This post may contain affiliate links and we may get paid a small commission if you click on a link. Please read our disclosure.
How To Become Financially Independent In Your 30s – Ad | This is a paid partnership with Experian
What is your North Star goal?
You know, that one immovable goal that often seems so far away and near impossible to achieve.
For an increasing number of people, one of such goals is to how to become Financially independent.
And for an even larger group of people, it remains a great fantasy that will never happen.
And that’s partly because much of the writing on this stuff focuses a lot on what I like to call the bit above the iceberg.
What I mean here is, not thinking about this beyond simple maths.
I’m guilty of this to some extent during media interviews as they usually just want you to offer e.g. “top 5 tips” etc.
In some ways, this is probably not a terrible thing because it gets people interested in the subject.
However, one risks living forever in buzzland and never actually taking the steps to make this goal real.
Becoming Financially Independent at any age is phenomenal.
Doing it in your 30s though requires not just knowledge but understanding at a fairly young-ish age.
When I think of how to become Financially Independent and the many mistakes we made on the journey, the image that comes to mind is this:
It’s one that I hope you’ll remember whenever you hear someone talking about this subject.
We did not fully appreciate what we were getting ourselves into.
The bit above and beneath the iceberg are both important.
However, you need to hit play on the bit beneath the iceberg for the bit above to manifest.
Each one of these could probably have an entire blog post dedicated to it.
So I won’t attempt to cover these in one article.
However, there are 3 specific learnings from our journey that I’d like us to focus on as we go beneath the surface.
I’m focusing on those in their 30s because it’s usually when people:
- Get married or get into a long term relationship,
- Buy a home probably with a big mortgage,
- Have children or get pressured to,
- Compete to advance in their careers,
- Want to escape and travel the world,
- Accumulate expenses thanks to the love of things and experiences,
- Realise they’re at the beginnings of the great rat race.
But this group still have a lot of hope because they’re starting to build their networks and potentially net worths.
Those in their 40s are typically just past the mid-life crisis and in some ways start to believe it’s too late.
So they give up and continue down the path of the ordinary life.
This is ofcourse a big mistake because, in my view, every age group has a unique advantage if they search and identify it.
Those in their 30s though, face the big squeeze. Pressure from all angles.
Pressure to provide at home, perform at work, make a good income, build a career etc.
The struggles are real and I faced them too, except I had other ideas.
I knew that this is a race that many will run, get weary but have no choice but to keep running.
For me, this was one of the greatest motivations for seeking a way out.
This leads me to the very first point on how to become Financially Independent.
Understand Your Why
If you look at the drawing above, you’ll notice that the one word I highlight is your ‘why’.
To me, this ranks far above all the other things and there specific reasons for this.
The point at which one realises they are now in the slow lane of the ordinary life usually comes because of some memorable event.
I like to call these, the ‘point of no return events’.
Can you think of specific moments in your life when something happened, which either changed your outlook? desire? Or intensified your frustrations?
Often times, we never want to remember such events. We hide from them or just want to forget about them.
What I’ve learned is that you need these specific points of no return events to fuel your desire to become Financially independent.
Let me give you a specific example:
I used to have a boss years ago that I absolutely
hated disliked. In many ways, I was frustrated and misunderstood.
This individual also stood in the way of my progress. One day, whilst out at lunch in a park, it dawned on me…
This is it.
I’m stuck here and I can’t move. And even if I do, I’ll likely meet other such people who have little minds and nothing more.
I needed a way out. Not just out of the job, but a way not to rely on any job for my day to day existence.
This forced me to get out there and seek those that were living the life that I craved.
If only I could find it, I could learn and through that, come up with a plan to break free from this ordinary life.
This fueled a huge desire that I would often see as a large burning fire. This to me in many ways represented hope.
It meant that if I could find that way out, I won’t need to “do whatever it takes” to climb up the career ladder.
I would have beat them at the game and found another way of doing life.
In time, I realised later that my thoughts were leading me towards the idea of Life Design.
Could I really imagine the type of life I wanted and create it?
My desire was strong and it was real.
I had stacks of these reasons WHY becoming Financially independent made sense for ME.
It was no longer a “thing” that I would like to achieve, but something I MUST achieve.
Whenever I looked at my catalogue of “point of no return events”, I grew hungry and pushed myself further to go against the grain.
Taking steps each and every day helped me to grow in my belief that I could really do this.
To the outside world, I carried on doing life as normal. But deep within, I was steering a boat in another direction, little by little. Day by day.
Your why carries a lot of power! You have to identify and own it because the road ahead is tough.
This is so that when the wind blows and the storm comes (and it will!), you will stand firm.
No one will truly understand this but you.
This is why the journey to Financial Independence is a deeply personal one in many ways.
Forget about the buzz and noise. This is not about travelling the world!
When that door closes and you go to bed at night and think of your life situation, only you will truly know how bright or dark it looks.
Do you want to continue running the great rat race? Or do you want a way out too? Only you can truly decide.
Don’t get me wrong, I believe work is important and has great purpose.
But I really believe it’s important to do work you love or find fulfilment in.
One of my other great motivations for choosing this journey was to really be a blessing to others.
This particular point grew on me as time passed.
It might sound corny but those who think beyond themselves will understand this is a higher calling.
You don’t have to be Financially Independent to be generous.
However, it certainly helps especially if you’re more in control of what you do with your time.
Understanding your why clearly will help you build a great foundation from the beginning.
The best time to start the journey is really in your 20s, although starting today is the next best thing.
Whether you’re in your 30s, 40s, 50s, it is never too late!
And the reason for this is because everyone’s circumstances are so different, although you’re at an advantage starting early.
I was fortunate to have started at the age of 25 and gradually built up the momentum.
One of my best tips here is to start having quality conversations.
These could either be with your partner or with friends who are open-minded.
I love having these face to face and sharing dreams.
There is something special about speaking out your dreams and gradually calling into the physical world.
Quality conversations also open our minds up to bigger ideas and the difficult questions.
You can start having these at no cost, and I can guarantee you that they will be transformational.
Related post: 10 Game-changing Money Moves To Make In Your 30s
Be Deliberate About Where To Live
One of the biggest mistakes I’ve seen people make is around the decision about where to live long term.
What typically happens is:
Two people meet and fall in love. This becomes their new obsession.
They decide they want to be together long term. Share dreams and possibly have a family one day.
Most decide to get married and ofcourse have that expensive wedding. Afterall, it is a once in a lifetime opportunity.
The next natural thing is a choice of where to call home.
This is where building the credit file and knowing one’s credit score with the likes of Experian matters.
In all the excitement, the two people add their gross annual incomes together and set off to buy the best house they can.
This might be in a major city like London or even in specific postcodes. Or it might be a big house outside a major city.
They max out on the multiples of their joint incomes and borrow the heck out of their lives.
Saddled with debt, they begin a new life and in come the babies.
At which point, one of the two decides they want to stay at home and raise kids, whilst the pressure piles on the other.
Then the realisation comes. “I have a 30-year overwhelming mortgage and I can’t just get rid of it!”
Worst still, I will be working for a very long time before I see any material change to that balance.
Some people are so embarrassed by the sheer size of their mortgage that they just can’t talk about it.
You see, the big mistake was already made.
Borrowing a lot of money for the house you’ll call home is a bad idea.
It’s a dead asset in many ways partly because you can’t touch any value in it.
It will stick out like a sore thumb on your networth unless you come up with a plan to pay off your mortgage early.
My point here is this –
Don’t be too emotional about where you choose to live long term.
Just make sure it makes financial sense and leaves you much room to breathe.
This way, when the reality hits you, you could at least talk about it.
The journey to Financial Independence is a long one. Don’t be fooled by anyone who attempts to make any of this sound easy.
We’ve only just scraped the surface and gone a little beneath.
It isn’t just about saving money and investing it. The bits beneath the surface are often discounted and forgotten.
Whether you’re in your 30s, 40s, 50s, it is never too late to get started. And remember, this goal is about the journey.
So any step towards achieving it will leave you in a better place financially in all scenarios.
- Self-awareness: The Must-have Ingredient For Financial Independence
- How To Start Building Passive Income For Financial Independence
- 21 Passive Income Ideas For A Freedom Lifestyle
- The One Way To Fast Track Your Financial Independence
- To Break Free, You Must Fight The Resistance
- How To Improve A Poor Credit Score To 800+ For Good
What’s stopping you from setting off on the journey to becoming Financially Independent?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy
Hey Ken. I like what you said about not being emotional about buying a house because it is a very emotive thing – this house buying stuff. We weave our hearts and minds into finding the perfect house – almost like finding a lover. And we are left with this HUGE price tag at the end. I love love me some house but I happen to hate debt just a little bit more. With the prices in the UK, I wonder what constitutes a reasonably priced house?
Ken Okoroafor says
Obsessions with finding the perfect house is costly. I recall when we wanted to buy a house, I knew there is no way we’d tick all the boxes. Mary wanted a big kitchen with an island and I wanted a study, off road parking and proximity to a station.
Whilst we eventually got most of what we wanted, it was just by luck! We bought in 2012 when prices were no where near as high as they are now (although fallen in parts) and we just happened to have found a house with an extension but at a very good price.
As for what constitutes a reasonably priced house – I did not want to pay more than £250k! I know… this is nothing in London speak. We could have bought at 2 times that at least. But I just imagined this mountain of debt dragging me down all the time.
We ended up paying not too much over £300k and I was very content with that as the goal was always to take on as little debt as possible and then overpay monthly.
I’d probably say a reasonably priced house is about £320k assuming a 3bed within the M25. This is not based on any data! More on what I would be willing to pay assuming there is enough to justify that price and expected future growth in value etc. I’d expect the UK average would be a fair bit less.
Interested to know what you or others think.
A reasonably priced house is one that you can easily afford would be my answer. When my partner and I each sold our individual houses and bought one together we made sure that the mortgage could be covered by one of our salaries. Looking back that was very sensible as my partner was made redundant a couple of years after we bought the house. Fortunately because we didn’t have a big mortgage we can still afford to overpay even though it is only my salary covering it. One thing on our side is that we live in Wales, which is cheap compared to the south east of England. It may have been a different matter if we had had to buy a house in London.
The home is larger than we need but after some much needed decoration I am hoping to host Airbnb guests which should bring in some extra money and make it pay for itself.
Ken Okoroafor says
Sam, this is brilliant! You’re in a really fortunate place to be able to overpay even on one salary! Hosting Airbnb sounds cool too.
Out of interest, how do salaries compare between someone doing your job in Wales vs London?
This comment really resonated with me:
“To the outside world, I carried on doing life as normal. But deep within, I was steering a boat in another direction, little by little. Day by day.”
Some people do not understand when you speak to them about your goals. Others just dont care, but when you find someone that does… its an immediate connection.
Ken Okoroafor says
Ryan, you hit the nail on the head there! Some people will never understand your goals. Or plainly, some people have a hard time accepting or supporting your goals. Especially friends, strangely!