It's game time.
You can play around when you're younger and put off saving for the future (though it is not recommended). If you get to your 40s, though, and you don't have a comfortable amount saved, it's time to get serious.
Sure, you've got expenses. But your own retirement is on the horizon. The good news? You've still got about 20 years to make it happen.
The way to get there is investing.
Eric Bowie, 48, a government employee in Kansas City, Missouri, had a lightbulb moment in his 20s when he was a teacher. A financial salesman came to the school to offer services to the staff.
He showed Bowie a chart illustrating the impact of compound interest on investments, and Bowie was blown away.
"When I first learned about compound interest, I felt like I had learned a secret no one else knew," Bowie said. "Not my friends, my family.
"It was almost like a miracle," he added. "Money could grow like that?"
At that time, he was contributing to a mandatory teacher's pension but no other retirement plan. The force of compound interest lit a fire under him.
Bowie spent a lot of time studying the tables and scouting how his money would do. When he stopped teaching, he had around $30,000 accumulated. He saw that if he simply kept contributing steadily over the next 30 years, he'd have about $700,000 or $800,000 — an idea he found very appealing.
When he started his job as a federal employee, he transferred the balance into the government Thrift Savings Plan. Over the next 17 years, he contributed up to the match almost every year. The account now is in the six figures.
He credits constant, steady contributions — always enough to get the match — alongside careful spending and, of course, the power of compound interest.
Bowie and his wife always buy cars using cash. They have very little debt. To save on interest, they switched to a 15-year mortgage.
In addition to his government job, Bowie owns rental real estate properties, runs an eBay store and does some voice-over work. He also credits the simple magic of spending less as a powerful tool, which he compares to getting a raise. He has a personal finance blog where he writes about side hustling and money motivation.
"I think I'm a very regular guy, but I look at money very differently than most people," Bowie said.
The real key to successful investing is not making brilliant investing decisions, says David Schneider, a certified financial planner and founder of Schneider Wealth Strategies in New York.
In fact, it's about avoiding mistakes such as failing to diversify your investments or being seduced by fads. "If it's hot, and everyone is talking about it, there's a good chance it won't look so good in a few years," Schneider said. "For every Apple, Amazon and Google, there are a million small, speculative companies that ended up going nowhere."
Rob Grass, 43, says you can win in the stock market if you do the opposite of what he's done. He is partly joking, but he did make a few mistakes when he started investing about a year ago.
"I just went into everything blind," said Grass, who lives in Windsor, Ontario, and makes structural steel tubing.
Grass invested in cannabis stocks just after legalization in Canada, but says he was late to the party on the marijuana sector.
Then, he was interested in investing in BlackBerry, so he went to his bank, which handles investments, rather than a brokerage house, to ask them to purchase the stock for him. When he wanted to buy, the price was $9.18 per share, but the bank didn't move on it right away. By the time they made the trade, the stock had risen to around $15.
A good starting point for beginning investors is a total stock market index fund, or even a global stock market index fund that will capture the returns of the whole world. "They are usually available in a 401(k), or you can buy them on your own through any brokerage firm," Schneider said.
Attitude is key, says Jordan Sowhangar, a CFP and wealth advisor at Girard, an investment manager in Souderton, Pennsylvania. "It should be the exact opposite of what it might have been in your 20s and 30s," Sowhangar said.
Think of your 40s as halftime. "You need to evaluate the first half, see what worked and what to tweak to win this game," Sowhangar said. "Have a game plan — a true financial plan — in place."
It's time to set goals. You might like to have your mortgage paid off by age 50. This could allow you to save more aggressively and retire by 60 instead of 65.
The financial plan holds you accountable, Sowhangar says. You might also consider working with a financial advisor.
It's a good time to start scouting how your retirement finances might look: Tax-free withdrawals in retirement are always welcome. Saving in a Roth individual retirement account makes sense for people in their 20s and 30s, Sowhangar says, but that doesn't mean post-tax retirement savings is off the table when you're in your 40s.
If income limits mean you can't contribute to a Roth IRA, consider the Roth 401(k) option if available. You've still got about 20 years for that money to grow tax-free.
Another item for your financial laundry list: Shine a light on your 401(k) assets. You may have 401(k) plans sitting with a former employer. Bring these old plans under one roof, whether you roll them into an IRA or into a current 401(k).
Finally, check your progress. A good rule of thumb is that when you're in your 40s, you should have between two and three times your current salary saved up. "Someone at 40, I like to see them have at least two times their salary," Sowhangar said. "Through their 40s, closer to the other end, three times."
As long as you are aiming to hit the goal, you're more on track than someone who's on auto-pilot, contributing a defaulted 3% to 5% of your salary without thinking about it. "If people stick to that auto plan [set by the retirement plan] they are at risk of not getting to that target," Sowhangar said.
Daryn Duliba, 47, says he started out a naive investor but quickly learned how important it is to do your due diligence.
His first misstep was not investing when he was younger. Duliba, who is in software sales in Edmonton, Alberta, was always interested but never felt he had the money. "I spent everything I had, trying to pay the bills," he said. "In my mid-40s, I realized I want to retire someday.
"I made a conscious effort to dig in and learn, and see how I could accelerate my returns to make up for those lost years."
He put some money into cannabis stocks recommended by a co-worker as a great investment. "It's a hot sector," Duliba said. "Through dumb luck, it grew quickly.
"I saw this thing skyrocketing."
But the money didn't last.
"When you have 100% or 200% returns, you should sell," Duliba said. Instead, he continued investing in companies he learned about on Twitter. "Everything I gained through dumb luck, I wound up losing, because I didn't know what I was doing," he said. "It brought me back down to my starting point."
Next, he followed people on Twitter and invested according to their recommendations for hot stocks and penny stocks. "I didn't do so well," Duliba said.
Duliba's top advice: always be learning. "Even though I'm two or three years in, I'm still a beginner," he said. He'd like others to learn from his pitfalls.
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"Read books, listen to podcasts," he said. "The more you know, the better a job you'll do."
Another thing he'd like would-be investors to know: You need to keep your emotions in check. "It's very easy to panic and sell, and I've done that several times," Duliba said.
He'd like other investors to realize that over the decades of the stock market, you'll see ups and downs. "But ultimately it's going to continue to go up."
Chances are you're in your peak earning years. That means you can afford to funnel more cash into investing. It may mean resisting temptations like new cars, says Sowhangar. Ignore the Joneses and keep your eye on your own financial future.
"People don't generally max out their 401(k) contributions," Sowhangar said. "To get to that two to three times your salary, increase your auto[matic] contribution even by 1% a year.
"You can turn it down if it becomes detrimental to your cash flow."
At this time, you should have more stock than bond exposure. "You still have time on your side — at least 20 years to retirement," said Sowhangar. "That's plenty of time to have equities perform for you, even with a couple of recessions and some volatility."
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.