“I feel like I may be missing some higher leverage investment opportunities”: I have a strong financial foundation but not sure how to maximize my saving potential. How can I make the most of my income and investments in my 20’s?

Hi Money Minder,

So, here’s the deal. I’m a 21-year-old single guy who’s got my financial game on lock. I’m making some decent cash, like around 150k a year (projected to hit 200k by the end of the year). I’m putting a grand a month into retirement savings (sitting at 35k right now), spending half my income, and splitting the rest between a high yield savings account and a brokerage account (currently at 90k combined). Oh, and I just bought a small business that’ll start bringing in $100k a year in profit in 2026.

But here’s the thing – I feel like I could be doing more with my money. Like, I think I’m missing out on some killer investment opportunities. I want to know if I’m spending too much and not saving enough to really maximize my income potential. So, what’s a good balance between spending and saving to get the most out of my money? And what other investment strategies should I be looking into now and in the future?

Help a dude out, Money Minder!

Cheers,

Financially Curious Pup

Response from THE MONEY MINDER:

Hello There,

Congratulations on achieving such a strong financial position at such a young age! It’s clear that you have worked hard to build a solid foundation for your future. It’s great to hear that you are proactively investing in retirement accounts and have a good balance between spending, savings, and investments. It’s also fantastic that you have bought a small business with exciting profit potential in the coming years.

In terms of maximizing your saving potential, it would be advisable to consider adjusting your spending habits to ensure you are saving enough for both short-term goals and long-term financial security. A good recommended split between spending and savings could be the 50/30/20 rule, where 50% of your income goes towards essentials, 30% towards lifestyle choices, and 20% towards savings, including retirement accounts, emergency funds, and other investments. You could reassess your budget and potentially increase the percentage going towards savings to take full advantage of your income.

As for other investment paths to explore, considering your current financial standing and future projections, you may want to look into diversifying your investment portfolio. This could involve investing in real estate, mutual funds, exchange-traded funds, or even consulting with a financial advisor to tailor a strategy that aligns with your goals. Given your high income and strong financial position, you have the opportunity to explore various investment options that can help grow your wealth over time.

Overall, it’s evident that you are on the right track with your financial planning and investment choices. By fine-tuning your spending habits to prioritize savings and exploring diverse investment paths, you can further optimize your financial growth and secure a prosperous future. All the best from THE MONEY MINDER as you continue on your journey towards financial success.