Why do many men get rich in their 30s, and go broke in their 40s? Photo | Photosearch

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Why do many men get rich in their 30s, and go broke in their 40s?

What you need to know:

  • Men who get wealthy young face the curse of young money
  • "At 40, I lost all those things except my children,"
  • "Finances are the largest component in the breakdown that occurs past age 40. Finances are however compounded by other factors such as deteriorating marriage, black taxes, and societal pressures,"

Recently, former deputy presidential candidate Ronnie Osumba shared how he made it by 30 and then lost everything by 40. He shared his experience on the Engage talk show YouTube series and social media. 


In the candid talk dubbed #Battle-Hardened, Ronnie shared how he was a senior manager at Safaricom by 30 and had settled down in marriage, had one child, and acquired a string of properties. At the age of 33, he had two children, three cars, and more land, and was a deputy presidential candidate. Within the next seven years, Ronnie lost nearly everything, including his marriage. "At 40, I lost all those things except my children," he said.

Ronnie is not alone. As men shared on the social media thread, many have experienced a downturn once they hit 40. Men in their 40s are more likely to suffer a financial crisis than a midlife crisis, says financial advisory firm Tenon Recovery survey. "As people reach their 40s, any increase in wages over the years is counter-acted by a disproportionate increase in outgoings, such as paying college bills. These additional costs mount up, making it easy for debts to spiral out of control," Tenon said in their survey report. 

This could also be a result of decisions made in the late 20s and 30s. "Finances are the largest component in the breakdown that occurs past age 40. Finances are however compounded by other factors such as deteriorating marriage, black taxes, and societal pressures," says Rhina Namsia, the founder and chief executive officer of The Acemt Consulting, a training, and consultation company that provides financial planning and investment advisory. She points out that in your 20s, you will be building your career and wealth, and in the process, you will rake in long-term mistakes from your financial decisions, whose consequences will only show up in your late 30s and 40s. "It's said that life starts at 40. This is when the results manifest," says Rhina.

Men who get wealthy young face the curse of young money. According to sociologist Johnstone Miriti, many of these men will hardly have gone through the life processes that teach the value of money and delayed gratification. "They will neither accept mentorship because of the socio arrogance that is common with young money and the belief that they don't need mentorship since they hacked wealth on their own," he says. 

"Should things hit the fan later, survival becomes nearly impossible as they are not accustomed to it." He points out that a young man who went to good schools and got a six-figure paying job immediately after graduating from the university has a very high chance of becoming a multi-millionaire by their mid to late 20s. He also has a high chance of establishing a family before age 35. If there's a bad turn in fortune, this young man could easily find himself in the middle of the wilderness. "He isn't familiar with the value of a shilling, and what it means to be broke. And because he is a prominent figure with a reputation for being wealthy and flashy, he could rake in debts to maintain his lifestyle and social appeal," says Miriti. He may also turn down jobs if they don't match the salary and status he was used to. This will inevitably set in motion a series of conflicts in his marriage, most of them revolving around mismanagement of resources and ballooning debt. These conflicts will trigger emotional disconnection, depression, and possible divorce if untamed.

On the opposite extreme though, Miriti says that a man who went through the life processes and learned to appreciate both ends of wealth and poverty may stand a better chance at proper financial management in his mid-life. "This will however happen if he is not gluttonous and resists the urge to overindulge to compensate for the lack he experienced early on," he says. 

According to a study by R3, a US-based professional association for insolvency practitioners, men are also more likely than women to get bankrupt. The leading reasons for this were job loss and business failure. 

But the midlife crisis also plays a role. According to psychologist Patricia Waruguru, with midlife crisis comes concerns about health, stagnancy in marriage, physical aging, elderly parents, being neck-deep in a child's college tuition payments, mortgage fees, or anemic retirement funds. Where there is a marital breakdown, it is easy for a woman who walks out to take the blame for leaving after fortunes have changed. But the marital breakdown is not always the result of the woman taking off when finances run thin. "My marital issues had absolutely nothing to do with finances. I think it is very unfair to always assume that women take off at the first sign of trouble. Life happening is never a single event. It is a series of events and decisions that build up over time!" said Osumba.


What to do to be financially safe heading into your 40s

Retirement: Draw a retirement plan by 30. This includes deciding the age you'll retire and the type of lifestyle you'll want in retirement. Estimate how much you'll need and begin with 80 percent of your present living expenses. There are online financial calculators such as the CalcXML you can use to estimate how much you should save from your annual pay at your current age to attain your desired retirement figure.


Consumer debts: Get out of your high-interest consumer debts. If you have other debts, draw a repayment plan on how you can accelerate the repayments.


Lifestyle inflation: Instead of scaling your lifestyle upwards, consider scaling your retirement contributions.

New skills and gigs: If you have been used to a single source of income, this is the time to adopt new additional skills that can help you diversify into side gigs. This will cushion you in the event your primary source of income shuts down.


Housing and the school fund: Evaluate the most affordable housing options and choose those that you can pay easily. Don't put a down payment if you don't have the money or source of money to fully fund the venture. Education policies can come in handy when your earning power starts to go down.

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