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Investing in Your 30s or 40s


If you're in your 30s or 40s in Australia right now, there's a high chance you're pretty settled in your career. If you haven't purchased your first property yet, you're probably saving for a deposit. The next few years will play a massive role in your financial future and building wealth now could set you up for middle age and retirement.

To find out more about the good choices we should be making, we spoke to FinancePath managing director Mark Attard. Here, he shares his insights into the financial challenges and opportunities you may face in your 30s and 40s, with some practical real estate advice thrown in for good measure.

If you're in your 30s or 40s...

Weddings, babies, cars, your first home — a lot is going on in your 30s, and you may think you have plenty of time to think about your retirement plan later. Mark's advice? Now is the time to take care of your financial wellness and hit some financial goals. "As life goes on, more expenditure comes along, and it doesn't get any easier," he says.

Develop an interest in the matters concerning your money, and find a reliable, trustworthy source of advice. Putting some extra care into your budgeting, being generous with your savings accounts and superannuation, and cutting up the credit card will all go a long way to helping you build wealth.

By the time you hit your 40s, you may have a growing family and start worrying about the suitability of your existing home. With a considerable amount of money and hard work going into school fees, vehicles, mortgages and other expenses, you may be tempted to put it off.

But with even less time to take care of your financial wellness, Mark says ignoring your finances and overspending is a common mistake for those in their 40s. To avoid it, keep those trusted financial planners and advisors close and try not to defer tough investment decisions. Above all, don't forget about your most important investment: your own knowledge and financial wellbeing.

If you're buying your first property...

After years of shared living in less favourable conditions, be it with family or flat mates, you're probably sick of compromise. Having done a few laps around the sun, you have a clearer idea about what you want in a home and where you want to live. The question now is, "What can I afford?".

The good news is that whether you're buying an investment property to rent out, or a home to live in, you should be able to find an investment option that meets your needs. "There's always a solution if you understand what's in your scope and have discipline," he says.

If you're buying your second property...

A common scenario for people in their 40s is to have one property already and start thinking about buying another. If that's you, you may be wondering whether you could buy a second property, and still hold on to your old one. Mark says that it all comes down to your financial situation — your cash flow, income streams and repayments — and whether this purchase is predominantly a financial or lifestyle decision.

If lifestyle is a priority for you right now, and you want to build your dream home, Mark says selling your old property to achieve that could be the right call. "Get the house you really want," he says. "Selling up will give you more cash, and you can always buy another investment property."

If you see your second property as your next rung on the property ladder, consider whether the home you bought first will be a valuable long-term investment with strong capital growth and rental returns. Often this decision will be influenced by how much debt you have on the property and possible tax implications. If you decided to sell “You could take the cash, have a lower home loan and then use the equity from their new Metricon home to buy another place." That way, you get your dream home and still have a property portfolio.

If you're wondering whether to buy something new or established...

You may be wondering whether you're better off building something new or buying an established home to live in or renovate. Knockdown Rebuilds, for example, are popular because they help homebuyers get what they want, where they want. But especially if it's your first home, Mark says there are considerable advantages to opting for a house and land package, especially in a developing Australian market.

"If you're buying established, you might have broader choices, but you won't get the stamp duty discounts you get on house and land deals, where you only pay stamp duty on the land, or you don't pay at all if you're a first home buyer," he says. "There are several grants and benefits associated with building new. The biggest trade-off is probably location."

Not there yet? If you're trying to escape the rent trap, Mark has more advice for you here. You can also read more about knockdown rebuilds and house and land packages on our blog, Home Truths.

If you are thinking about building, Metricon offers a range of solutions, including homes designed specifically for first home buyers. For more advice, get in touch with a team member today.

While we've tried to be as helpful as possible, this article should not be taken as professional financial advice. It contains general information only, and you should seek out independent, professional advice before making any financial decisions.