How Am I (and you) Doing Financially?
  • Hello everyone,

    I thought I'd start this thread to gauge how everyone is doing with their goals. This is by no means me fishing for compliments -- I'm looking for honest feed back.

    I am 31 years old, single, and have been making 6 figures since I graduated college, averaging $225,000 for the last 3 years. I have a net worth of about $320,000, divided between cash, investments and retirement accounts. I have no debt aside from my mortgage (own my car, no credit card debt, no student loans, etc). I am also 1.5 years away from completing my MBA -- paying cash for tuition each year (about $85,000 when its all done).

    While that seems great on paper, I do not feel like I am saving or doing well enough -- am I a victim of being accustomed to a higher income? I feel like with my income I should have more saved and a higher net worth (I realize that some of my investments have not been so great -- thanks Apple options...). I am not a big spender, but after taxes, 401k, etc, I'm left with ~$9,000/month. After expenses, I usually have $2,000-4,000 left over. Am I just being ridiculous?

    Any thoughts would be appreciated.

    Thanks all,

    N
  • Bricky81 - you're in a great situation in my opinion. I earn just shy of six figures for my salary here in Utah (along with small bonuses and benefits) and here in Utah, the cost of living is pretty decent. Current debt is my house and two cars (one car will be paid off this year). I have $55,000 in savings and net worth is about $259,000. I am married and 35 years old. I have investments in Lending Club, Prosper, Stocks, my 401K, and my own business.

    Your salary is amazing - you should give yourself some credit for the earning power you are achieving. You are in the top 5% of the nation. You are thinking and doing investing and diversified. It sounds like you are evaluating and trying to get better. In my opinion, you're doing great...

    We have about $150 left each month after every single expense and fun/entertainment factored in.
  • Thanks for the kind comments Jeremy. Congrats on having your own business -- I admire you. What do you do, if you don't mind me asking?

    Have you found Prosper.com to be worthwhile? I looked into it a few months ago, but backed off. What is your experience?

    In regards to my income/savings situation, I realize how fortunate I have been, but feel that, given my singleness, lack of debt and somewhat frugal spending habits, I should have more stockpiled. Am I expecting too much?

    Thanks,

    N
  • @Bricky81 - I continue to work at my own day job as an Internet developer and have done a number of things on the side - but none have panned out into a successful income stream yet. Computer games are in my blood and I formed a game company in January of this year and am working on the first game to be released this year. I work on it at night in my spare time when the kids and wife are asleep :)

    https://www.facebook.com/pages/Eglathia-Games/358711854227214

    Website and more to be done later this year. I realize marketing will be an extensive set of work to do during and after the game is finished.

    Prosper.com has been a great experience so far. I have about 250 loans and currently 1 is over 15 days late and 3 are less than 15 days late, so that is about a 2% rate of lateness after 7 months now that I've been doing it. My return is just shy of 14% so far, but I think that will go lower as there will be defaults in the future - the law of averages can't be ignored :)

    The main thing I like about Prosper is that it is all automated. I don't have to spend a single second anymore after setting my automated filters for loans and the interest and monthly additions get reinvested :)

    I think you have a high standard for yourself which is good. After all, if we get too happy with what we have, then we won't continue to improve :)
  • Bricky, you are doing amazing. Now it is time to supercharge building your wealth, pay off all of your debts as fast as possible and never borrow another penny...ever. You'll be shocked at the results and the decisions it will help you make with your money. I'm 42 and have been debt free since I was 32 including my home. I was making similar money at your age and make much more these days because of how I conduct my financial life. DO NOT worry about investments beyond what is going into your 401k, have an emergency fund of 6 months expenses in cash, and throw the rest towards debt. Don't save for a kids college yet or take some ridiculously expensive vacation...just get debt free. When you actually pay cash for stuff like cars and furniture and a new nicer home, it makes you really contemplate if it is really what you want. 10 years after becoming debt free I have an 8 figure net worth, have paid for investments that way more than I made as a salary back then and best of all I sleep like a baby every night even if the stock market goes down 400 points. Trying to chase 4% or 5% swings on return because you have a cheap mortgage will not get you rich. Think of it this way...if your house was 100% paid for, would you go out and take a mortgage at 3.8% to go invest it in the stock market? If your answer is yes, you are in trouble! All kidding aside, you are doing great you will be a multi-millionaire one day, only extra piece of advice is to get to that next level of wealth you will have to go after the X-Factor that Sam talks about. It is a lot easier though to swing for the fences when your downside doesn't involve you losing your home or being stressed beyond belief financially. Good luck & keep up the good work, my guess is you'll be making $600k/year by the time you are my age.
  • Both of you are doing amazing. At 35 years of age with a wife and two kids, I feel like a slacker now as my salary with benefits scratches 100K and I have my house set to be paid off by 50, a car this year and another car by 40. I think I just need to work harder :)
  • JNJ, having a paid for house at 50 is better than 99.9% of the rest of the population...no need to necessarily work harder, work smarter & make sure to enjoy life along the way cause you are doing great too! Keep your eyes out for opportunities as well, they creep up when you least suspect them.
  • @Bricky81 Seems pretty good to me mate. 1-2x your salary by age 30 as a net worth is good. You eventually want to get to around 15X when you want to retire.

    Take a look at the charts here:

    http://www.financialsamurai.com/2012/05/14/the-average-net-worth-for-the-above-average-person/

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