What would you do if you are starting over at 40 y.o.?

[dkelley84]

I know people might castigate me for this. But then again, I might gain some insight from people who actually have invested something.

I'ma be turning 40. I don't have any savings or investments. Basically it's like I'm starting over.

Am a single dude by choice. Would personally choose bachelor hood for the rest of my life (though I might be open to have a family of my own in the future).

Working as a freelance digital marketer working from home. There are the ups and downs of clients. There are some periods where I don't have income.

I believe that my goal is to be financially free by the time I'm 50 y.o. I also want to leave something na mapapamana sa aking siblings. Would also want to have some investments and stuff.

I'd like to know from people in this subreddit about...

1. Where should I begin first?
2. What kind of steps should I take?
3. What kind of skills should I learn?

Either way, thank you for your future responses. I appreciate this subreddit.

 

[resjudicata]

@dkelley84 I'm not brilliant with money, but I have gotten myself out of a pinch quite a few times and broke out of a very bad financial situation at least thrice in my life. I'm going to chime in.

If I were starting over at 40, I'd put on the brakes at keeping up with appearances, spending on new things, giving or lending other people any money, and incurring any unnecessary expenses. If need be, I can go back to a dumbphone, forget about Facebook, Reddit, Instagram, Tiktok, and what have you. I'll sell everything I can. I'd take stock of the assets that I have left. If I didn't have savings, but then I had a home (however simple it is) and a car (however simple it is), that would affect my strategy. If I was renting, I'd immediately downgrade to the cheapest apartment I can live in. I'll probably sell my car (but that's not a decision that's set in stone). I'll check which trades I can get into, or if my current job can give me what I want. The outcomes of the above would inform my subsequent strategy.

For example: If my mental health had been impacted by COVID, but my heart and lungs and body are still great at 40, I'd seriously consider commercial diving. Magaling kasi talaga ako lumangoy, and my body is incredibly quick to get fit. I was already 31 when I thought of doing this crazy One Punch Man challenge, and I managed to pull it off. But that's me. I also don't mind working with ex-cons.

I'm also good with computers. Maybe I can do that, too. I taught myself Excel, R, QGIS, and PowerBI. SQL na lang, baka puwede na akong magsimula as an analyst. Hindi naman mahirap mag-aral ng Python. I took a look, and most of the skills are in demand abroad. Getting any experience in those here, however, is difficult without first being exploited. I'm not sure I'm going to let that happen.

I'm also a healthcare worker. Maybe I can take out a personal loan to migrate? Or raise money doing my regular job so that I can migrate on my own funds?

In my case, I chose the third option. But I am going to get certified in diving while I'm here so I can do the rest in Spain during my off days. You can turn your life around in ten years, for sure. But you would have to be very real with yourself, be willing to sacrifice, and be brutal with your choices. Assuming you are like the average Filipino male, you will likely have more yesterdays than tomorrows. It's time to make the hard choices now so you can move on with action as early as tomorrow. For now, until you get up tomorrow morning, you make peace with all the things you cannot do anymore because you decided that financial freedom at fifty is worth it.

 

[jonnybuck]

@resjudicata

Assuming you are like the average Filipino male, you will likely have more yesterdays than tomorrows. It's time to make the hard choices now so you can move on with action as early as tomorrow. For now, until you get up tomorrow morning, you make peace with all the things you cannot do anymore because you decided that financial freedom at fifty is worth it.

This. Thanks for sharing!

 

[kikikookoo]

@resjudicata "make peace with all the things you can't do anymore" very insightful, thank you!

 

[blintze]

@resjudicata This is very inspiring po

 

[123cfmlovesyou]

@resjudicata Lot's of wisdom here, friend.

Good on you for having the discipline AND fortitude to power through, and a strong mindset to keep you on that proper course.

 

[whyneedaname]

@dkelley84 It’s never too late to start, OP. It’s good to have a goal, but also manage your expectations. If it doesn’t happen at 50, then maybe it will happen at 55 or 60.

60 is retirement age but for enterprising people there is no such thing. Maybe they will slow down due to age but will always keep busy.

Set mini-goals per year to enable to reach your main goal. Have two or more income streams. Good luck!

 

[dkelley84]

@whyneedaname Thank you. I understand that I might not get the goal of financial freedom at 50 y.o. But I guess it's a way to aim at something. I know it can be impossible, but why not try to do something about it? I can still do something, right?

Also, I understand if people here would castigate me for not starting early. It's my fault that I made mistakes in my nearly 40 years of existence. People are welcome to give me their brutally honest feedback. Chances are, what they say might be able to help me out either in my mindset, habits etc.

To quote Dr. Sharon Fieldstone from Ted Lasso, "The truth will set you free. But first it will piss you off."

I'm really pissed off with myself now for all the wasted years I've used up. But I've still got some good years left in me. I believe that somehow I can learn some gems from this subreddit that can help me.

So again. I appreciate this subreddit and the people here for the knowledge and wisdom they impart.

 

[jlrhei]

@dkelley84

I'm really pissed off with myself now for all the wasted years I've used up. But I've still got some good years left in me.

I feel this so hard. I thought I got my break a few years back, but now I feel like I'm starting from scratch again, especially financially. Kaya naman, but it's a big challenge.

 

[beboidephanoi]

@dkelley84 The first thing you should focus on is your health. The last thing you want is to owe doctors money. If you can keep disease to a minimum, you will have more time to accumulate and grow wealth even if you're just starting.

Fix your diet, move more, get better sleep, touch grass. The lower your chances of seeing a doctor, the more money you'll save.

Your health is also the only thing you have complete control over. Unlike financial instruments, where highs and lows are dictated by various factors, you get to decide how healthy you want to be.

It's better to have zero health problems at 60 even with 500k savings than have a million and be bed-ridden.

 

[divinemercypilgrim]

@dkelley84 if by financially free you mean have enough money to never work again, you can use one of the retirement calculators online to figure out how much money you need to have saved up by age 50 to be able to survive til approx age 80ish (life expectancy) on your funds. Take note that you need to build in buffer spending like money for unexpected stuff (emergency repairs, medical bills, etc) and also other recurring expenses that might not be monthly but they still happen (general home upkeep & repairs, property taxes, medicines/checkups, new car every x years if you need it, etc)

check out r/personalfinance and r/bogleheads, both have an about section that’s useful for people starting from zero

Good luck OP!

 

[dkelley84]

@divinemercypilgrim Thank you po! I will check this out.

 

[mikeg1970]

@dkelley84 To me, financial freedom boils down to "generating surplus".
Can you force yourself to generate surplus?

Single income/salary? Generate surplus from there.

Salaried and with sideline? Generate surplus from there.

Business owner? Generate surplus from there.

Wherever you are at, generate surplus from there.

Have you built the discipline and the skills to generate surplus?

If not, then I agree dun sa other commenter na start with the FAQs muna.

 

[ronjn316]

@dkelley84 First is you gotta accept the hard stuff. Stop your vices. Being financially free would be the least of you priority muna. Focus on your cashflows first. Do everything in you power to increase it. Lessen expenditures. Since single ka. Thats would be easy. 40yrs old kahit mahirap should have atleast a wealth of network maski papano.

 

[shiningbrightly318]

@dkelley84 Zero savings at age 40 then want financial freedom at age 50? You'll need more than luck for that.

At that age you should have atleast have some asset or emergency fund earned (at the very least).

Investment needs time. The earlier the better. Yours need magic.

Please read FAQs first.

 

[dkelley84]

@shiningbrightly318 Thank you. I appreciate your honesty. I will check out the FAQs.

 

[sweetone]

@dkelley84 Where should I begin first?

• Understand where your money is currently going. List monthly as well as yearly.
• Make an honest budget (again, monthly and yearly), and find where you can carve out savings.
• You are looking at an ideal savings rate of at least 50% if you want to achieve financial independence by 50. Realistically, 10-20% would be a good start.

What kind of steps should I take?

• Clear debts if any
• Health insurance
• Emergency fund
• Read up on FAQ's for investment choices. It varies depending on your horizon and risk appetite.

What kind of skills should I learn?

• Whatever is needed to level up in your career
• simple Excel / Google sheets
• Spotting scams. Please be aware you might be vulnerable to scams because you just might feel you are too late and need to find a faster way. You are not too late, and there is no easy way.

 

[abhawk]

@dkelley84 If you're 40 years old without any savings or investments, from my perspective, your most evident issue seems to be your spending habits. If you're unable to live within your means, fixing this should be your sole priority before considering anything else.

Imagine a bucket with numerous holes – increasing the water flow won't fill it up. Similarly, without addressing overspending, your financial situation won't improve, regardless of increased income.

Looking at it differently, disciplining yourself financially could make your 1-year salary last 5 to 10 years (depending on your annual income), which might be equivalent to 5 to 10 years' worth of expenses for other families.

Consider this: a financially secure person can live comfortably even with minimal resources, much like a 'taong grasa' who manages to survive with very little. Achieving financial freedom requires mastering the art of living within your means

 

[dariusz]

@dkelley84 start saving now,

 

[robert76]

@dkelley84 I had three goals: own house, emergency fund ready, and financially free by 40. Now at 38 struggling with step 3 same as you.

1. Where to begin: Begin by establishing the emergency fund. Calculated by annual expense. (Includes all, trip back home, gifts, monthly expense). This is 3.2M yen or around 1.2 M php for me. Japan is expensive :’(.
2. Ways to increase income:
   MP2 dividend - 4-8% annually of what you put in

Business venture - entrepreneurship skills, 90% chance to fail for newbies so make sure you have a capital and willpower for ten tries. You only need one success business to make it worthwhile. Franchise of Jollibee 35M to 55M has a 3 year ROI.

Increase Salary - only you know what you are doing right now. Envision what your boss or next level will need (talk to other seniors or veteran). Your network of friends will allow you to jump industry for higher gains.

Real Estate - skill needed will be looking for location, house repairs, and good assessment of tenants. Takes 10 years for ROI. 6M starting but depends on location.

Stock/Crypto - too volatile for me; but skills needed is market knowledge of which will rise and which will fall on changing times