I'm happier in my thirties. I feel clearer about who I am and less apologetic about it, and more accepting of my limitations and also more aware of the ways in which I'm capable. -- attributed to Claire Danes 

One critical capability all thirty-somethings should be aware of is that they can (and should!) amass a lot of money if they start investing in the stock market. There are lots of mistakes to avoid along the way, though, if you'd like to become a millionaire or multimillionaire.

Person looking at laptop in alarm, arms raised.

Image source: Getty Images.

Here are 10 blunders to avoid.

1. Not learning about how money grows

First, it's vital to learn and really appreciate just how much you might amass over time -- especially if you start soon. That's because the dollars that have the most time in which to grow for you are your most powerful dollars. Since you're still young, your dollars may be able to grow for decades. Check out the table below:

Growing at 8% for

$5,000 invested annually

$10,000 invested annually

$15,000 invested annually

5 years




10 years




15 years




20 years




25 years




30 years




35 years




40 years




Data source: Calculations by author. 

2. Racking up debt

A great way to sabotage your own efforts toward building financial security is to be carrying a lot of high-interest-rate debt, such as that from credit cards. After all, the stock market's average annual return over long periods is close to 10%, which is great, but many credit cards are charging 16%, 20%, or even 25% or more annually. You'll be losing ground faster than you're gaining it.

3. Not having an emergency fund

Not having an emergency fund is kind of an emergency. It's easy to assume you won't unexpectedly lose your job or face costly medical bills or need a new transmission for your car, but these things happen to people all the time -- often out of the blue. Aim to have at least several months of living expenses in an accessible account, so you're prepared for any expensive curveballs life throws at you.

Two shocked people looking into empty wallet.

Image source: Getty Images.

4. Not living below your means

It's smart to develop good habits early in life, and one of them is living below your means. That means spending less than you bring in. If you're living below your means, you'll think twice about saddling yourself with an expensive house or a fancier-than-necessary car. You won't rack up debt needlessly, either, and you'll aim to spend as little as possible on things -- ideally using coupons and seeking discounts and sales.

5. Not making use of retirement accounts

A classic blunder many thirty-somethings make is ignoring retirement accounts or making mistakes with them. For example, if your employer offers a 401(k) plan, participate in it. Consider opening an IRA account, too, and contributing to it every year.

When you change jobs, don't cash out your 401(k), even if it doesn't have much in it. Roll it over into an IRA so you can continue saving for retirement with it, or transfer it to a new employer's 401(k) plan. Avoid borrowing from your retirement funds, too, as that can cost you in taxes, penalties, and/or foregone earnings on the money.

6. Not investing in stocks

Another mistake young people (and older people) often make is ignoring the stock market, when it's arguably the best route to wealth. Consider the research of Wharton Business School professor Jeremy Siegel: He found that stocks outperformed bonds in 96% of all 20-year holding periods between 1871 and 2012 and in 99% of all 30-year holding periods. He also calculated the average returns for stocks, bonds, bills, gold, and the dollar, from 1802 to 2012:

Asset Class

Annualized Nominal Return









U.S. Dollar


Data source: Stocks for the Long Run.

To see what a difference in long-term wealth building a few percentage points can make, check out the following table, which uses the annualized returns above:

$10,000 Invested Annually

10 years

20 years

30 years

In stocks at 8.1%



$1.2 million

In bonds at 5.1%




In bills at 4.2%




In gold at 2.1%




In the U.S. dollar at 1.4%




Data source: Author calculations.

By the way, over a shorter period, from 1926 to 2012, Siegel found that stocks grew at an average annual rate of 9.6%, versus 5.7% for long-term government bonds.

Several wads of hundred dollar bills are stacked.

Image source: Getty Images.

7. Not investing meaningful sums

It's not enough to just invest your long-term money in stocks. You should aim to invest a lot of it in stocks. For many of us, the general guideline to sock away 10% of our income will not be enough. Revisit the table near the top of this article, and you'll see that the amount you can save and invest each year can make the difference between achieving millionairehood or multi-millionairehood.

8. Taking on too much risk

Investing in stocks is a powerful long-term strategy, but don't just invest in any stocks. Don't fall for the hype around penny stocks, for example, and don't chase growth stocks, paying any price for them. Aim to buy stocks when they seem undervalued relative to where you expect them to be many years from now.

Better still, just stick with simple, low-cost index funds. They can give you roughly the same returns as the overall stock market, and that's plenty good enough for building long-term wealth.

9. Not talking about money with others

Here's something else you should do that few thirty-somethings and older folks do: Talk about money. Don't let it be a taboo topic that everyone avoids, because that means you'll be missing out on hearing about your friends' and relatives' financial goals, experiences, and advice. Share your concerns and goals, and ask others about theirs. There's a lot we can learn from each other. At the very least, talk about money frequently with your partner or spouse if you have one.

10. Not having a plan

Finally, here's a big blunder that too many people make: Not having a plan. It's great to be saving and investing, but are you saving and investing enough? Too little? Too much? How much more should you be aiming to invest in the coming years? How much money do you need to retire with? Do you want to try to retire early? If so, how will you achieve that goal?

Take some time to come up with a plan, and don't be afraid to consult a financial advisor or planner, too. They know a lot more than you do about retirement strategies, and they may save you far more than they charge you.

The more you learn about financial mistakes, the better -- because then you'll know enough to avoid making them yourself. That can save you hundreds or thousands of dollars, and it may help you earn thousands of additional dollars, too.