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Where should you be financially at age 40?

I dislike the word “should;” I’ve banned it from my house. “Where should I be financially at age 40 (or 30, or 50, or 60)?” is just like “Can I afford it?” – neither question has an answer without richer context.

Let’s work on context.

Step 1: Make a wish list.

(This isn’t my wish list – just throwing out a few things I’ve heard from coaching clients and blog readers. I’ll share mine in a bit.)

By age 40, I want:

  • to have no consumer debt.
  • a nicer, bigger home.
  • $50,000 for each of my kids in a college fund.
  • to be saving X% of my income for retirement.
  • to have spent a month in Europe.
  • to have my house paid off.

Make your own list; don’t worry about judging individual wants. Write down everything that comes to mind, then move on to step 2.

Step 2: Imagine failure.

For each of the wants on your list, create a failure statement using the age in question:

“If I have consumer debt when I’m 40, I will feel _____________ .”

“If I’m not in a nicer, bigger home by age 40, I will feel ____________ .”

“If I don’t have $50,000 in college funds for each of my kids by age 40, I will feel ______________ .”

The key here is to let each imagined failure roll around your head until it feels real. Work hard to mentally experience the loss of the wish list item, then fill in the blank.

What you’re hoping to discover is how much each wish actually means to you.

You might realize that having a bigger, nicer home is crucial to your happiness. Or you’ll admit the desire for a bigger home stems only from your need to “keep up.” Either could be true.

Work through each item on your wish list, estimating the gravity of the imagined failure. The heavier the imagined loss, the more important the goal.

Step 3: Dig into why failure would hurt so much (or not).

Of course, you’d want to take the exercise a step further and ask why each imagined loss feels significant (or not). Look for an authentic reason it would hurt so badly to (for example) be driving the same old clunker at age 40. If you can’t decipher a solid “why,” you’re probably overstating the pain of the imagined loss.

Once a want has survived the gauntlet of “how would I feel if I failed” and “why would I feel that way,” it either goes in the trash or goes onto the Official List of Goals to Be Accomplished by [insert age].

Having qualified for the Official List, each wish progresses to my favorite question:


Oh, and here’s my “by 40” list (I’m a couple of months from 35):

By 40, I hope to still be doing work I enjoy within biking distance of my home. I want to be earning double my current income and saving (for retirement) at least 30 cents of every dollar I earn. I hope to have no debt other than my mortgage and several months’ worth of expenses as an emergency fund.

If all those came true, I’d be a very happy camper.


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Where should you be financially at age 40?