You’re Making All the Right Money Moves, so Why Aren’t You Rich Yet?

Frustrated concerned young couple calculating overspend budget, doing paperwork job at laptop, talking about financial problems, insurance, mortgage, fees, loan conditions, bankruptcy, economic inflation.
valentinrussanov / Getty Images

There’s no doubt that the last few years have presented a Pandora’s box of financial challenges. Layoffs, record inflation, skyrocketing interest rates and more factors have made it difficult for many to simply stay afloat.

But let’s imagine that despite these challenges, you’ve been able to keep your finances on track — and it feels like you’re doing everything right. You’re saving a good chunk of your income. You’re keeping debt to a minimum. You’re investing in low-cost funds and taking advantage of tax-advantaged accounts like a 401(k) or IRA.

So why aren’t you rich yet?

According to Mark Wilson, founder and president at MILE Wealth Management, your plan may be missing one key ingredient: Time.

When you’re saving and investing for the long-term, you see your biggest gains later. That’s because of the way compound interest works — it has a snowball-like effect that picks up steam as time goes on. 

Wilson shares this example. Say at age 25, you begin contributing $6,000 a year to your retirement account. Each year, you increase the savings amount by 3%. You also earn an average rate of 7% annually.

In this scenario, you could expect to build a $2 million nest egg by age 65. However, growth might seem slow at first. You’d have just $115,000 at age 35, $365,000 at age 45, and $905,000 at age 55. “Compounding has the biggest impact at the later dates,” Wilson explained. “Keep doing those right things and time will do its job.”

Make Your Money Work Better for You

How To Stay Motivated on Your Financial Journey

“It can be frustrating when you feel like you are doing everything right but are not where you expected to be financially,” said Andrew Latham, a certified financial planner and the director of content at SuperMoney.

However, it is important to understand that the path to financial success isn’t linear.

Having patience is key when it comes to wealth building. “Navigating the world of personal finance can feel like sailing in unpredictable waters,” Latham explained. “Even the most skilled sailors can’t control the winds or foresee storms. Similarly, even if you’re making the best financial choices, certain elements remain beyond your control.”

Here are some things to keep in mind and help you stay the course as you work toward your goals:

  • Embrace the ups and downs: The world of finance is often cyclical. From stock market volatility to economic booms and recessions, it’s normal to go through slumps and periods of growth. Latham emphasizes that these cycles, while challenging, are natural and to be expected.
  • Get comfortable with uncertainty: No matter how much planning you do, there are events outside of your control that can throw you off course. “Market fluctuations, unexpected expenses, global events, or health setbacks can derail the best-laid financial plans,” Latham said. He added that sound money management isn’t about avoiding these setbacks, but rather how you respond to and navigate them.
  • Remember that greater risks lead to greater rewards: You work hard for your money, so the last thing you want to do is expose it to unnecessary risk. However, growing your wealth does require some level of risk, otherwise you won’t see the kind of growth necessary to reach long-term goals. “While it’s essential to be informed and make the best choices possible, no formula guarantees success 100% of the time,” Latham said. “Recognizing this can be liberating because it means it’s not always ‘your fault’ if things don’t pan out as hoped.”
  • Endurance is the secret: It’s understandable if you feel disappointed or burnt out after years of working toward a goal without seeing the results you expected. “Sometimes, the journey to financial prosperity feels like climbing a mountain with no summit in sight,” Latham said. It can be tough, but if you keep making the right money moves, you’ll eventually get where you want to be. “Only if you endure and push through these challenging moments will you eventually enjoy the views from the top,” Latham added.
  • Learn from your mistakes: If it feels like you’re spinning your wheels and not getting the gains you expect, Latham said it can be a good idea to take a step back to analyze where things might have gone wrong. “Financial wellness, like physical wellness, requires regular check-ups, adjustments, and a determination to improve,” he said. If you ever feel stuck or unsure of how to handle a certain situation, it can help to speak with a professional, such as a financial advisor or tax expert.
Make Your Money Work Better for You

More From GOBankingRates


See Today's Best
Banking Offers