I have written many articles covering the special period called your 30s. In every piece, I cite the 30s as the most expensive and stressful time in your life.
- Retirement Planning in Your 30s
- Real Estate Investing in Your 30s
- Staying Debt-Free in Your 30s
- Dividend Investing in Your 30s
Let’s continue the tradition with this article as we prepare you to invest in bonds in your 30s. The 30s are stressful for many reasons, and income from bonds can help alleviate your pain.
Welcome back to the Bond Investing at Any Age series (20s), where we invest for security, growth, and income.
Passive Income from Creativity 101: Music
The terrible thirties. I may make the 30s seem like a terrible time, but they are quite fun and exciting. You are becoming an adult because you have enormous responsibilities.
You probably will get married in your late 20s or early 30s and prepare to start a family. You and your spouse plan to buy a home and continue on your career path.
There is a lot going on that requires your time and attention. Taking care of your finances adds even more work to this busy period.
How can bonds help? At its core, your 30s are about surviving with your relationships and finances intact. I would love to say invest $500+/month into bonds in your 30s.
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However, investing this much money is unrealistic. Remember, chances are you or your wife (maybe both) have student loan debt. Real estate prices and interest rates are through the roof.
The real estate rental market is at its highest because investors have moved into your neighborhoods. The media tells you to quit your job and live your best life.
Everything is working against you at this point. So let’s take a breath and determine our investing goals with what little money we have in our 30s.
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Income vs. growth. Ideally, we would want to invest for both income and growth. While bond investing in our 20s, we purchased Series “I” Bonds for compounding growth and 30-year Bonds for income.
In our 30s, we should choose one of the two categories. Growth is suitable for the long-term outlook, retirement, and generational wealth.
Investing for income helps you today and can last for a lifetime. I survived my 30s intact, but I could have used more income.
I had a 401K “sitting in the cloud” away from reality. When things came up, it was of no use to me. I sure could have used an extra $1,000/month of income.
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Therefore, I am in the income camp. More income is never harmful; you can invest for growth if you have excess cash flow.
30-Year Bonds and Bond Funds. My two weapons of choice in my 30s would be 30-year bonds and Closed-End Bond Funds.
I would buy $200-300/month in 30-year bonds to build sweet interest payments. I like Treasuries because they look good on home loan applications.
Bonds can lose value as you attempt to sell them. Bond prices derive from current Treasury yields. However, your Treasury Direct website only states the face value of the bond.
Employment in the Metaverse
Therefore, you can show thousands of dollars in bonds, even if current rates move against you. In effect, you leverage your bonds as collateral when making a significant purchase.
Additionally, you will start to receive interest payments that you reinvest into Series “I” bonds (minimum $25) or other high-yield securities.
What are high-yield bond funds? I love closed-end funds (CEFs), but they are only for some. Bond Fund CEFs are highly sensitive to interest rates.
Not only do they collect bonds, but they use leverage (debt) to increase returns. This means you can see your account balance in the red more often than not.
Why Real Estate is I.D.E.A.L.: Income
However, if you focus on income, it is a site to behold. I bought most of my CEFs when interest rates were 1.5%. Now rates are 4%, and my CEFs are getting destroyed.
However, my sweet income continues to come in throughout the month. I can use this income to reinvest into dividends, bonds, or cash to help throughout life.
Options galore. I don’t recommend most people buy Bond CEFs because it takes research to understand them. People don’t like to read or form their own opinions.
However, if you read “Step-by-Step Bond Investing,” you will start seeing the benefits of investing in bond CEFs.
Passive Income from Creativity 106: Writing
My major takeaway from investing in CEFs for two years is that they give you options. I trust my CEF managers to keep my income coming in night and day.
This income allows me to focus on other things, like taking care of the kids or going on a date with my wife.
You can focus on growth. You can focus on something other than income, especially if you have a high-paying job and live below your means.
You can focus on growing your wealth by investing in Series “I” Bonds. You and your spouse can invest a total of $10,000/each per year. You can also purchase $10,000/per child per year.
Education in the Metaverse
You will be in good shape if you can max out all of these amounts. Plus, Series “I” Bonds can become tax-exempt with qualified educational uses. They may prove to be better platforms than 529 College Savings accounts.
Survival of the fittest. Ultimately, your 30s are about staying debt-free. There is just too much going on to get through perfectly. You’ll have to get dirty at some point.
Having an additional $500/month is a major win in your 30s. I wish I had known about things like CEFs and 30-Year Bonds.
Refrain from punishing yourself too severely for not saving a lot of money in your 30s. America is expensive, and most of us don’t have the information to get out debt-free.
Investing for Interest 102: Super Safe Savers
Conclusion. Bonds are our friends; I prefer to have income. Once you have much more income versus expenses, you will have the resources to save for the future.
The challenging part is keeping expenses low while increasing income. Investing $200-$300/month into CEFs via M1 Finance pies are a great way to dollar-cost average and grow your revenue.
If you can get the ball rolling, the dividends will continue to reinvest for you. For example, my CEF pie on M1 Finance pays me $80/month.
Net Worth vs. Passive Income
The pie reinvests that $80 back into more CEFs every month. So each month, my payment increases a little, say to $81. Such is the power of compounding high-yield products.
If you are serious about getting ahead in your 30s, read a book or two. Remain debt-free, avoid credit cards, and have fun on the cheap.
You will thank me in the future for preparing you for your 30s. Overall, my 30s were great. However, in the end, I had to spend two years getting myself out of debt. I wish I could have bought CEFs instead. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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