How To Build Wealth in Your 40s

Are you wondering how to build wealth in your 40s, even if you haven’t started yet? Are you panicking a little inside that, maybe, you’ve left it too late? And now you are agonizing to find out how much savings you “should” have in your 40s.

Because…

…. what if you haven’t got enough?

Rest assured.

It’s not too late to build wealth in your 40s even if you haven’t started yet if you know where to look.

So,

if you’re a 40-something stay-at-home mom without huge savings or a retirement plan I know that this post will be helpful to you.

Because in this post I’ll share with you 13 realistic baby steps you can take to start building wealth today. Even if you currently only have little money or savings you can start now. And in this post, I show you how.

I am 39 years of age when writing this post. But next month, I’ll be turning 40. 40! My life has just crept up on me it seems, and now I’m in my 40s as a stay-at-home mom without huge savings or a retirement plan. And it stings.

According to a survey by the Transamerica Center for Retirement Studies, the average American in their 40s has $63,000 saved. 

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So, how do you build wealth in your 40s when you don’t have a stash of cash saved or diversified your income streams, you aren’t rolling in investments, and have a pile of debt to pay down?

I want to show you how you can still build wealth for yourself, even when you’re 40-something without much money!

Because the truth is…

… you can build wealth with these untold ways I am about to share with you.

But before we start I need to add a disclaimer that I am not a personal finance expert or financial advisor. I am simply a full-time stay-at-home mom and this post is my research about the options that I want to share with you. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances. AnyMommyCanMakeMoney is not liable for any loss caused, arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.

I hope you’ll find this article helpful and inspiring. And just know that it’s not too late to start building wealth now. Join my email list for more tips on how to make money as a stay-at-home mom.

How much should I have saved at 40?

And, as a rule of thumb, as a 40-something you should have saved 2 times your annual salary. So for example, if you’re making $50,000 a year then you should have saved $100,000.

If that scares you, because you’re in no way near, then you’re not alone. It scares me too. 

But the best thing you can do to turn your finances towards wealth-building is by making a financial plan.

Make a plan

The first thing you need to do to build wealth is to make a financial plan. But don’t worry, this isn’t as complicated as it sounds.

In your financial plan you write down your current money situation, how much have you got saved or in assets, what’s your long-term goal and how are you planning to get there.

For example:

Savings: You’ve got $20,000 saved.

Assets: You’ve got $10,000 in assets.

Financial goal: You want to have $ 1 million by the age of 50.

Strategy: You’re planning to get there by starting a money-making blog and investing your money.

Your financial plan is not set in stone. That means you can adapt your plan as your circumstances change.

No matter what your financial situation looks like now, it is possible to build wealth if you know exactly which areas to focus on.

The next steps are designed to help you reach your wealth-building goal.

Increase your income

Obviously, the more money you’ve got coming in, or money in savings, or disposable income, the more you can put towards your retirement savings or invest.

Therefore the first thing you should do to build wealth is to increase your income.

Grab my FREE guide below.

Below, I’ll show you some realistic ways to do that.

Work as a Virtual Assistant

The fastest way to increase your income is to work as a Virtual Assistant. There is a HUGE demand for Virtual Assistants and you can offer services you’re already an expert in. Plus you get to work from home and can create your own schedule that works around your family life and kids. My friend Megan, for example, works as a Pinterest Virtual Assistant and makes an average of $5,000-$7,000/mo. 

Create passive income streams

One of the best ways to build wealth is to build a passive income stream that, over time, brings in consistent money for the work you did up front.

Here are 5 different passive income ideas you can try.

• Blogging: If you have stories to share in a profitable niche then maybe you should think about starting a blog. Starting a blog will take dedication, time, and a lot of work upfront. But if you’re doing everything right it can well become a steady passive income source for you. Michelle makes $50,000/mo with affiliate marketing from her blog.
• Printables: The best way to make extra money is with a side hustle like creating printables. Mom Julie makes $1000/mo from selling Printables online.
• Start an Etsy shop: Starting an Etsy shop doesn’t require you to be crafty. In fact, some of Etsy’s top sellers are not selling physical products altogether. Check out the 10 Best Things To Sell on Etsy and Make Money (Without Making Anything Crafty). 
• Buy real estate: If you can get your hands on a piece of property then this is a great way to earn passive income by renting it out.
• Invest your money: Investing is also a great passive way to make income as part of a long-term investing strategy. If you’re investing your money in stocks over the next 10 to 20 years then you can simply set and forget about it. More on that later.

But before you start building wealth it’s probably a good idea to pay off your debt first.

Pay down your debt

According to CNBC, the average American has $135,841 in debt.

Debt prevents you from building wealth.

Whether you’re drowning in student loan debt or credit card debt, now is the time to tackle it. Single mom Kumiko was facing $77,000 debt thanks to her unhealthy spending habits. In her book, she shares simple worksheets and strategies she used to pay it off in less than 12 months.

Personal finance expert Robin Saks Frankel and writer for Forbes Advisors explains the difference between the debt snowball and the debt avalanche, two methods to help you get out of debt.

Start an Emergency Fund

What is an emergency fund and why do you need one?

An emergency fund is, like the name suggests, the money you put aside in case of unexpected emergency expenses. This could be your washing machine breaking,  your laptop, or an unforeseen family trip home overseas.

As a general rule of thumb, aim to set 3 – 6 month expenditures aside to cover emergency events. Single mom Kumiko from My Money My Way suggests aiming for a minimum of $3,000. However, if you feel like you need more, go for it! The emergency fund is there to make you feel safe for events you can’t control.

What is an emergency and what isn’t an emergency?

Ideally, you’re not supposed to withdraw money from your emergency fund, unless it is an emergency. That means the money you’re saving into your ER fund needs to be money you’re able to part with, without ripping holes in your budget at the end of each month.

Start building your emergency fund by having an automatic deposit made to your emergency fund every time you receive a paycheck.

A budget can help shed light on your finances and help you figure out realistically how much you can contribute to your ER fund comfortably each month.

Learn how to budget

Don’t skip this! Learning how to budget will not only help you build wealth but also keep it.

With a budget, you’ll see exactly HOW MUCH money is coming IN, HOW MUCH is going OUT to cover your expenses, and most importantly, HOW MUCH you have LEFT to build your wealth with.

Because if you don’t know how much money you have comfortably left before your next paycheck, then do you know how much you can invest to build your wealth?

Exactly!

You wouldn’t.

That’s why you need this life-changing book written by a single mom who went from $77,000 in debt to pay for her house in cash. Because this book will help you turn your finances around. It certainly worked for me and now I am now obsessed with budgeting and I even started a retirement and an emergency fund.

When your budget tells you that you have money left over, then you have options to invest it.

Invest your money

Investing your money is a really smart move to not only diversify your income but also generate additional income on your investment years down the line.

The best thing is…

… you don’t need to know anything about investing to get started.

There are great apps out there that round up your cash and build your investment portfolio this way. 

The one I’m using is called Raiz. Raiz is a micro-investing app that invests my round-up cash into ETFs (Exchange Traded Funds) in Australia. I simply link my bank account and the app will round up my transactions and use them to invest them in my portfolio.

For example, let’s say I paid $87.11 for my groceries. Raiz then rounds the amount up and invests $0.89 in EFTs. These types of apps are great for you if you want to try investing without taking too many risks.

If you join using this link, we will both get $5 when you use my invite code.

Or, if you’re in America, check out Acorns.

Retirement fund

When you’re turning 40, it feels like retirement is suddenly just around the corner. 

Right?

If you’re an employee in the US you’re most likely contributing to a 401(k). The great thing about this 401(k) is that the employer matches your contribution. 

However, how do you save for retirement if you, like me, don’t have an employer? The answer is you save into an Individual Retirement Account (IRA) or better, a Roth IRA account.

Let’s take a look.

Roth IRA

A Roth IRA is an Individual Retirement Account that offers tax-free growth and tax-free withdrawals in retirement.

That means you can withdraw money from your Roth IRA account tax-free when you’re retired. But a Roth IRA is intended as part of a long-term savings strategy. That means you should only start it when you can comfortably pay enough money into it monthly.

Cut living expenses

What are the things you REALLY need? And where can you cut back?

• Get a better quote on your health insurance and save money every month.
• Save money on your groceries and use the $5 Meal Plan to get delicious meals for you and your family weekly sent to your inbox. They offer a free 14-day trial.
• Remortgage your property.

A budget will show you which living expenses to cut back so that you have more left towards your goal of building wealth.

Get Life insurance

Life insurance is a great way to build wealth because the entire death benefit is passed on to the beneficiary (most likely your kids) income tax-free! For example, if your life insurance pays out $500,000 then that money goes directly to your dependants without getting taxed.

I know you don’t want to think about it, and neither do I. But at any stage of life, anything can happen. Planning for the worst-case scenario is not going to be an easy one, but getting a good life insurance policy will ensure that your little ones are covered for big expenses.

Get a financial advisor

Did you think financial advisors are only for the rich and wealthy? The good news is, that you don’t have to have a slew of wealth or all your finances in order before getting a financial advisor. 

What does a financial advisor do? 

A financial advisor helps you with financial planning to achieve your financial goals, make financial decisions, and plan for the future. This might include advice about

• Budgeting
• Investing
• Retirement planning
• Help with your estate plan
• Insurance, and
• Taxation questions.

According to Investopedia, you can always try it on your own first, and if you don’t succeed, either try again or consider hiring a financial advisor.

Track your Net Worth

Do you know your Net Worth?

Then keep on reading.

To know where you stand on your journey to building wealth it’s a good idea that you keep track of your net worth on a regular basis. You can track it at the end of every month. If your wealth-building strategy works you should see your net wealth increase with every month.

How do you calculate your net worth?

It’s really simple.

How to calculate net worth

Grab a piece of paper or download this Net Worth Tracker printable here.

On your left, you write down everything and anything you OWN (Assets), from:

• Designer handbags
• Rental property
• New car
• Retirement accounts, and
• Saving accounts
• Cash

On the right, you write down everything that you OWE (Liabilities), like:

• Car loans
• Student loans
• Personal loans
• Mortgage debt or
• Mortgage payments, and
• Any debt or
• Credit card debts.

Then you add up your left side and the right side. Next, you want to subtract the right side from your left side. What’s left is your net worth.

Summary

To sum it up, the best way to build wealth is to:

• Start by getting clear on your finances, then
• Learn how to create a budget and
• Invest what you’ve got left.

Get this book to help you create a life-changing budget.

Because…

… if done right, your budget will give you the financial freedom you never thought possible. Get a hard copy of the book because it is full of strategies to try out, and it is a lot easier to do when you have a copy of the book in your hands. Click here to get your hard copy.

Closing thoughts on how to build wealth in your 40s

The best time to start building wealth is now! And with the right strategic moves, you can build wealth even in your 40s. This is the perfect time to think about your financial future and take baby steps toward your real goals.

Building wealth will take time and hard work and it’s definitely not a rich-quick scheme. However, you don’t need lots of money to start building wealth. So take action now with these 13 realistic baby steps and build yours, mommy!

What about you? Have you been thinking about building wealth? Have you already started? Or are you worried sick you may have missed the boat? Please leave me your comment below.

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