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[@alux] Levels of Financial Goals You Need to Reach By Every Age

· 6 min read
[@alux] Summarizer
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@alux - "Levels of Financial Goals You Need to Reach By Every Age"

Link: https://youtu.be/SlP7XWbYMsI

Short Summary​

This YouTube video outlines a 7-stage sequence of financial goals tied to age, emphasizing that building wealth requires following a specific order. The video details the key objectives for each stage, from learning to live below your means in your early 20s to securing a financial legacy in your 60s and beyond, while also highlighting common pitfalls at each level.

Key Quotes​

Here are four quotes from the video transcript that represent valuable insights:

  1. "You have to be the person who delays the show and builds the system. Because if you can learn to live well below your means at this level, you can make smart choices before life forces you to. You'll be ahead of 90% of people your age. Not just financially, but mentally, too." (Focuses on delayed gratification and its compounding benefits.)

  2. "Credit cards and short-term loans aren't just expensive, they're exhausting. They drain your energy, your confidence, and your future income. Getting rid of them gives you breathing room." (Highlights the holistic impact of debt beyond just the financial burden.)

  3. "Inflation doesn't wait for anybody. Okay? Every year you sit on cash, you lose ground. So, you have to stay uncomfortable in a productive way. Keep learning, keep investing, and keep building some income streams that don't need you to clock in." (Emphasizes the importance of continually deploying capital and generating passive income to combat inflation.)

  4. "At this level, the focus shifts from building toward freedom to living with it in mind every single day. And it doesn't even feel like you're undoing the work that you've built up over decades. It's the opposite. It feels like you're taking another big step forward." (Highlights how simplifying life can have a positive impact.)

Detailed Summary​

Here is a detailed summary of the YouTube video transcript, presented in bullet points:

Key Topic: Financial Planning and Wealth Building by Age/Life Stage

  • The video outlines a sequence of financial goals people should aim to achieve at different stages of their lives to build wealth effectively.
  • It emphasizes that achieving the right goals at the wrong time can be detrimental.
  • The Alux app is promoted as a tool to accelerate financial goal achievement.

Level 1: Age 18-22 - Living Below Your Means

  • Focus: Survival, independence, and learning financial control.
  • Key Actions:
    • Save 10% of all income.
    • Build an emergency fund of $500-$1,000 in a high-yield savings account.
    • Track every dollar spent.
    • Say no to lifestyle inflation.
  • Pitfalls: The temptation to display wealth prematurely, instead of building a financial foundation.
  • Benefits: Learning to live below your means provides a significant advantage, both financially and mentally.

Level 2: Age 22-28 - Eliminating Bad Debt and Building a Financial Buffer

  • Focus: Building a financial foundation and protection from financial problems.
  • Key Actions:
    • Eliminate high-interest debt (credit cards, store accounts, payday loans).
    • Dedicate at least 20% of income to debt repayment.
    • Contribute 10% of income to a retirement fund.
    • Build a financial buffer of 3-6 months of living expenses.
    • Continue living below your means.
  • Pitfalls: Falling into the trap of credit cards and short-term loans to keep up appearances.
  • Benefits: A financial buffer provides options and protects against bad luck, job instability, and forced decisions.

Level 3: Age 28-35 - Buying Your First Property

  • Focus: Long-term ownership and wealth building.
  • Key Actions:
    • Continue building emergency fund.
    • Invest 15% of income in index funds or ETFs.
    • Save 20-30% for a property down payment.
    • Prepare financially and research the market 2-3 years before buying.
    • Lower/eliminate high-interest debt and build a solid credit score.
  • Considerations:
    • Understand true affordability, not just what the bank offers.
    • Thoroughly research neighborhoods and property prices.
    • Accept that the first property might not be perfect.
  • Benefits: Owning property is a foundation that nobody can take away.

Level 4: Age 38-44 - Getting a Secondary Property and Investing More Aggressively

  • Focus: Growth, consistency, and long-term financial control.
  • Key Actions:
    • Consider a temporary freelance/consulting gig to boost savings.
    • Strategically plan for a second property (rental or future residence).
    • Run the numbers and ensure the property strengthens your financial position.
    • Systematically invest 15-20% of income monthly.
    • Maximize retirement contributions.
  • Pitfalls: Becoming too comfortable and not putting money to work.
  • Benefits: Solid funds, consistent returns, and building a portfolio that will pay you whether you're working or not. Discipline pays more than effort.

Level 5: Age 44-55 - Building Wealth, Not Just Security

  • Focus: Building lasting wealth beyond oneself.
  • Key Actions:
    • Pay off a large portion of the mortgage (aim for full payoff in 5-10 years).
    • Invest in a second property as a rental or asset.
    • Save and invest 15-20% of income in diversified assets.
    • Focus on long-term cash flow, not just appreciation.
  • Benefits: Gives you the choice to retire when you want, not when you have to.

Level 6: Age 50-60 - Transition to Financial Freedom

  • Focus: Living with freedom in mind every day.
  • Key Actions:
    • Fully fund all retirement accounts.
    • Simplify life by eliminating unnecessary expenses.
    • Prioritize financial freedom over big bets and risks.
  • Benefits: Gives you the option to stop working without panic, to say yes or no to something without even needing to check your bank balance.

Level 7: Age 60+ - Securing Your Legacy

  • Focus: Ensuring the work put in carries through to the next generations.
  • Key Actions:
    • Focus on estate planning, setting up trusts, and updating wills.
    • Structure assets to avoid burdens for future generations.
    • Teach children and grandchildren about money management.
    • Focus on impact through scholarships, mentoring, and supporting causes.
  • Pitfalls: Believing the work is already done; poor estate planning can jeopardize everything.

Bonus: The Trap of Stopping Too Early

  • Pitfalls: Many people stop working towards financial goals after reaching a significant milestone.
  • Key Actions: Don't slow down just because the first big win is behind you. Use that big win as fuel. Keep investing, learning, earning, and protecting what you've built.