Your 30s can be a key time of your life to set yourself up financially. The 20s is the best time to learn and do formal education whilst your 30s and 40s is the time to earn.
It’s probably a good idea to sort out your first home first but after that it’s time to accelerate your wealth-building with shares.
Even investing a few thousand dollars a year can compound into huge sums over time.
If you’re aiming for the typical retirement age of 65 then you have around 30 years to build up your money.
You can do incredible things with shares in just 10 years, so 20 and 30 years could generate great things.
If the global share market continues its long-term average of 10% or more per annum then the Vanguard MSCI Index International Shares ETF (ASX: VGS) could be an excellent lazy choice to compound wealth. This ETF contains some of the best global companies like Apple, Amazon, Samsung and Berkshire Hathaway.
You might decide you want to go for a diverse, yet specific idea. For example, BETANASDAQ ETF UNITS (ASX: NDQ) gives investors exposure to just the best tech companies listed in America. Its top holdings are Apple, Alphabet (Google), Amazon, Facebook and so on.
I believe it’s important to avoid investing in shares that barely grow. Businesses that pay out most of their profit each year don’t leave much for re-investing. That’s why I think younger people should generally avoid investing in Australian index products because the biggest companies don’t have good growth prospects. That’s why I avoid things like Vanguard Australian Share ETF (ASX: VAS) and Australian Foundation Investment Co. Ltd. (ASX: AFI).