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How to Build Wealth at Any Age

Trips to visit grandkids, travel adventures and family celebrations at your paid-for home. That’s the kind of retirement many Americans dream about.

You don’t have to earn six figures to turn this dream into a reality. But you do have to live and plan today with that goal in mind. We’ll show you how to get started with some foundational principles that’ll set you up to build wealth no matter how old you are. Then we’ll dig into some age-specific goals so you have a financial plan for every stage of life. Ready? Let’s do this!

How to Build Wealth in 5 Steps

Here’s the deal: If you do these five commonsense things that come straight from the Bible and your grandmother, you’ll win with money and build wealth. Period. It doesn’t matter if you’re 25 or 52—these truths are foundational and constant at any age.

Depending on how much a person makes and the challenges they’ll face in life, it might take some folks longer than others. But the fact is, you will get there if you do these five things over and over again. Ready? Here are the five steps to building wealth:

1. Have a Written Plan for Your Money (Aka a Budget)

No one “accidentally” wins at anything—and you are not the exception! If you want to build wealth, you have to plan for it. And that’s exactly what a budget is—it’s just a written plan for your money.

You have to sit down at the start of each month and give every dollar an assignment—and then stick to it. When our team completed The National Study of Millionaires, we found that 93% of millionaires said they stick to the budgets they create. Ninety-three percent! Getting on a budget is the foundation of any wealth-building plan.

2. Get Out (and Stay Out) of Debt

Let’s get one thing straight: The only “good debt” is paid-off debt. Your most powerful wealth-building tool is your income. And when you spend your whole life sending loan payments to banks and credit card companies, you end up with less money to save and invest for your future. It’s time to break the cycle!

Trying to save and invest while you’re still in debt is like running a marathon with your feet chained together. That’s dumb with a capital D! Get debt out of your life first. Then you can start thinking about building wealth.

3. Live on Less Than You Make

Proverbs 21:20 says that in the house of the wise are stores of choice food and oil, but a foolish man devours all he has. Translation? Wealthy people don’t blow all their money on stupid stuff. The myth that all millionaires live lavish lifestyles with Ferraris in their garage and lobster dinners every night is just that—a foolish myth. 

Here’s the truth: 94% of the millionaires we studied said they live on less than they make. The typical millionaire has never carried a credit card balance in their entire lives, spends $200 or less on restaurants each month, and still shops with coupons—even after reaching millionaire status! So ask yourself: Do you want to act rich or actually become rich? The choice is yours.

4. Save for Retirement

According to The National Study of Millionaires, 3 out of 4 millionaires (75%) said regular, consistent investing over a long period of time is the reason for their success. They don’t get distracted by market swings, trendy stocks or get-rich-quick schemes—they actually save money and invest.


How much will you need for retirement? Find out with this free tool!

Being debt-free and having money in the bank to cover emergencies gives you the foundation you need to start saving for retirement. Once you get to that point, invest 15% of your gross income in retirement accounts like a 401(k) and Roth IRA. When you do that month after month, decade after decade, you know what you’ll have in your nest egg? Money. Lots of it!

5. Be Outrageously Generous

Don’t miss this, y’all. At the end of the day, true financial peace is having the freedom to live and give like no one else. When you write a plan for your money, get rid of debt, live on less than you make, and start investing for the future, you can be as generous as you want to be and help change the world around you.

But when you make giving part of your life, it doesn’t just change those around you—it changes you. Studies have shown over and over again that generosity leads to more happiness, contentment and a better quality of life.1 You can’t put a price tag on that!

Want to learn more? Dave's bestselling book Baby Steps Millionaires will show you the proven path millions of Americans have taken to become millionaires—and how you can become one too! Order your copy today to learn how to bust through the barriers preventing you from becoming a millionaire.

How to Build Wealth at Any Age

That’s some big-picture financial advice that works no matter how old you are or how much money you make. It’s also true that each decade of your life will have specific challenges and opportunities. So let’s break things down decade by decade to see how you can maximize your savings potential.

How to Build Wealth in Your 20s

At this stage, you’re probably fresh out of college and trying to get your career off the ground. You might be thinking, What does retirement have to do with me? A lot, actually. Because you have the most to gain when it comes to retirement. There should be no stopping you when it comes to building wealth because you have the one thing other generations don’t: a lot of time.

Here’s a scenario: Let’s say you begin investing $200 a month at age 24. But your friends, who bought new cars and took dream vacations on credit cards, delay saving for retirement until age 34 while they pay off their debt. At age 64, you’d have around $1.7 million in retirement savings. But your friends would only have $560,900. That 10-year head start makes you a million dollars richer!

If you’re in your 20s, you’ve got a great opportunity to create a solid foundation for your future. Don’t waste it!

Want to build wealth beginning in your 20s? Here’s how:

  • Steer clear of debt. If you have debt, use the debt snowball to knock it out of your life as fast as you can—student loans included. If Sallie Mae is living in your spare bedroom, kick her out ASAP.   
  • Live below your means. Just say no to things you can’t buy with cash! Overspending every month can dramatically impact your ability to save for retirement.   
  • Raise your standard of living slowly. This isn’t the time to “live it up” with huge houses or fancy cars. Paid-for clunkers and small apartment rentals will do just fine while you pay off debt and build up your emergency fund.   
  • Budget like your future depends on it—because it does. A monthly written budget gives every dollar an assignment. Budget categories include things like food, clothing, housing, bills and savings. Plus, a budget ensures you’ll have money for the things that are important to you, like fun money and retirement savings.   
  • Start early. As you can see in the example above, it doesn’t take a lot of money to build a million-dollar retirement—as long as you start early! Your goal is to invest 15% of your income for retirement. And the earlier you start, the better. That’s a wealth-building habit that’ll pay off not just in dollars, but also in opportunities for you down the road.

How to Build Wealth in Your 30s

For folks in their 30s, life is in full swing. You might have kids, a mortgage and monthly expenses that seem to eat away at your income. If you’re not careful, saving for retirement could easily take a back seat to everyday living expenses. Don’t fall for that trap!

Here’s the truth: Life never gets less expensive, and saving doesn’t get any easier from here on out. You need to stay focused and stick with your saving and investing habits.

If you’re a 30-something, consider these wise moves:

  • Watch your housing budget. If you can’t pay cash for your house, remember to spend no more than 25% of your monthly take-home pay on housing. And if you’re going to take out a mortgage, make sure it’s a 15-year fixed-rate mortgage. Don’t make the mistake of becoming house poor, especially at the expense of your retirement nest egg.   
  • Have your emergency fund securely in place. Keep 3–6 months of expenses in your emergency fund so you’ll never have to dip into your retirement fund or go back into debt when an emergency happens. And an emergency will happen eventually.   
  • Max out your retirement savings options. If your employer offers a 401(k) match, contribute up to the match—that’s free money! After that, open up a Roth IRA and max that sucker out. Your goal is to save 15% of your gross household income for retirement once you’re out of debt and have an emergency fund saved up.   
  • Save for retirement before you save for your kids’ college. Your kids may or may not go to college, but you will retire someday. So, make saving for retirement a priority over saving for college if you can’t afford to do both.

How to Build Wealth in Your 40s

A recent study reported that Generation X workers—which includes workers currently in their 40s—have saved a median of $87,000 across all their retirement accounts.2 That’s not going to cut it.

If you’re not where you should be with your retirement savings, you’re not alone. Many Americans are in the same boat. But now it’s time to get serious about your future.

Here are three ways to get back on track:

  • Know your portfolio. Meet with a financial advisor and make sure you’re investing 15% of your annual income in retirement accounts like a 401(k) or a Roth IRA. Automate your contributions if you haven’t already.  
  • Don’t borrow money from your retirement account. Raiding your 401(k) will sabotage your retirement savings, and if you lose your job and still have an outstanding 401(k) loan balance, you have to pay that money back immediately. Don’t do it! Find other ways to pay for unexpected medical bills, home improvements and college expenses.   
  • If you have a mortgage, start paying it down. If you have a $250,000 balance on a 15-year fixed-rate mortgage with a 4% interest rate and you can pay an extra $300 each month, you could pay off your home 2 1/2 years early. The goal is to create a mortgage-free retirement as soon as you can and boost your retirement savings to make up for lost time. Check out our mortgage payoff calculator to find out how much faster you can pay off your mortgage!

How to Build Wealth in Your 50s and Beyond

According to The National Study of Millionaires, 53% of working baby boomers who aren’t currently saving for retirement have no plans to save. It’s time for boomers to wake up!

You need to take advantage of the retirement savings opportunities that come with age. If you don’t, you’ll face a financial crisis in retirement. So, if you find yourself in your 50s with little or no savings, this is the time to play some serious catch-up.

Some options include:

  • Take advantage of annual catch-up contributions. If you’re 50 or older, you can invest an additional $1,000 in your Roth IRA for a total of $7,500 each year.3 You can also invest up to $30,000 in your company’s 401(k) plan in 2023.4
  • Downsize your lifestyle. With your kids getting ready to spread their wings, go to college, and start their careers, you and your spouse will probably become empty nesters sometime in your 50s. Now might be a good opportunity to downsize your house (do you really need four bedrooms?) or look for other areas where you can cut expenses so you can put more money toward retirement.   
  • Make sure you have health insurance. The likelihood of needing medical care increases with age, so be sure to keep at least basic medical insurance coverage at all times. One major health crisis could set you back financially and delay your ability to invest more for retirement.

As you reach your late 50s, you might want to start thinking about Social Security. You can claim retirement benefits as early as age 62 or as late as 70.5 Delaying your claim will increase your monthly benefits. In most cases, we recommend taking your retirement benefits as soon as you can. Since those payments die when you die, you might as well take that money and use it or invest it so it’ll become part of your estate.

How to Build Generational Wealth (and Pass It On)

Remember, no matter how much wealth you build over the course of your life, you can’t take any of it with you when you’re gone. Like the old saying goes, “You’ll never see a U-Haul behind a hearse.”

Proverbs 13:22 (NIV) says, “A good person leaves an inheritance for their children’s children.” That means you have a responsibility to be intentional about transferring your wealth to the next generation—that’s a huge part of your legacy!

Generational wealth is all the stuff that’s passed down from one generation of a family to the next—everything from your investments and real estate to cash and anything else that has financial value. When done correctly, a smooth, thoughtful transfer of wealth can change your family tree forever. But if you don’t plan properly, you could end up causing a lot of unnecessary drama for your loved ones. The stakes are very high.  

So, how do you prepare to pass on generational wealth? Here are a few things you can do right now to make sure you pass the baton cleanly:

  • Write a will. A will is a legal document that lays out exactly who gets what after you die—and everyone over the age of 18 needs to have a will. If you don’t have a will, you need to make one as soon as possible. RamseyTrusted provider Mama Bear Legal Forms can help you create your own will online in just a few minutes. Don’t put this off! 
  • Set up an estate plan. If your net worth is more than $1 million, you might need to consult an estate planner to help make sure all your ducks are in a row.
  • Get all your important documents organized. Putting together a legacy drawer where you keep important documents your family will need if something happens to you—things like your will and estate plans, funeral instructions, account passwords and personal letters to loved ones—is one of the best things you can do for them.

Where Do I Go From Here?

Ready or not, retirement is coming. How prepared will you be when you get close to retirement? That depends on you. You have the power to take the necessary steps to secure your retirement future.

You can start moving toward your retirement dreams today by reaching out to a financial advisor. If you need help finding one, check out the SmartVestor program. It’ll connect you with up to five financial advisors in your area who can help you create a plan based on your individual needs. 

Find a SmartVestor Pro today!

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This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros. 

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