Forging Your Financial Future

January 2024

For many welders who have embarked on a career that promises a bright future filled with opportunities and financial stability, making the right decisions when it comes to spending and saving money is important. CO2

When you’re starting a good-paying job, it’s tempting to spend those hard-earned dollars made from working the pipeline on a shiny, new pickup truck, all the newest tech toys, and having a good time celebrating life on the weekends. And while life should be enjoyed, if you don’t want to find yourself needing to work in your golden years, it’s important to strike a balance between living for today and preparing for tomorrow. 

There is a haunting statistic that plagues the financial futures of many Americans: A significant portion of them won’t be able to retire comfortably. It is estimated that to retire comfortably today, a person should have savings and investments of $1 million. The sad truth is the average 65-year-old has only saved $280,000 in their retirement account (Ref. 1). 

In this article, we will explore the importance of saving and investing to ensure financial independence later in life. We’ll delve into the distinction between wealth and income, the magic of compound interest, and the advantages of maximizing your contributions to an employer’s 401(k) program. Let’s begin the journey toward forging your financial future. 

Wealth vs. Income 

It’s crucial for newly employed welders to understand the fundamental difference between wealth and income. While income represents the money you earn each week in your job, wealth is the accumulated value of your assets over time. Think of it this way: If you earn $100 per week and spend it all, you have $100 income and $0 wealth. If you earn $100 and only spend $80, you have $100 income and $20 wealth. 

A high income may provide a comfortable lifestyle today, but true financial security and independence stem from building wealth. There are people who have low income but high wealth (by maximizing saving) and people who have high income and low wealth (by maximizing spending). 

It should be every worker’s goal to reach financial independence. Imagine creating a life where you can work when, where, and for who you want to. You could even start your own business or retire early. With the right savings plan and financial independence comes the freedom to pay cash for a new truck or a family vacation instead of having to take out a high-interest loan and having payments, or being able to volunteer your time for a cause you are passionate about without worrying about how to pay your bills. 

Understanding Compound Interest 

One of the most potent tools in the quest for financial independence is compound interest. Compound interest works like a snowball, gradually growing larger as it rolls downhill. When you invest your money, it earns interest not only on the initial amount but also on the interest it accumulates over time. This compounding effect accelerates your wealth-building journey. 

For example, let’s say you begin investing $125 per week in a diversified portfolio at age 25. Assuming an average annual return of 7%, by the time you’ve turned 65, you would have accumulated $1,431,273. However, if you delayed investing until age 35, even with the same weekly contribution, your final sum would be only around $664,000. The ten-year difference in starting early results in more than double the wealth at retirement. This highlights the immense advantage of harnessing the power of compound interest early in your career. Figure 1 shows how important it is to start investing early to maximize future wealth.

WD Jan 24 - Forging Your Financial Future
- Fig. 1


Taking Advantage of 401(k) Plans 

As a welder, you may have access to a valuable retirement savings tool — the employer-sponsored 401(k) plan. This plan allows you to contribute a portion of your pretax income to investments over time. What makes 401(k) contributions even more enticing is the potential for employer matching, which is essentially free money. When your employer matches your contributions, it’s like receiving a bonus toward your retirement savings. 

To maximize the benefits of a 401(k) plan, consider contributing at least enough to capture the full employer match. For instance, if your employer matches 50% of your contributions up to 5% of your salary, aim to contribute at least 5% of your income to take full advantage of the match. By doing so, you’re essentially doubling your retirement savings efforts without any additional cost to you. If you can contribute 10, 15, or even 20% of your paycheck, your wealth may grow even faster. Figure 2 shows how dramatically your wealth may increase as you increase your weekly contributions.

WD Jan 24 - Forging Your Financial Future
- Fig. 2


Learning how to save and invest can be daunting. Take it one step at a time. Begin with your employer’s 401(k) advisors. Talk to them about your life goals and dreams and have them help you get started. Listen to personal finance podcasts, read articles, and watch YouTube videos on the subject. Also learn how to spend less than you earn by budgeting and the proper use of credit. Over time, you should get comfortable being in control of your finances. 


Working toward securing your financial future as a newly employed welder hinges on your ability to save and invest wisely. Remember that wealth, not just income, is the key to financial independence. Harness the power of compound interest by starting your investment journey early, and you will be amazed at the growth of your wealth over time. Additionally, make the most of employer-sponsored 401(k) plans and any matching contributions offered. This is a surefire way to supercharge your retirement savings. In the end, the responsibility for your financial future rests with you, and the choices you make today will significantly impact your tomorrow. Your future self will thank you for it.   


Hicks, C. 2023. Average 401(k) balances by age. Retrieved on April 27, 2023, from

Disclaimer: The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional. These materials are provided for general information and educational purposes based on publicly available information from sources believed to be reliable. We cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time without notice.


This article was written by Michael Krupnicki (AWS president) and Sunny Ramirez (retirement specialist, Sage Rutty & Co.) for the American Welding Society.