The younger you are, the less wealth you will have. The older you are, the more wealth you should have. These statements are typical but by all means, do not reflect reality. Many have fallen under the typical/average achievements for their age group and many have vastly outperformed. Your age is not really a reliable indication for your achievements.
How many super rich kids have you seen in the news lately? Mark Zuckerberg of Facebook fame. Janene of Boost Juice fame. Anita Roddick of the Bodyshop fame (guess she's not young anymore but she was once, young, rich and famous), the Olsen twins by their MaryKateandAshley brand. Young and rich and totally talented. There's many more out there but not as prominent in the news and they don't necessarily flash their wealth around.
But for every super rich kid out there...there's also millions of dirt poor, overloaded with debt and struggling kid out there - not to mention the high income but big spender types who put themselves into the struggling category merely by ignorance or poor money habits. What applies to the young, also applies to the old. But, mind you, the overall differentiating factor that distinguishes between the young and old, is that the young have time on their side. Time to fix the errors of their way. Time to let the power of compounding work for them. Time is something the older population lacks.
But I'm digressing from the subject of this post. Your age and your wealth. Your age is an important determinant with regards to what you invest in, save for and spend on. This is due to the different financial demands that life throws to us as we age. As an illustration, someone in their 60's does not usually have the same financial issues and expenses as someone in their thirties - marriage costs, mortgages and children. Whereas those in their 60's are mainly concerned with retirement planning and investing in superannuation - subjects that bore the twenty something year olds to tears.
By mismatching your investment focus with your age group, you may be potentially leading yourself into a black hole or at least a stressed and worried state. It's a shame that a financial education is something that is really under rated. Even with a financial education, it leads you no where if you don't apply what you've learnt.
So here are the six categories I present to you:
1) Under Twenties.
2) Twenty Somethings.
3) Thirty Somethings.
4) Forty Somethings.
5) Fifty Somethings.
6) Sixty Somethings and beyond.
My next few posts will focus on each age category, outline what the major expenses are for each particular age groups and then what each age group will ideally need to start preparing and investing in.
Don't be a victim of a poor investment mismatch to your age. If you're young and haven't yet married or had kids but you will eventually (either single or with a partner) then you don't want to lock all your spare money up in superannuation where you can't access it until you're in your sixties and retired.
Similarly, if you're in your fifties, sixties and beyond...last thing you want is to be geared(borrowing) to the maximum and 100% invested in high risk asset classes (shares & real estate). Yes I know that you realise you won't have enough to retire and you're trying to play catch up. But by throwing all your savings for a last ditch effort before retiring reeks of desperation and makes you vulnerable. You only have to see the ravages of the Global Financial Crisis (GFC) to see what I meant by this comment.
Anyhow, the next few posts will outline the six categories I mentioned above.