Building wealth: Best moves if you’re 35 to 44

Money magazine’s 101 Ways to Build Wealth package offers blueprints for the different stages of your life on how to achieve real financial security. In tips #28 through #52, we offer advice for 35- to 44-year-olds.

  • Start building your assets and income

    Video still by Finlay MacKay for TIME from a Red One digital camera; set design by Gille Mills

    When you’re decades away from retirement, you can afford to take a few riskier bets in a small part of your portfolio. Three emerging trends worth your money:

    28. Seek the financial frontier. Wish you’d invested in Chinese equities before they quadrupled in the past decade? Frontier funds, which invest in even less developed regions — think Kuwait, Nigeria, and Vietnam — “are like the emerging markets 10 or 15 years ago,” says Harding Loevner analyst Babatunde Ojo.

    Your best way in: a diversified fund like iShares MSCI Frontier Markets ET. ISHARES INC MSCI FRONTIER 100 ETF FM 0.12%

    29. Ride the shale boom. Oil and gas production from shale deposits is “the most important energy innovation of the 21st century,” says Mark Luschini at Janney Montgomery Scott.

    That’s no secret, so look beyond traditional energy giants. Halliburto HALLIBURTON COMPANY HAL -0.42% is the largest provider of hydraulic fracturing services; railroads such as CS CSX CORP. CSX 0.13% transport the oil after extraction. Both trade at P/Es under 11.

    30. Favor new consumers. The old way to invest in the developing world: via a Western multinational active in China and India. Alas, these stocks also expose you to slow-growing Europe, plus many sport lofty P/Es.

    A better way: Buy shares of smaller, local companies that cater to the rising consumer class. EGShares Emerging Markets Consumer COLUMBIA ETF TR II COLUMBIA EMERGING MKTS CONS ECON -0.09% is a one-stop shop.

  • Go for a smaller mortgage

    31. Buy beneath your means. “Dream home” size has been rising lately, says For wealth building, smaller is better. Less space, resulting in a lower mortgage, improves the odds your lender will green-light the deal, and you’ll be left with more cash to invest.

    Standard rule: Mortgage payments (including taxes and insurance) should be no more than 28% of your gross income. A better gauge: 22%, the average for borrowers lately, says data provider Ellie Mae.

    32. Cut it shorter. Your mortgage, that is. Some 28% of new conventional mortgages last year were 15- and 20-year loans instead of the traditional 30-year fixed rate. If you’re thinking about refinancing or trading up, opting for a shorter term can be a smart move.

    Sure, you’ll cough up a little more each month, but you’ll save a bundle in interest and be house-debt-free a lot faster, freeing up cash to invest toward other goals.


    Interest rate: 3.8%
    Monthly payment: $1,403
    Total interest paid: $205,080


    Interest rate: 3.7%
    Monthly payment: $1,772
    Total interest paid: $125,382


    Interest rate: 3.1%
    Monthly payment: $2,079
    Total interest paid: $74,214
    Source: HSH Associates

  • Cut the cost of kids

    33. Practice saying no to your kids. $491,000. That’s the cost of raising a child from birth to age 17 for families earning $102,000 or more, according to the U.S. government.

    Sure, fixed costs like housing and child-care are the big budget busters. But 30% of the cost of kids goes for fungible items such as clothing and “miscellaneous.”

    If your child-related bills include too many outfits from Abercrombie and the latest Xbox and iPhone, rein it in — for them, if not for you. Eileen Gallo, co-author of The Financially Intelligent Parent, says research shows kids who master the art of delayed gratification do better in school and at work. Setting expectations before heading to the mall or shopping online, says Gallo, is the key.

    34. Let your boss help. Take advantage of company benefits that make the cost of raising kids less taxing. Sign up for your dependent-care and health care flex-spending accounts to pay for child-care, summer day camp, orthodontia, and more with pretax dollars. Savings: up to 40% on these bills.

  • Keep your career moving forward

    Taking time off to care for kids can be a big blow to lifetime earnings because of lost wages and career momentum. In one Harvard study, female MBAs who took 18 months off earned 41% less over their careers than male colleagues. Three mitigating moves:

    35. Make work work for you. Negotiating flextime may enable you to stay on the job. Ideally, start the process before you go on maternity leave. Says work-life consultant Pat Katepoo: “Prove you’re just as productive telecommuting before the baby arrives, and you remove this as an issue for your manager.”

    36. Shift down, not out. Work part-time or freelance rather than quit. In addition to the paycheck, you will continue to gain experience and connections and won’t have gaps on your résumé. Search for flex jobs at sites such as Elance,, and FlexJobs.

    37. Stay connected. If you quit your job, do “strategic volunteering” — something that dovetails with your career and can be added to your résumé. And keep up with co-workers.

    “When you’re not working is exactly when you need to keep those connections strong,” says Carol Fishman Cohen, co-author of Back on the Career Track.

  • Pump up your paycheck

    38. Dazzle a higher-up. $7,000. That’s how much more people with senior-level mentors earn, says workplace researcher Catalyst. So create situations where you’ll stand out: Seek assignments that allow you to interact with top brass and join industry groups favored by movers and shakers.

    Watch: Warren Buffett’s career advice

    39. Get pumped up. People who exercise at least three times a week earn 6% to 9% more than those who do not, according to research by Cleveland State University professor Vasilios Kosteas. He cites growing evidence that fit employees are more productive and manage work-related stress better, which can lead to faster career advancement.

    40. Build your brand. At you can create a professional website free; for $10 a month you get hosting, Facebook, and mobile-publishing support. Showcase your work, posting articles, presentations, speeches, and client testimonials, and add new examples regularly.

    A blog can bolster your rep too. Says CareerXRoads CEO Mark Mehler: “The blogs with the most readers are the ones with most frequent updates.”

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