger self thought but keep in mind that when I was young and my parents were paying for everything I needed, I really had no concept of the costs of day to day life. However, let me tell you that once I started working myself, the term “just over broke” hit me like a truck.

I still remember starting my first job out of my Master’s program and despite working 60 hours a week I was barely scraping by. Fortunately, I used the frustration from this time of my life to build multiple online businesses that have allowed me to sidestep the perils of a static salary but for many they will live within tight financial constraints for the entirety of their lives.

Now, chances are if you’ve already been working in your career for a while you too have had the stark realization of how hard it can be to get ahead on a salary. However, you may not have actually mentally processed why that is so let me break down the root cause of the “just over broke” model.

The world of business today is as competitive as it’s ever been. As such, employers need to squeeze out profits by both increasing revenues and decreasing costs. These costs, unfortunately, include your salary and in order to keep their profits rising every quarter, this means that companies literally have the incentive of keeping your salary as low as possible while still trying to retain you. From a business perspective, this makes total sense for them to do but for you this means never getting ahead.

Now, you may be thinking, “well I get a 3% raise every year so my salary isn’t stagnant at all!”. You keep thinking that boss. When you consider that inflation typically hovers around 2–3%, this means that while you think you’re getting a raise, when you factor in the extra 10 cents you’re paying for bread and the extra $50 you paid for that plane ticket, you truly are no further ahead.

Therefore, if any of this is news to you or you acknowledge you’re in this rut then my best advice is to give yourself your own raise. I did this through building multiple YouTube channels and doing freelance work on the side but any alternate means of making money will work. In short, be your own income hero because your job definitely won’t be.

Lesson #2: Your biggest wealth building tool is time

Perhaps the most commonly used saying in the English language is “Time is our most valuable resource” and while I agree with this statement, I also believe that most people have no idea what this truly means in the context of money.

You see, most people can rationalize what this saying means from a life perspective. It means that our time on Earth is finite and as such we must be intentional in how we use the limited time we have. For instance, maybe we should be working less and spending more time with family. Or perhaps we need to cut down our Netflix time to get in a bit more exercise every day. Finally, maybe we should have left that sour relationship months earlier because all it did was steal time away from someone who will truly make you happy. Understanding and mastering time is the real way to win in life and when it comes to money, there are two powerful ways you can use it to get ahead.

The first example of time mastery when it comes to your wealth relates to your income. If I were to attribute the one key difference between those who get ahead financially and those who struggle in financial mediocrity forever it’s how they manipulate their time to generate the most amount of income. For example, I still see people spending 4 hours on the weekend shoveling their snow or mowing their lawns giving up valuable work time to do menial chores. Now, don’t get me wrong, I used to be frugal in this way too. However, then I learned about time arbitrage and my financial life changed forever. Now, I outsource all my low-value tasks. If I can make $100 an hour working on animation projects why would I spend hours maintaining my property when I can pay someone a fraction of my hourly rate to do it instead. Understanding this one concept alone should allow you to dramatically increase your wealth in due time.

Then, there’s time in relation to compounding. You hear it all the time that you need to start investing early and this is because time is the most critical factor in the long-term investing equation. Here’s an example that illustrates this point to a tee.

If you start investing $300 a month from ages 18–27 and receive a 10% return a year, you could stop investing at 27 and have almost $2 million when you retire at 65 with just $28,800 of your own money invested.

However, if you only start investing at 28 you’d have to invest $400 a month until you’re 65 or $175,000 of your own money to get the same results as someone who started investing earlier.

As you can see, time, when it comes to how long you give your money to grow, can have significant impacts on your wealth building abilities so again if you can master time, you can master money.

Lesson #3: Income trumps everything

Since I started producing personal finance content online, I have gotten an increasing amount of family, friends and acquaintances hitting me up for financial advice. Some ask me how to save more money, some ask me how to get out of debt and some plead to me asking how they can retire as early as possible. You want to know the three words of advice I give to each and every one of them? Make more money.

You see, I used to think that I was the poster boy of proper financial management because I was diligent in my savings efforts, a habit that my parents so graciously bestowed upon me from an early age. Now, while saving is incredibly important, it’s pretty damn hard to save money when you barely make any to begin with. As I said earlier, I wasn’t exactly making it rain when I first started my career and as such even with my ironclad savings habits in place, I was struggling to put any money away.

Fast forward 5 years and now that I am making well into the six-figures, let me tell you, saving money is a breeze. In fact, I could probably be a lot more sloppy in my financial management efforts, not that I would be, and still keep more money at the end of every month. This is how powerful making more money truly is. However, if you don’t believe me then let me share with you an example of the amplification that making more money will have on your overall net worth.

Let’s say that right now you invest $500 a month and plan to do so for the next 30 years. If you receive an average 7% return, you would end up with roughly $600,000 in three decades time. However, let’s say that instead, you are making a lot more money since starting to take your income game more seriously and you now have the means to contribute $1,500 a month instead. Under the same conditions, in 30 years time you would end up with almost $2 million to your name.

So, between allowing you to save money faster, accumulate more wealth quicker or simply pay down all those pesky debts you have, making more money is the answer to nearly all your financial problems. So if you haven’t already, make sure to set your income at the top of your financial priorities from here on out.

Lesson #4: To win big, you must be early but not too early

Ask just about any guy and they will agree that being too early can lead to disappointment. Well, the same rings true in the financial world which is why by age 30, you must understand that timing plays a huge role in the amount of success you achieve.

If you know anything about the world of tech then you’ve probably heard of the 5 stages of technological adoption before. In this model, the five stages are the innovators, the early adopters, the early majority, the late majority and the laggards. Let’s use Facebook as an example. The innovators would have been the founders and the first set of students who initially used the site. You and I, who were old enough to understand social media and young enough to appreciate it, probably fell into the early majority group as we wrote incredibly embarrassing posts on each other’s walls 15 years ago. Then there are the laggards like your Aunt Pauline who is one more shared post away from being blocked by your entire family.

Now, I’m not here to give you a tech lesson but what you need to understand is that there are stages in financial adoption and you must be aware of them to win big. For instance, based on what we know now about Bitcoin, if you were an innovator then chances are you would own your own private island by now. However, at the time, cryptocurrency in general was untested and as such major investments in this new asset class had just as high of a chance of not failing as it did succeeding. As such, probably the best position to have been in was as an early adopter. You would have still gotten in way earlier than the majority of people and claimed most of the profits while significantly cutting down your risk because the asset you were investing in would have been tested to a greater degree.

This is all to say that it’s imperative that you understand the timing of the financial events you find yourself in and assess what the potential outcomes can be based on when you get involved.

ReaD also: 4 ways we lose money without realizing it

Lesson #5: If everyone is doing it, you probably shouldn’t be

“If Jimmy jumped off a bridge, would you jump off a bridge too”. This is a saying many of us have been told by our parents and while we probably didn’t realize it at the time, it has a strong relation to some of our most important financial decisions. One great example relates to investing.

In the last couple years, we have seen a ton of stocks run up in value with tons of people jumping on the bandwagon to try and get a piece of the profit pie. However, how many of those people do you think actually walked away with a nice profit? The answer, very few.

One of my favourite sayings is “when you find yourself on the side of the majority, it’s time to pause and reflect” and when it comes to investing, and most financial decisions in general, this saying is 100% true. For instance, just because you see everyone maxing out their credit cards to buy things to flex on Instagram doesn’t mean you should do the same. Or, just because everyone is buying the popular meme stock of the week doesn’t mean you should sink your hard earned money into it too. By 30, you should know better than to succumb to FOMO.

At this point, you’ve probably already felt the loss of letting your emotions take control of your financial decisions and as such should be deferring to your rational mind when managing your money going forward.

Therefore, if Jimmy jumps off a bridge, I will side with your Mom and tell you to please do not do the same!

CONTRIBUTED BY Adam Del Duca

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