Ramit Sethi: Reach These 9 Major Money Milestones Before 40

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As you go through different decades in life, your money goals and priorities will likely change. For example, you might spend your 20s figuring out how to manage student loans and budget your limited income, while you might focus more on saving and paying down debt in your 30s.

According to money expert Ramit Sethi, you should reach some key milestones by age 40 that will make a big difference in your financial security and wealth. In a recent YouTube video, he discussed nine goals that won’t require obsessing over every purchase or giving up what you love.

Also see two reasons saving less is the secret to building wealth, according to Ramit Sethi.

Have No High-Interest Debt

“If you’re carrying debt above 6% interest, you are burning cash every single day,” Sethi said.

Federal Reserve data showed that credit cards (21.37%), personal loans (11.66%) and auto loans (8.04%) had average interest rates above that threshold in February 2025, the most recent data available. Besides the money lost to interest, your monthly payments steal from your investment opportunities. 

Sethi recommended looking at your debts and interest rates and creating an aggressive debt payoff plan. Pick the debt avalanche plan to save the most on high-interest debt or the debt snowball plan to wipe out the smallest debts first.

Build Your Emergency Fund

Whether you unexpectedly lose your job or face an expense that blows your budget, an emergency fund will cover you and help you prevent needing to take out debt. 

Sethi suggested saving six month’s to one year’s worth of your main expenses, offering more security and flexibility than the usual savings guideline of three to six month’s worth. Lowering expenses and finding extra income opportunities will help you build up your reserves faster.

Fully Automate Your Finances

Sethi said you should invest consistently by age 40 to get rich and recommended an automated and “boring” approach. 

He recommended investing 10% or more of your income, maxing out tax-advantaged retirement accounts like your 401(k) and Roth IRA, and using automatic transfers. He also encouraged annual contribution increases of 1% to accelerate building wealth.

Master Your Career

Sethi discussed how it’s more common to get wealthy by investing what you earn at a job than to win the lottery or a big settlement. So boosting your skills, value and earnings potential is smart.

Besides making yourself more valuable at your current job, you can consider new career options that pay more and seem fulfilling or interesting. Sethi suggested interviewing five experienced professionals to learn about their career paths and see what might appeal to you.

Know Your Number and Why

According to Sethi, you must determine how much money you aim to have and the reason. Maybe you want to become a millionaire to enjoy an early retirement, live a certain lifestyle or give freely to others.

“This is important to know what your rich life is because if you don’t know what that money is for, then you are simply wasting your life chasing a number,” Sethi said.

Use a Shared Financial Dashboard

Combining finances with your partner is a suggestion that many other financial experts, including Rachel Cruze, also support. Otherwise, you risk getting into more arguments and potentially making financial decisions that one of you won’t agree with.

Sethi advised a joint approach where you keep each other current on everything from your income and expenses to investments and debts. He encouraged talking about money together monthly, tracking important numbers in an app or spreadsheet, and monitoring progress toward money goals. Plus, you want to avoid leaving money decisions to one person.

Make Your ‘No’ List

“This one is underrated, and honestly, it’s one of the most powerful moves you can make towards building your rich life,” Sethi said.

Making this list involves thinking about what you don’t care about so you can direct your money to the right things. Sethi recommended listing three things that are a “no” and three things that you want to buy without regret.

Moving forward, focus on reducing expenses that are related to your list of “no” items. You can update your list as your preferences evolve.

Simplify Your Credit Card Assortment

While Equifax recommended having just two or three credit cards, some people have many cards they might use to gain different perks or earn targeted rewards. Sethi explained that this complexity makes everything harder to track, and some of your cards may have predatory interest rates.

He suggested sticking to one or two cards that offer good rewards, canceling bad cards and watching your interest rates, which become less important when you’re not carrying a balance. Besides simplifying your finances, this move could help you avoid running up as much debt.

Know Your Financial Vision

“The goal is not to create a plan that’s in concrete, locked in forever,” Sethi said. “It’s to create a direction, something to aim towards and to update it as you grow.”

While you might have a certain financial vision when you’re younger, you should reconsider it as you grow older. Sethi recommended an annual review where you think about what you want now, what you no longer care about and what lies next in your plans.

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