The Average Net Worth For The Above Average Person

When it comes to your finances, everything is relative. To get ahead, you must outperform the average. If everybody is up 20% in their investments, have you really gotten richer? You have not. This post will discuss the average net worth for the above average person. Our goal is to outperform the average so we can live better lives.

You've got one life to live. You can have the average net worth in America, which is pretty low. Or, you can shoot to have an average net worth for the above average person. Let's all shoot to be above average with our one and only lives! This is, after all, Financial Samurai.

If we all earn $1 million dollars a year and have $5 million in the bank at the age of 40, none of us are very wealthy. With this level of wealth, all our living costs (housing, food, transportation, vacations) will be priced at levels that squeeze us to the very end.

As such, we must first get an idea of what the real average net worth is in our respective countries, and then figure out the average net worth for the above average person!

Average Net Worth By Age In America

According to the latest Federal Reserve's Triennial Consumer Finance Survey available, the average net worth for the following ages are:

Under 35: $76,200

35-44: $288,700

45-54: $727,500

55-64: $1,167,400

65-74: $1,066,000

75+: $1,067,000

Not bad. Believe it or not, the average household net worth in America is now $1.06 million. But these average net worth numbers are skewed by the super rich who have generated an enormous amount of wealth since the financial crisis. The median household net worth is closer to $192,000.

Although the average net worth for all Americans is roughly $692,100 in 2023, the median net worth is a more pedestrian $97,300. Meanwhile, the median age for Americans is around 36. Therefore, your goal is to try and beat the average net worth by age in America every step of the way.

I firmly believe if you join 65,000+ others and subscribe to the free Financial Samurai newsletter, the free Financial Samurai podcast on Apple or Spotify, and immerse yourself in personal finance by reading a great personal finance book, you will get there.

Let's look at the average net worth for above average people. It's much more rewarding to shoot for stretch goals and achieve the.

The Above Average Person Is Loosely Defined As

1) Someone who went to college and believes grades and a good work ethic do matter. Or someone who graduated from high school and went straight to work in the trades or building your own business.

2) Does not irrationally spend more than they make.

3) Saves for the future because they realize at some point they no longer are willing or able to work.

4) Takes responsibility for their own actions when things go wrong and learns from the situation to make things better.

5) Takes action by leveraging free tools on the internet to track their net worth, minimize investment fees, manage their budget, and stay on top of their finances in general. Once you know where all your money is, it becomes much easier to optimize your wealth and make it grow.

6) Welcomes constructive criticism and is not overly sensitive from friends, loved ones, and strangers in order to keep improving. Keeping an open mind is critical.

7) Has a healthy amount of self-esteem to be able to lead change and believe in themselves.

8) Has a diversified net worth, which includes stocks, bonds, real estate, and alternative investments.

9) Enjoys empowering themselves through learning, whether it be through books, personal finance blogs, magazines, seminars, continuing education and so forth.

10) Has little-to-no student loan debt due to scholarships, part-time work, or help from their parents. Our parents have saved and invested through the largest bull market in history. It's understandable that parents want to help their children out.

11) Does not confuse brains with a bull market.

12) Understand the power of inflation and believes $3 million is the new $1 million

13) Is constantly learning and reading about health, wealth, and relationships. In fact, the above average person reads 10X more than the average person.

Check out my Wall Street Journal bestseller, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. It is the best personal finance book you can read today.

The Above Average Net Worth Deconstructed

Now that we have a rough definition of what “above average” means, we can take a look at the tables I've constructed.

The tables are based on the tens of thousands of past comments by you. They are also based on the more than 2,300 posts I've written since 2009 to highlight the average net worth of the above average person.

First, we'll focus on the simple 401(k) retirement savings system. For 2023, one can contribute a maximum of $22,500 in pre-tax dollars. The maximum contribution amount will likely go up by $500 every couple years if history is any guide.

This chart can be used as a rough estimate for those with the RRSP plan in Canada and retirement plans in Europe and Australia as well.

In fact, any country that has any sort of tax-deferred retirement plan and social safety net program for retirement that has a GDP/capita of $30,000 or more can use the below chart as an aspirational guide.

Remember, we are talking about the “above average person.” Given not everyone can contribute the maximum 401(k) amount, I've used the average contribution of $18,000 instead.

Financial Samurai 401(k) Savings Guide

The average net worth for the above average person takes full advantage of his or her 401(k). The 401(k) is a tax-advantaged account where you contribute pre-tax dollars, which lowers your taxable income and tax bill. The money then compounds without a tax drag.

Only after 59.5, when you can start withdrawing from your 401(k) penalty-free, do you need to pay taxes on the withdrawals. However, by then, your marginal income tax rate should be lower since you're retired.

Below is the recommended 401k amounts by age.

401k by age savings potential guide

401(k) Contribution Assumptions

The assumption here is that the above average person is able to start maxing out their tax-deferred retirement plan every year after the second full year of work. He or she will continue on without fail until 65. You can read more about the right contribution order of your investments between tax-advantaged and taxable accounts.

The low and high end account for a conservative 0% return to a more historical 7% – 9% constant rate of return. Of course you can lose money if you are unlucky and make much more if you are good and lucky.

Given the 401(k) maximum contribution limits have increased over time, the left column can also be used as guidance for older savers over 45 years old. The middle column can be used for middle aged savers between 30 – 45. The right column can be used by younger savers under 30 who get to max out at $19,500 a year at the minimum for the majority of their careers.

For example, when I started contributing to my 401k in 1999, the maximum contribution limit was only $10,000. If you are a 40 year old, it's best to focus on the Mid End column.

This chart does not take into consideration any after-tax savings post 401K contributions. However, the high end does include 401k company contributions, as this is common for those with seniority and those who work at profitable, generous companies.

For example, for the last five years, my company paid out more than $20,000 a year in profit sharing.

Financial Samurai Post-Tax Savings Guide (Taxable Investments)

The average net worth for the above average person is also bolstered by building a large taxable investment portfolio. After all, you can't withdraw from your 401(k) before 59.5 without a 10% penalty. When I say post-tax, I mean taxable investment portfolios such as your online brokerage account.

It also refers to your rental property portfolio you are building. Some of you may simply prefer real estate over stocks. That's fine. Real estate has historically been a fantastic wealth-creator long term. The combination of rising rents and rising property values is hard to beat.

My favorite private real estate investing platform is Fundrise, which focuses on residential and industrial properties in the Sunbelt region. Valuations are lower and rental yields are higher in the Sunbelt. The platform was founded in 2012 and manages over $3.5 billion in real estate.

Financial Samurai Post Tax Savings Guide Chart - Average net worth for the above average person

The above chart assumes on the low end that one saves about $5,000 a year in after-tax income and around $10,000-$15,000 a year in after-tax income on the high-end after maxing out their tax-deferred retirement vehicle.

I've tried to keep things as simple as possible, assuming no inflation and no investment returns. I also believe saving $5,000-$15,000 a year in after-tax income is very realistic for the above average person, and probably very easy for many who earn more than $85,000 per person.

If you want to achieve financial independence sooner rather than later, it's your accessible post-tax savings and investments that matters more than your tax-advantageous retirement accounts like your 401(k), IRA, Roth IRA, and so forth. Why? Because your post-tax savings guide is what will spit out passive income to pay for your lifestyle.

Finally, the chart should show you the power of consistency. Every person who wants to be above average financially should target a 20% savings rate after maxing out their 401(k) contribution.

The Importance Of Real Estate

The average net worth for the above average person also owns his or her primary residence and invests in real estate for income and diversification purposes. Inflation is too powerful a force to combat. If you are a renter, you are short inflation and the real estate market, which is no good long-term.

The Federal Reserve study showed that the average net worth of a homeowner is roughly $1,034,000. This is 11X greater than the average renter's net worth of $91,000. Some studies show the average net worth for homeowners is 40X higher.

We can debate the merits of this study all day long (demographic sampling, housing price changes, etc), but the point is: above average people generally all own homes and are much wealthier than renters.

The return on rent is always negative 100%. You get a place to live and that's that. There is never a positive return on an asset after a month, or 30 years of renting. A renter cannot pass on her paid off house to her kids or grandchildren. There is no asset accumulation at all. There is a reason why some 97% of millionaires are property owners.

The value of real estate varies across all the land and the world. It is very hard to make an assumption of what should be inputted as a result. According to the US Census bureau, the median home price in America is roughly $440,000 as of 2023.

In fact, due to the coronavirus pandemic, the demand for real estate is surging because we're all spending much more time at home. Further, mortgage rates remain low, although they've ticked up.

Real Estate Investing Arbitrage

You can't get anything livable in San Francisco, New York City, Los Angeles, Washington DC and Boston for $320,000. But, you sure can in the Midwest where I'm aggressively investing money through real estate crowdfunding platforms like Fundrise. They provide a way for all investors to diversify into real estate through private funds with just $10.

Valuations are so much cheaper and the net rental yields are so much higher in non-coastal cities compared to the coastal cities. With companies like Google investing $13 billion in heartland real estate to expand operations, you know other companies and investors will follow.

Further, work from home is here to stay after a long pandemic. Technology has made working from home acceptable.

As a result, there will be a multi-decade migration away from densely populated and more expensive cities to cheaper cities with more space. CrowdStreet specifically focuses on real estate opportunities in 18-hour cities like Charleston, South Carolina vs. 24-hour cities like Los Angeles, California. 18-hour cities are secondary cities with lower valuations and higher rental yields. These cities also have higher growth potential due to job growth and demographic trends. 

If you are a real estate enthusiast with more time, you can build your own diversified real estate portfolio with CrowdStreet. However, before investing in each deal, make sure to do extensive due diligence on each sponsor. Understanding each sponsor's track record and experience is vital.

I personally sold a San Francisco rental property for 30X annual gross rent and a 2.5% cap rate in 2017. Then, I reinvested $550,000 of the proceeds in real estate crowdfunding with a target 10% cap rate. It feels good to diversify into no-coastal city real estate and earn income passively.

My total investment is $810,000 in the space. I've received over $624,000 in distributions since 2017. It's been great to diversify my expensive real estate holdings and earn more income passively.

private real estate investment dashboard

Financial Samurai Home Equity Guide

Let's now construct an equity value chart of something based on a range of $250,000-$500,000. Let's assume that upon retirement, you have your house paid off and can attribute this amount into your net worth.

Financial Samurai Home Equity Accumulation Guide Chart

I assume that the above average person buys a $250,000-$500,000 piece of property at 27. By the time they turn 28, they will have owned the property for 1 year. They will have also paid down $3,500-$7,500 in principal on a $250,000-$400,000 loan.

I conservatively assume a $250,000 no money down loan for the low end house. Even though after 5 years of working, the low-end above average person should have around $25,000-$30,000 saved up in cash based on the after-tax savings charts above.

Paying Down Debt Is What Above Average People Do

By the time a 27 year old pays off his or her mortgage in 30 years, s/he will be 57 years old with a place to live rent from for the rest of his/her life. That is the true value of the property, the rent saved for the remainder of the owner's life.

I assume zero price appreciation on the home. It's always best to keep things conservative. There are no extra payments to accelerate the payoff either.

Home prices have historically returned just a bit above inflation every year e.g. 3-4%. But given the above average person puts down about 20%, the 3-4% returns suddenly turns into a 15%-20% cash-on-cash per year.

15-20% compares favorably to the average S&P 500 return of roughly 5.6% from 1999-2018 and 10% since 1926. Although, expect future returns for stocks, bonds, and real estate to be lower.

Add on the tax benefits for mortgage interest deduction and owning a home through a mortgage becomes very beneficial for higher income earners.

The Average Net Worth For The Above Average Person

Below is the end result. It shows the average net worth for the above average person by age and years of work experience.

The chart includes the average 401(k) amounts, average taxable investment amounts, and average real estate equity amounts. The table should give you a rough net worth amount to shoot for if you want to be considered above average.

The Average Net Worth For The Above Average Person by Financial Samurai

The average net worth for the above average person by age is as follows:

$250,000 by 30

$429,000 by 35

$660,000 by 40

$914,000 by 45

$1,240,250 by 50

$1,684,000 by 55

$2,180,250 by 60

Somewhere in their mid-40s, the above average person becomes a millionaire. In comparison, the average American only becomes a millionaire between 55-64. This is 10-15 years later according to the Federal Reserve.

The key is to stay disciplined with your savings and investing routine. With a proper asset or net worth allocation, you'll be amazed at how far your net worth will grow over time.

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Buy This, Not That: How To Spend Your Way To Wealth And Freedom Bestseller

Stay On Top Of Your Finances

The best way to build wealth is to get a handle on your finances by signing up with Empower. They are a free online platform which aggregates all your financial accounts on their Dashboard. This way you can see where you can optimize your finances.

They've also come out with their incredible Retirement Planning Calculator. The calculator uses your linked accounts to run a Monte Carlo simulation to figure out your financial future.

The average net worth for the above average person is all over tracking his or her finances. There's no rewind button in life. It's better to end up with a little too much than a little too little.

Retirement Planning Calculator

Invest In Real Estate More Strategically

If you want to have an above average net worth, you should also consider investing in real estate. Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.

My favorite private real estate investment platform Fundrise. I believe real estate has bottomed and prices will rebound as the Fed starts cutting rates.

Fundrise has been around since 2012 and manages over $3.5 billion in assets under management and has over 400,000 investors. It's investments predominantly focus on residential real estate in the Sunbelt, where valuations are lower and yields are higher.

I've personally invested $954,000 in real estate crowdfunding across 18 projects. My goal is to take advantage of lower valuations in the heartland of America. There is a strong demographic shift towards lower cost areas of the country. Technology and the rising trend of working from home will make this trend permanent.

Fundrise

Join 65,000+ others and subscribe to my free weekly newsletter. Since 2009, the newsletter has helped people achieve financial freedom sooner, rather than later. The Average Net Worth For The Above Average Person is a Financial Samurai original post.

1,028 thoughts on “The Average Net Worth For The Above Average Person”

  1. I noticed below, you indicate there is a calculation on the amount you need to retire based on a multiple of what you make. But shouldn’t that be based on a multiple of what you spend? You could be making 600k a year, and saving a big percentage of that amount, and if so, calculating your needed retirement based on that number doesn’t seem to make sense.

    1. You can use expenses as a multiple, but I prefer income because it forces you to focus and save and invest more as you make more.

      With expenses, you can cheat your way to financial independence by slashing expenses to the bare bones.

      Using Income is my Third Rule Of FIRE, which I started writing about in 2009.

  2. I am 35 and just hit 429K in my investment and savings account, what are the odds. But my birthday is next month so I guess I am 47K behind. Still funny, also I rent and have no debt so my net worth is easy to calculate ha good luck everyone

  3. “Average” is the most useless and deceptive indicator in the world of statistics.

    Here is what “average” is:

    4 homeless people with a net worth of zero each are in a room.
    Someone walks in with a net worth of 5 Million dollars.
    Now “on average” everyone in the room is a millionaire.

    Most US citizens do not achieve the “average” millionaire status by 60 years old. In fact, a net worth of about $850,000 is the lower end of the top 10th percentile in US as of 2022.

    1. Greenbacks Magnet

      After learning about personal finance (PF), I thought folks should stop thinking average and start thinking outside the box. Instead of owning a $500,000 home and having a very small amount saved in a 401k, why not flip that. Why not own a $500k 401k and a small home? Just my 2 cents.

  4. When looking at a lot of these averages should we consider individual net worth or household. I read the charts both ways but just curious what the intent would be individual or total with spouse?

  5. Poor in SoFlo

    So I think I just passed $2M in my early 40’s riding the wave of real estate up. So $1M in stocks/bonds/options, and $1M in equity.

    I still feel poor tho. I wonder if these numbers need to be revisited for targets given the crazy inflation these past few years?

    1. I understand how you are feeling. I’m in my mid 40’s and have similar savings in equities but $3.5M in real estate equity (1 primary and 3 cash flowing rentals that more than cover my living expenses which now allows me to save 100% of my 1099 income from my job (multiple 6-figures per year), so my savings are growing fast). I still feel I am behind the savings curve and not financially secure. There has been little to no lifestyle creep despite my situation. I have the essentially the same wardrobe for the past 15 years. Sounds and looks ridiculous when you put thought/feelings to text. If you would have told me in my mid thirties, this is where I would be financially in a decade, I would have jumped for joy and done back-flips. It seems we share a psychological issue that won’t go away very easily no matter how much we save. I was listening to a podcast earlier this week and the podcaster who is worth well over $100M still feels financially insecure. That sounds even more ridiculous but the psychology behind the situation is real.

  6. Are the above household numbers or an individual person’s share of household net worth if they are married. I.E. The average net worth for the above average person by age is $1,684,000 by 55. So a couple both aged 55 need $1,684,000 X 2 = $3,368,000 to be considered “Above average”?

    So many of these posts, not just on Financial Samurai, don’t clearly state if these numbers are household or individual.

    1. The title of the article literally says: “The Average Net Worth For The Above Average Person.” According to Oxford Dictionary a person is defined as: “a human being regarded as an individual.” You might consider giving Financial Sam an apology.

      Marty, if you are interested, Sam has a different post for the above average couple.

      Sam, please don’t let comments like this stop you from producing such awesome content. Your insight helps so many people, including me. Personally, I’ve referred to your blog and book countless times to help me navigate my own financial journey. Many thanks for what you do!

  7. Where is it reflected then? For instance, you list the following for Age 35:

    Avg pre-tax savings = $284K
    Avg post-tax savings = $115K
    Avg property equity = $30K
    Avg Total net worth = $429K

    I don’t see how a mortgage fits into this – it seems like you are only accounting for assets in your net worth calculation. I would assume based on the $30K property equity and that you assumed ~$250K mortgage loan for most buyers – there should be at least low six figures of liabilities accounted for here?

      1. So let’s then assume you have $250K mortgage value at age 35.

        Shouldn’t your age 35 above avg net worth calculation be then should be $179K? Math below:

        Avg mortgage value: ($250K)
        Avg pre-tax savings = $284K
        Avg post-tax savings = $115K
        Avg property equity = $30K
        Avg Total net worth = $179K

        1. ROBERT KENDALL JACKSON

          I would count your home equity, (value – mortgage) but not count your loan against your net worth (you could have negative equity). Remember also that it would cost you 5 to 10% of your home value to liquidate it, so you would not actually get 30K from it.

  8. Does you ‘average net worth for the above average person’ calculations include liabilities/debt (e.g., mortgage)?

  9. New to the site. Just turned 50, with a wife and 2 kids living in the Bay Area. Our current NW is 11M, including a 4.4M home, with no debts. TBH, this feels close to fat fire, but not quite. I worry about inflation, the cost of educating the kids, healthcare and market headwinds.

      1. I agree with your calculation for the most part – again, it’s different for everyone depending on where they are in life, but if you are near the end of your career and expenses are winding down (and you have the correct insurances to protect in the event of an extraordinary event), that number works pretty well….

      2. For regular FI, I think there should be no problems. However, for fat FIRE the big ticket items would include 2 private school tuitions (100k), a platinum health plan (60k), as well as property tax (let’s say ~30k). Adding up all the other costs, it’d probably be close to 300k annual spend. Under that scenario 6.5M in investable assets starts to feel a little.. iffy, especially with inflation.

  10. I have been following your blog for years and find the net worth figures on above average people to be a good motivator and measuring stick. However, I’m worried that they may be skewed by national numbers for those of living in high cost cities on the coasts. Do you have any adjustments or thoughts of how these might differ or increase in major cities (SF, LA, DC, NYC, MIA)? I know our home equity can be much greater than the averages, as homes simply cost more and appreciate more. How would you interpret/adjust based on geographic region and cost of living?

    1. Yeah, I agree Tony. It would be nice to have a location and an inflation adjustment to the net worth chart. It seems low to me as a 31 year old in NOVA. Sam we need an update!

      1. The figures are updated. If you have a higher net worth than my figures, congrats! Keep doing what you’re doing.

        And ultimately, try to get to 20X your average annual gross income or more for your net worth to feel financially independence.

  11. Sam,

    Long time reader. Just bought a copy of your book and am thoroughly enjoying. As an Asian American living in a high-cost coastal city (Brooklyn NY), I can relate to so many of your stories and experiences. Wanted to thank you for all your incredible, easy-to-digest content, and valuable teachings.

    I am happy to share we (wife and I) are on our way towards financial independence. I am 40 she is 39. Our net worth (give or take some crazy market volatility) is roughly $1.7M. Rough breakdown of asset allocation would be 55/40/5 [stocks including 401k/condo owned free and clear/cash].

    It gives me comfort knowing disclosing this type of info in this community is not viewed as bragging, but rather a way to keep yourself honest to your goals and to encourage others to reach theirs.

  12. Love the content and just ordered the book from Amazon. Curious to know if you’ve invested yet into Crowdstreet, and if not yet, why not? I see return content for your Fundrise investments but have not come across actual return info for CS. Thank you, Sam!

    1. Thanks for ordering my book. I think you’ll love it as I go deep into money matters and tackle some of life‘s biggest dilemmas. I hope you will leave a great review when you’re done.

      I have invested in CrowdStreet deals before. One worked out well, 40% return over 2 1/2 years for a class a office building refurbishment. Another is doing fine and should exit within the next two years.

      I found that I don’t have time to pick individual deals and assemble a portfolio. Therefore, I like investing in Fundrise because they offer private funds and exposure to SunBelt single-family and multi family real estate. That is the asset class I want to gain the most exposure to. As I wrote about investing in the heartland of America since 2016.

      The biggest strategy in investing is to invest in long-term trends. And I believe heartland real estate is one of the best long-term trends over the next 20+ years.

      1. I love your book so far. I .an immigrant and started saving late but am applying a lot of the stuff you mention in your book. I have a suggested tweak, if I may be so bold. You 10x the interest rate of dept to determine the allocation toward repayment in percentage terms. I would actually square it instead. I’ve spent a lot of time figuring out whether or not to pay back this or that debt and I truly believe any debt that is low interest should be left alone as.mucb as possible.

      2. Hi Sam

        You mentioned that you invested $810K in Fundrise and received $640K since 2017. The average (I use 5.5 years) per year would be $116.4K which translates to 14.4% annual return. I am also an investor of Fundrise and I don’t think any of their funds have this kind of high return. Could you elaborate a bit on this return rate you got?

        Also, what’s your opinion comparing CrowdStreet and RealtyMogul?

        Thanks. Really enjoy your writing.

        Jesse

        1. Hi Jesse,

          Not sure what Sam did with the distributions (re-invest, party, ?.), but if he re-invested, I am seeing something closer to 1.11% compound annual return. (not factoring in taxable events)

          — back of napkin —

          S=START=810
          E=END=(810+640)=1450

          G=GROWTH=E/S=1450/810=1.79%

          NP=Number of periods=5.5
          1/NP=0.18181818…

          CAGR = G^(1/NP)
          = 1.79^0.1818= ~ 1.11%

  13. This is a great measuring stick for me, just crossed one-year working full-time after graduating from undergrad. By most accounts in this article, I’m on/above schedule but already feeling a little burned out. The supply chain in the automotive has been unrelenting in the past couple of years and shows no signs of slowing down.

    Additionally, I’ve been taking roles that are high-stress/high-visibility due to advice from a lot of leaders at my company. One of your recent articles on prestige chasing has me reconsidering my priorities. At what point in your career did you stop taking on “stretch assignments” or specific jobs just for the clout?

    Thanks,
    Drake

  14. Oliver Doolin

    I’ve been following this site for a few years; I enjoy your work. I’ve been in financial services for my career but over the last 5 years have spent a lot more time in the wealth management field of finance.

    I noticed that in many of the wealth / net worth posts you have, there’s not much distinguishment between pre-tax and post-tax planning.

    I was recently attending a seminar that a client of ours hosts and the attention placed on how an individual saves and *where* those dollars are saved was incredibly impactful for how best to position for retirement.

    For example, if you save predominately in 401k’s for most of your life, you can find yourself paying more in taxes due to required minimum distributions.

    If you’ve tackled this subject in a post that I’ve missed, feel free to disregard and/or share a link.

    Thanks

  15. I wish this type of website and information was readily available at my fingertips when I was young. Thank you financialsamurai.com! I’m close to 70 years old, live in California, and I recall when 401(k)s first became available in my mid-20’s of thinking “Oh, I’m too young to worry about retirement.” I didn’t start investing in a 401(K) until around 36 years old or so. Life throws you a bunch of curves, though won’t go into detail with my story. As the saying goes, “best laid plans.” Also, my parents were of the “greatest generation” and lived through the depression. I grew up thrifty but cautious. I was not aggressive enough during the years of investing. I’m still working and have been maxing out by 401K accounts for some time now.
    Anyway, I, as a single, divorced individual (no alimony, I had to pay it to my ex for a time), have accumulated almost $755,000K in cash, $1,325,000 in 401Ks and an IRA, as well as have $750,000 in home equity for a rough net worth (not counting other things that can count toward net worth) of $2,830,000. In 2023 I’ll be 70, so I will get SS along with some small pensions since those started to phase out big time when I was in my 30’s.

    My purpose is saying all this is:
    1) I feel torn with feeling that I “should” be OK if I don’t crazy with spending so “good job” yet I also feel like I missed out on so much more $$ that could have been accumulated because I have been quite conservative in my investments and started later in life with the 401(k)s. I never used a financial planner. I have always been a good saver, but a divorce in my 50’s (I made more $$ than my husband) really put a lot of what was built up at risk and did set me back several hundreds of thousands of dollars.

    2) I encourage anyone I come in contact with that while “living for today” is great because life is meant to also enjoy when we can, think about the future, too, and don’t delay with getting a good financial plan going. Start now, if you haven’t. I never used a financial planner and feel if I consulted with a reputable CFP early on, I could have done so much better.

  16. Prospective Home Buyer

    I have been thinking about the rent/buy trade-off for many years. Finally I am at the time of my life where I have an opportunity (work, family, location, etc.) to consider buying. In addition to all the variables that often (necessarily) get simplified for general analyses, the thing I find most confounding to me is the concept of property taxes.

    Do you have any insight / analysis on this?

    For example, if I buy a $500,000 house and benefit from all the equity, leverage, inflation, etc. dynamics – and even pay it down in 30 years – I will still be on the hook for let’s say $12,000+ per year in property taxes, which is like $1,000 per month in rent. When I then add in maintenance and insurance, it seems to be a rather significant missing perpetual fixed expense from these analyses – and yet I wonder if I am missing / overstating the issue?

    1. Vitamin_Dee

      Completely agree with this question!! And taxes really add up over the lifetime of ownership, mortgage or not!!

      However, my own situation still costs me less money versus renting:

      Monthly taxes without mortgage: 800
      vs. Monthly rent at market rates: 3,500

      Of course this still required me getting rid of the mortgage in order to enjoy this savings…..no two ways about it.

    2. I am a landlord. I own 2 single family houses that I rent out. I include the cost of property taxes, mortgage, maintenance and repairs in the monthly rent charged. After all, a landlord is renting their property out in order to make a profit, not a loss.

      As a renter you are not avoiding the costs of home ownership (taxes/maintenance). Those costs are built into your rent in addition to a profit margin for the landlord.

      In the end, it is always cheaper to buy than rent.

  17. $750,000 is the MINIMUM wage in the NHL BUT MAXIMUM WAGE in the REAL WORKING WORLD!!!
    My lifetime gross income for 35 years is almost exactly half of what JOE THORNTON will make in ONE year ($376,000). Only about 75% of that is EARNED INCOME!!
    I have received NO INHERITANCE YET but still have a net worth of $600,000!!!
    LESSON: Get a good financial planner early and invest primarily in EQUITIES (especially AMERICAN)!!!!!
    $10,750+ per year!!!
    Do you know anybody who has averaged LESS than 11,000 a year for 35 years and is still worth $600,000 dollars without an inheritance or lottery victory???!!!
    I am going to average only a $9,000 gross the next FIVE years and fully expect to be a MILLIONAIRE (still without an INHERITANCE or LOTTERY VICTORY).
    COMPOUND INTEREST LATER ON IS BEAUTIFUL!!!
    It is time to contact THE GUINNESS BOOK OF WORLD RECORDS!!!

  18. In your blog you have mentioned the average net worth for all age group. Some people may attain this or some not. But I believes that one should save for the future because at some point they are no longer willing work. So start now so that you have enough for your future.

  19. 43, saved heavily and finally hit the 1 mil mark at 42 — felt like it took forever. Now at +2 mil. If this is an inflated market, we might need a new inflated above average person spreadsheet.

      1. I’m shocked too! I was overly cash heavy, deployed it all in March March 2020 during the covid crash.

        1. Sorry. I do NOT understand!!
          You deployed it from cash to equities?
          If you did that, you would have lost A LOT of money for the first month or so before getting it back??!!
          I do NOT see that it is at all possible for you to double your life savings in one year UNLESS you received a LARGE INHERITANCE!!!!!

          1. Christopher:
            Jealous much??!!
            It’s possible, I know because similar happened for me. No inheritance necessary, just a little infusion of extra cash into the right stocks at the right time. Some might call it luck, and I don’t mind. I call it a blessing for which I am very grateful.

                1. Know few folks who made 10x via TSLA in 2020. Just lucky—they did see their net worth increase by $1M YOY.

  20. My total gross income will be $420,000 for 40 years of work. THAT IS GROSS. This includes all jobs, EI. insurance, severance payments, self-employed income and CPP. I am still on track for millionaire status by age 65!

    I shall not receive any inheritance money or OAS until AFTER age 65. THE KEY: Get a good financial planner early and invest primarily in equities (especially American) to start. I am just as rich as DENNIS RODMAN and almost twice as rich as AMY JO JOHNSON!! Both have earned WAY more than $420,000 in their lifetimes.

    DENNIS RODMAN: 27 million gross income and a net worth of $500,000 at age 60. ME: right now: about $370,000 and I will have a net worth of $600,000 at age 60. My highest paying hourly blue collar wage: $13.50 an hour. That is 75 cents below minimum wage in Ontario today!

    1. I am a real health nut and at one time wore TWO sweatshirts:
      1) ME: 1962-21? (This implied longevity)
      2) MOXIE MUSIC WATER (This implied NON-MATERIALISM).
      Number 2 definitely helped with my financial portfolio!!!

    2. ya but how much fun(eh coke) did you have during the time. you’re comparing apples and oranges my friend. at the end of the day you are both going to be dirt(6feet under).
      just kidding by the way…but arrogance is stupidity.

  21. I have been reading your site for years but have never commented. Thanks for all of the good information/advice from you, Sam, and your readers.

    I am 48 years old and just today came across a “financial snapshot” I wrote almost exactly 9 years ago in 2012 at age 39. My asset classes have not really changed, except for one whole life insurance plan. The rest are the same.

    In March 2012, we had a net worth of about $496,000. $60,000 cash, $343,000 in IRA/401ks, about $80,000 home equity, $83,000 in a stock plan and $30,000 in 529s for our two kids (which shouldn’t really count). I still owed about $100,000 in school loans, which were driving me nuts.

    In April 2021, by just sticking to it and letting the market do its thing, we now have a net worth of about $2.5 million. $70,000 cash, $1.36 million in IRAs/401k, about $300,000 home equity, $451,000 in stocks (I sold a bunch to finally pay off school loans, so it would be higher–other than that, I am a buy and hold guy), $91,000 cash value in a whole life plan, $230,000 in 529s.

    Take out home equity and 529s and we have about $2 million, which I hope will grow to at least $6 million by the time I am 62 and can shut it down with no concerns. I figure if/when the market slows down, it will slow down for everyone so I will be all good.

    A friend of mine who was a few years older than me grabbed me by the scruff of the neck at one point and made me sign up for our company’s 401k and open an online stock account (when I kept saying I didn’t have enough money to save yet). Thanks to him, a somewhat early retirement is looking like a really nice possibility. This life thing is long, hopefully, so get involved in investing as soon as you can and keep up with it.

    1. I follow this thread, so noticed your post. I’m on about the same travel as you plus 9 years now 58, and now semi retired. It’s just worth reiterating what you said. Starting early and sticking to it make it work. Will be interested to see if Sam weigh’s in. Enjoy you time and enjoy the ride! The last 9 years have flown by.

    2. Well done Brian! Pretty amazing what trusting the process and compound growth and diligent saving and investing can do right?

      I’m pretty confident you will achieve your financial goals by 62.

      And in the meantime, enjoy life!

    3. You make my accomplishment look minuscule compared to yours BUT I doubt that you only earned a gross of $10,500 annually for 40 years!!!!!
      However, I do not have the responsibility of supporting a family.
      If I live to be in my mid 90s, I shall only have 2 million more than you would at age 62.
      However, I am fine with that.
      Yes. BUY AND HOLD IS THE WAY TO GO.

  22. UPDATE: My average annual gross income for 35 years (age 25 to age 60) will be $10,750. I expect to be worth $600,000 by age 60. From age 60 to age 65, I expect to average a gross of $9,000,00 a year. MY PLAN: $800,000 by age 62.5 and $1,000.000 by age 65

    1. Again, START EARLY WITH A GOOD FINANCIAL ADVISER and LEARN FROM YOUR ADVISER TO HAVE SOME OF YOUR MONEY IN AN ONLINE ACCOUNT TO ENJOY LOWER MER FEES.

  23. These calculations look very reasonable. I just made 42 and am above your number, all in my investment portfolio. The argument whether you rent vs own and thus build implied RE equity seems to me very individual. I have looked at this question and for any reason renting for me personally looks always financially beneficial vs the rates of return I had been able to generate on the investment portfolio. May be because I am single and live outside the US

    1. Robert Ruschak

      My goal is to boost my current net worth by 1000% within five to ten years from today!

      Great content

            1. It depends what your baseline is, obviously. If you have 10k net worth, then getting to 100k in 10 years is a totally reasonable goal.

            2. Easy, for many, if you’ve been spending all your money and you start saving you could easily increase 10 x in 5 to 10 years.

  24. Fit Financial Coaches

    I love bullet point #4 in what defines an “above average” person. Taking responsibility for your actions (or portion) when events go wrong is a critical piece in building success no matter what your objective. When you apply this lesson in all areas of your life, you are implementing part of the foundation to achieve your goals!

  25. We are early in our retirement ages 39 & 44. I would like to check in to gain more perspective, wisdom and knowledge.

    I am a veteran receiving ~40k a year with COLA adjustments and healthcare currently not working. My plan is to start working once our children are able to attend day care. My spouse makes ~200k a year currently. Assuming future raises with some rough math final pay would be ~240k at retirement. Our heath care will be supplemented in retirement. My spouse is pension eligible from two jobs, the highest paying job, we are considering 60% of her final pay to set a retirement date at age 60. That would yield us ~130k a year in retirement before taxes, health insurance etc. The second pension would bring ~6k a year. We will also have a rental property that will yield ~15k. To recap we will have 130k+40k+15k+6k=191k of guaranteed income in retirement.

    Our primary mortgage will provide at least 1M in equity during retirement. We have no debt other than our mortgages.

    My spouse is saving in a pre-tax account and we are both are saving in our Roth IRA’s. We are so far away from retirement it is impossible to say what these account balances will be. We have chosen to send our children to private school until they reach middle school age which prevents us from my spouse maxing out her pre-tax retirement account.

    My first question is about SS. We are considering delaying SS until age 70. The research I have done predicts 48k a year pre-tax for my spouse. I did not factor my SS in at the moment because I still have earning years to gain. At age 70 with 191k in taxable income then brining in ~48k in SS.

    I do not understand how SS works exactly. How much of the SS will we be gaining with it being taxed at 85%?

    My second question is about withdrawal strategies. We will have pre-tax, taxable and Roth IRA’s. For simplicity let’s assume they are all equally funded. Being locked in a high tax bracket due to the pensions. Which accounts should we draw from first? Should we save the pre-tax accounts until age 72 (RMD) or is there a more tax efficient way to manage those accounts?

    We are so far away from retirement I am hoping to avoid any pitfalls as early as possible. Wisdom is always welcomed.

    Thank you for your time.

    Best,
    Too Early to Know

    1. I think you are in plenty good shape! Wish I was where you were. How’s it look if you wanted cal it quits at 55?

    2. a fantastic social security calculator is at opensocialsecurity.com

      good luck to all and happy holidays

    3. Still figuring it out

      Just want to make sure of one thing: you mentioned SS “being taxed at 85%”. SS is not taxed at an 85% tax rate. It should be understood that after you reach a certain AGI,up to 85% of your SS benefits become taxable income that will add to your tax liability at whatever tax rate you’re in. This may be what you meant but I just wanted to clarify so no one thinks that they’re losing 85% of their SS benefits to taxes.

  26. I wold love to talk to you about how to create wealth and specifically a guideline about what price range my house should be if i am looking to buy. I am 47 and have a net worth of 7 million. I would be happy to share strategies. First being how can a person pay $3 for bottled water at Starbucks when they give you free ice water if you ask.

    1. If I could have guessed 30 years ago that you could sell essentially tap water for $24 per gallon while polluting the earth with plastic, I would be worth billions, or Coca Cola.

  27. Green Field

    May I ask how you can qualify for a low rate of mortagage without W2 income? Is it possible to refinance and cash out from your investment properties? Have you used Credible yourself or it is your sponsor? Thanks.

    1. I’m not an expert, but the rate may be higher without W2 income, if you can even get a loan. You will have to prove income over several years on your tax returns. Catch 22: for tax purposes, you want to show you are losing money. You can cash out from investment properties, but the rate from cashing out and investment properties is higher, probably 3/4 percent or so. And, your payments will go up on those unless you had a higher rate to begin with. Cashing out is probably not a great idea unless you need all cash to pay cash for distressed or auction properties. Most other sellers don’t care whether you pay cash.

  28. Hey Sam,

    Just realized freshly hitting age 29 I’m too cash rich (because I’m trying to buy a house in the Pacific Northwest but have a couple months before hitting 6 years in the workforce). Will be putting 20% down (split 10% each between my partner and I). I will hit your net worth target for age 30 but I’m worried I am somewhat misallocated as 50-60k of my worth will be equity in the home and I’ll be keeping a 10% cash buffer of the home’s value for emergency purposes with the rest in Roth and 401k accounts invested aggressively in equity indexes. I figure I have a long time to work so dollar cost averaging will continue to serve me well. Do you have any suggestions for how to optimize my situation so I can keep hitting these benchmarks? I’m maxing my 401k and Roth IRA and will invest even more in the equity markets once the house is purchased as I will hopefully not need to accumulate that much cash again.

  29. I used to think this was much harder to achieve, as I was a late bloomer and didn’t start my professional career (nursing) until I was 26, and at the time had close to $100k of debt. I’m now 32 with a net worth roughly $550k, so it’s totally doable, and also possible to catch up for late bloomers like myself. I’m lucky that I’m childless and single, so that does decrease my cost of living significantly. With that said, I hustle my ass off and don’t spend frivolously. I work a normal 8-5 M-F job, I rent out rooms on airnbnb, and I rent out cars through touro. I also work an extra job 2-3 Sunday’s per month. All this side hustling has let me save close to 100% of my “real” income for the past few years, which is making me think retiring early, or at least only working part-time because I want to is a serious possibility.

  30. The low end of average net worth doubles between 30 and 35. Not sure how people can save $50k when also having expenses such as young children, weddings, and house buying costs

      1. Christopher

        Financial Samurai

        Good morning

        This is my first foray into a discussion forum!

        I have been reading your site and “The Balance” on and off for a few years now.

        It seems to me that the most important thing about net worth and income management is the correlation to your overall retirement lifestyle after leaving the work force.

        I wanted to suggest or inquire about the possibility of someone creating a after retirement income calculation that does the following:

        Calculate your total annual garantied retirement income potential based off your different streams of income and thereby deriving your actual net worth versus your perceived net worth.

        I would see the following included:

        Pensions
        Annuities
        Social Security
        Military retirement
        Disability
        Medical care/insurance
        Life insurance

        I currently receive an annual Military Retirement (pension) of $26,000.00.

        I equate the governments holdings to fund this pension as an annuity and thereby associate it as a source of my personal net worth.

        However, depending on two separate calculations I have recently read it can be worth $450,000 or $1,019,607.00 in net worth.

        If health and life circumstances hold to our current plan I expect our household annual retirement income from pensions alone (1 military pension, 2 Federal pensions and 2 Social Security pensions) to be approximately/estimated at $157,000.

        Based off the 2 current pension calculations the net worth could range from $2,358,000 to $6,156,862.

        Obviously these numbers have a significant disparage when it comes to determining your actual net worth and the leverage you have when discussing investment opportunities.

        This does not include any of my other recognized standard assets which can be transferred as an inheritance to others.

        CD’s
        401K
        Cash
        Property

        With the new normal of extremely low interest rates I think your younger readers might be motivated to serve in the military and government employment if they understood the significance these pensions can have on their final retirement.

        I enjoy the online calculations but most of them do not go into details in regards to how pensions should be calculated.

        I generally have to use the income calculator to get a futuristic look at real buying potential.

        Some of The pensions are indexed to inflation or close to it so the buying power is greater than other assets.

        I enjoy your site in regards to finance information (Polar opposite to your Political positions.)!

        Regards
        Chris

          1. Sam

            Good morning

            Your site is mostly about financial matters which is why I appreciate and enjoy it.

            The pension equation you posted is the one I was using that determined the high end of the expected net worth. I do believe it is more accurate than the one that uses the $100 monthly income x 18,000 which is the one I used for the low end of the net worth and is likely the one used for traditional Annuities.

            The government systems that have to support lifetime benefits can not guarantee them if they use the more risky investment options.

            I believe your use of 2.55% is a fair assumption for current market conditions.

            I am personally fortunate that the government has to accept the responsibility to amass and maintain well over $6,000,000 plus adjust accordingly with future inflation to fund my projected retirement.

            My personal responsibility comes down to funding the additional $2,000,000 plus I want to secure my quality of retirement life in addition to that.

            Thanks for the response and interaction!

            Chris

          2. Sam

            Good Morning

            I would love the Opportunity to converse with you in a one on one private relationship.

            You perplex me!

            But you are intriguing!

            Regards
            Chris

    1. Marvin L McConoughey

      Our wedding cost $12 for the license, $100 for the Justice of the Peace to say the legal words, and whatever our motel cost for the night. Our only witnesses were the official, his wife, and their dog. We then embarked on our honeymoon, which was a trip across Canada to introduce my wife to my family, meet her family. We then continued on to my next work assignment in California. We have not had children, and rented because the military moved me frequently, and covered most of the rent. Children are great. They are also a luxury expenditure which is optional for each person and couple. Freedom to make one’s own choices is the best asset of all.

  31. Are these numbers per person or per household? Ex: should I be doubling these numbers if I’m married, etc.

    Thanks,

    1. For me (look below), it is per person.
      I am not married.
      If I were, I would surely be worth as much as JOYCE DEWITT is from THREE’S COMPANY (4 million dollars ) by age 75!!

  32. How do you treat HSA and contribution to 529?
    Is HSA a component of pre-tax saving?
    Is 529 a component of post-tax saving?

    1. HSA is actually pre-tax AND post-tax if you spend it on healthcare costs. 529 depends on the plan. It’s post-tax for the gains if you spend on education. Some states give pre-tax benefits to their 529 plans as well. Georgia I know does this.

  33. Great post – thanks for the content and direction. I am 25 y/o and working hard to accumulate wealth now so I don’t need to worry about in down the road.

    Forunate enough to have a six figure income and live below my means with no debt (GOD BLESS). Current assets as follows:
    – $50K in an S&P 500 Vanguard Fund (VTSAX) at the market lows of this COVID-19 dip. Contributing $18K annually to this fund I am expecting to have $150K by 30, $325K by 35, and $1,000,000 by age 45. (assuming 8%-10% return)
    – $75K in Roth 401K with a 15% annual contribution and an 11% company match (highest match I’ve ever heard of) (estimated $25K total annual contributions) (currently all equities)
    – Actively growing the checking account ($30K estimated now) with plans to buy my house with this and not touch my Vanguard fund.

    I feel like I’m on the right track and plan to increase my income over the years (management, director, etc.). I REALLY do not want to work until I am 60 y/o.

    Any tips/feedback for accumulating some serious wealth would be appreciated

    Thanks!

    1. I think that you have already accumulated SOME SERIOUS WEALTH.
      You definitely will not have to work until age 60!
      I retired at age 55 after 30 years of barely a five figure annual income but I do consider myself to be NON-MATERIALISTIC.
      Look at my comments below.

    2. Good Job! For the money you’re saving for a property, I suggest a Money Market Account with higher interest rates, such as Ally or Capital One 360 Performance Account? It’s liquid but still earns some interest (used to be 2.0% but now around 1.5% because the Fed).

  34. The major cause of “failure” for the above average person is at some point declaring victory and quitting the game. This can be done as early as your age 30 numbers, although many would consider 40 more comfortable. After 40… unless you’re job is genuinely your hobby and passion, there’s little reason for most to keep working just to accumulate at such a rate.

  35. My total life gross income (self employment, employment insurance, pension and regular jobs) from age 25 to age 65 will be about $400,000.
    That is right ($10,000 a year).
    I still expect to be worth $1,000.000 by age 65.
    LESSON: start early with a good financial adviser!!

      1. Thanks Eric.
        For the record, I plan on doubling my net worth every 10 years. THE PLAN:
        $125,000 in my mid 30s, $250,000 in my mid 40s, $500.000 in my mid 50s (where I am now and solely leaving on a pension), $1,000,000 in my mid 60s AND ASSUMING I LIVE THIS LONG: $2,000.000- mid 70s $ 4,000.000-mid 80s and $8,000.000-mid 90s.
        I can keep doubling in my older years because I am expecting to live off some inheritance money and of course the addition of OAS at age 65.

        1. Relying on an inheritance is a very risky strategy. Illness and assisted care can be very expensive, so can living much later than anticipated, which can drain any inheritance. Plus, you have no control over how someone spends what you think is your inheritance. Seen it quite a few times. Just be careful. Proceed as though the inheritance will not exist. And if it ends up happening, great!

          1. Thanks for your advice Steve.
            In my case, I do not think that I will have a problem.
            My Dad was a lawyer/judge and has an excellent pension.
            My Mom was a social worker and has a good pension.
            I was a musician/carpet and upholstery cleaner/factory worker/flyer inserter and janitor and have an average pension.

            AMONG ALL THREE, I AM LAUGHING!

        1. I think that you can have it both ways.
          I applied what I learned from my financial advisor and have my own small online account (buy and hold forever and enjoying smaller common class MERS with my ETFs) in ADDITION to my account with my advisor (buy and hold with occasional tweaking).
          I personally don’t have the time to research as intensely as my advisor.
          With my current situation, I still plan on being worth $2,000.000 by age 75 ( I should live at least this long) even though I shall only have a lifetime gross income of $500,000 ( a small+) for 50 years.

    1. True. My self-employed hourly income as a self-employed (mostly jazz bassist and guitarist) was above average (15-30 dollars an hour) but it was a VERY minor part of my total income.
      JOBS: A 5 dollar an hour carpet and upholstery cleaner and salesman.
      A 7 dollar an hour factory worker
      A 8+ and hour janitor and flyer inserter.
      A 8.50+ 9+ and 10+ an hour flyer inserter
      An 11, 13 and 13.50 an hour janitor.
      You should note that minimum wage in ONTARIO IS 14 DOLLARS AN HOUR AS OF MAY, 2020!!

  36. After reading many of your articles, I am genuinely curious how an average person is supposed MAX out their 401k and some how magically save up for invest in RE and still figure out to pay rent and live some what of a life. Could someone please explain to me how this would even work ? I feel like something needs to be sacrificed, Im not a doctor nor lawyer nor someone that makes over $100k.

    Any advice would be appreciated.

    1. You have to start somewhere. Not everything is going to happen at once. Start with maxing out your 401k. As your income, experience, and net worth grows, then start to save more and more in your taxable investment accounts. Then you should consider taking on side jobs to boost your income to save and invest even more.

      How old are you and how much do you think? How many hours a week are you working?

      If the amount of money you are saving and investing each month doesn’t hurt, you are not saving and investing enough.

      You have to get your housing,
      Food, and transportation cost to a minimum eg 30% total of gross, so you can save and invest the rest.

      If you are interested, you can join my group of folks who wake up at 5 am to work until 7:30 am each morning before work or our children wake up. After one year, you will have worked ~ 1,000 more hours than someone who doesn’t. If you do, I’m SURE you will get beyond the average net worth.

      Related: https://www.financialsamurai.com/achieving-financial-independence-on-a-modest-income/

      1. Charles conrad

        You will find the older you are the less money means. Go spend $100,000.00. You can afford it. You’ll never miss the money. You won’t be able to do it. The money means nothing and yet you will not be able to spend it.

    2. The part that left me genuinely stumped was the assumption that the “above average” 40 year old had 125k saved (on the low end) in addition to maxing out retirement accounts for 20+ years.

      Just found the site and have enjoyed some of the articles, but some of them appear to just be humble-brags without much real advice.

      I would love to see a breakdown of your budget while saving up for retirement, or even just example budgets for given areas of the country.

      1. I’m 38 with a net worth of 1.3M. Not everyone can be above average just by saying they are. It’s years of sacrifice and intentional drive. I’ve worked at least 2 jobs most of my adult life between day jobs and a string of startups. Day job success combined with startup acquisitions have helped me climb the corporate ladder quickly – I’m currently an exec making $300K, and I *still* have a startup on the side because an above average person’s (as defined by Sam) drive never goes away.

      2. And the assumption that a 40 year old has worked and saved for 20_ years is silly when his definition of the above average person in question includes them getting a college degree which, in almost all cases, means they had no income (and in fact most accumulated debt) until 22 or 23 years of age minimum.

          1. your charts are wrong. you didnt ask the lower class. Have you heard of no child left behind? in Charles county Maryland that means cliff notes and answers written on the white board..

            1. Thanks for sharing. I can also write a post about the average net worth for below average people. But I think it will be met with anger and ridicule.

              Besides, the goal of this post is to shoot for higher net worth levels.

      3. Gary

        I am a 50 year old male whose first hand shake agreement to work was at the age of 11.

        I began actual work at 16 and my first job was on a horse farm working 75 hours a week at $4.00 an hour.(no time and half for farm work!)

        I was forced to leave my family and home at 17 because the 2 bedroom apartment my mother could get would only allow for two children of the same sex to share a room. (So by default due to a numerical sense my twin 18 year old sisters were the logical choice to stay with my mother.)

        I began paying rent to a friends mother half way through my Senior year of high school in order to graduate!

        I entered the Marine Corps on September 12, 1988. (Earned app. 700.00 a month after GI bill Contributions and taxes.)

        Got married in 1995 with approximately $3,000.00 in our joint holdings. (Best decision I have ever made in my life!).

        First major financial decision was to purchase a new home in Fallbrook, California in early 2000 for app. $220,000.00. (Sold it in 2004 for over $500,000.00)

        Lessons learned when buying property in Key developments:

        1. Buy in a cul-de-sac
        2. Buy the largest floor plan in the development.
        3. Improve the property to professional level standards, but do the work yourself.

        Examples:

        Use textured paint inside the residence preferably earth tones no exotic colors.

        Install sprinkler system for the yard.

        Lay Sod versus seed where applicable.

        Build Stone walls with Wrought Iron fencing to see through.

        Pour concrete patio (Use colored concrete versus standard gray.)

        Do not plant to many shrubs or trees! (Open space outside is your Friend.)

        We used the profit to purchase and establish a business (Quizno’s)! (Great Experience but to many hours for the gain and the corporation was unethical in practice.)

        Sold out at cost no skin lost!

        Decided to seek ongoing federal employment and will be relying on Federal Pensions for retirement. (Maxing out TSP contributions and if we maintain a 6% average return will likely be at approximately $2,200,000.00 by retirement)

        Final annual income should be between worst case $220,000 and best case $300,000.

        We do not follow a budget at all, parents all passed away before 71 and 3 of them before 55!

        I let my wife buy anything she wants and contrary to the normal advice you get from most on this site we have driven a BMW X5 since 2004.

        Why strive to make a lot of money just to hide in the shadows until you die worrying about the possibilities of evil people taking it from you!

        When buying a car always upscale with the next purchase and never buy because you have too! Buy “silver” scratches are not noticeable and it will always look pristine even after 9 years.

        As a Marine it may be a little obnoxious for me to suggest to other people not fear the evil that lurks around every corner!

        But having survived poverty bottom 5% percentile and managing to get into the top 7% percentile of household income/net worth I feel pretty confident that this advice holds true to establishing a solid financial base for everyone to attain.

        Bottom line pay no one for anything you can google to do for yourself!

        Do not gamble!
        Do not Lie!
        Do not steal!
        Do not cheat!
        Do not Divorce!
        Do not support Trafficking of persons activities such as prostitution, and strip clubs!
        Do not drink to excess!
        Do not curse your spouse!
        Do not believe in others over your own judgment!

        Do work an honest days labor for the wage you have accepted!
        Do invest in TSP if able!
        Do have compassion for those who lack your capabilities!
        Do Love your your spouse/significant other beyond even yourself!
        If you have a beautiful wife have no/or a limited number of friends!(All men want your beautiful wife whether they are your friend or not!).

        Trust yourself more than anyone else but listen anyway!

        Hope this is detailed enough for you and others to use for potential success!

        Regards
        Chris

        1. This advice is 100% legit. I love it! I would like to humble brag that I started at 25 with a duplex that I bought and lived in and then rented out. I ended up renovating about 6 apartment buildings in all (larger than a duplex) and sold them together, 10 years later, for a substantial sum. I also started an international magazine and was getting a decent 6 figure salary (and bonus) and have ownership that I can sell if I need to. My wife started a private practice and gets to keep everything rather than giving it to a nameless/faceless hospital and only works 12 hours per week and spends the rest of the time with the kids, shopping and vacationing. She makes as much as a doctor and works far less than that.
          I also bought and maintain 3k acres of oil land with hundreds of producing wells on it. I have a patent on a device that cleans waste water used in fracking that actually improves the environment.
          I own a digital marketing company and art dealership.
          We even take about 6 nice family vacations a year all because we didn’t want to work for someone else.
          We invested and believed in ourselves. I’m above average intelligence but my wife is profoundly gifted (IQ was tested by psychologists via Weschler and Stanford-Binet at age 13). Either way, we are normal people who worked together to achieve more. My best advice is find someone who believes in the ability to create what you want out of life and truly believes it is possible. You will go much further than those who dare to dream or don’t have support. Yes, we’ve had our share of setbacks and dirty players who have scammed us but we’ve always tried our best and did our due diligence and trusted our intuition. When I say intuition…I mean it! We would pray and ask for signs and get them as to what we should do. Even those who scammed us came crawling back and gave us what they owed us plus more.

          We never tried to cheat anyone or steal anything…in fact, we were often prey to the single Mom sob stories who ended up selling drugs out of our apartment and sell our appliances before leaving town. We were actually glad that happened because that is when we decided to sell our properties and then found a buyer days later for the whole portfolio.

          My wife just turned 40 and we can retire if we wanted but we are having too much fun. We are going to buy some vacation properties to rent in our favorite locations so we can go there when we want.

          Good luck to everyone and I hope this story is an inspiration as all of the others surely are!

  37. I thought this wasn’t true and made a point to prove otherwise, because I really want it to be true:

    “I’ve tried to keep things as simple as possible, assuming no inflation and no investment returns. I also believe saving $5,000-$15,000 a year in after-tax income is very realistic for the above average person, and probably very easy for many who earn more than $85,000 per person.”

    Unless expenses are high, this is true!

    I’ve attempted to make my own tax withholding estimator to no avail to help me budget and figure this out. In case anyone is interested in seeing how changing your 401K or IRA contributions affect your paycheck, here is the link:
    https://apps.irs.gov/app/tax-withholding-estimator-2019/results

    As it turns out, a large 401K contribution means the potential of many more exemptions and you can try to break even by using the calculator (not owe or receive a refund). I also consulted a gross paycheck calculator as I wanted several independent sources before coming to a conclusion.

    Now, I’m not convinced renting is throwing money away. I think it depends on the circumstances. I agree with much of the guidance from this link : affordanything.com/is-renting-better-than-buying-should-i-rent-or-buy/

    Basically, price to rent ratio:
    If a house costs $500,000
    And rent is $2000 a month

    $24,000 annual rent/$500,000

    This equates to 20.83 P to R

    “If the P/R ratio is greater than 20, hesitate before buying the house.
    If the P/R ratio is greater than 25, don’t buy the house unless you have strong non-financial reasons.
    If the P/R ratio is greater than 30, run screaming in the other direction.”

    In my area, houses cost around 900,000 and my rent is under $2,000. I will stick with rent and invest the difference. While you can buy for less than 900,000 it is the sweet spot where there are great public schools, realistic commutes and decent sized homes. Factors for great resale value.

    Unfortunately my income doesn’t enable me to purchase a 900K house at this time (even with a 200K down payment my mortgage would still be close to $4000).

    1. Joseph R Nelson

      May I ask what general area jt is that you stay in
      State? Town? Providence? Zip code? Neighborhood? The closer the better but I dont mean to pry so whatever your comfort level is…
      Thank you

  38. Am_I_Delusional?

    52 years old. Considering a buyout from employer that would give me about $484K in taxable savings plus about $960K in 401K. Can start a pension right away at $52K annually. No debt at all including home. Need to have about $90K to spend and would like an additional $25K available on top of that. Am I delusional to think I might be able to take it and retire early? Wife earns $30K and will continue working until probably 60 or so.

    1. My musings / thoughts – the big ticket item is healthcare – can you get on your wife’s plan? Otherwise, you’ll have to factor in a nice 5 figure annual expense for yourself, double it if your wife doesn’t have group insurance….. Big question – do you want to “spend it all” or leave an estate? That will determine how much you can withdraw annually from your retirement accounts. If you start withdrawing 3% from your nest egg, that’s $43K on top of your $52K pension – That gets you to $95K; are you including your wife’s salary into your equation as well? If you haven’t done a detailed income and expense analysis that plots out every year’s income sources and expenses for both of you until death, you need to start there – down to every last dry cleaner ticket, driver’s license fee, and cat food bill. Anyway, sounds like it’s possible, but tight – factor in a cushion – maybe start a side gig or part time at Home Depot…. …and do you have a plan as to what you want to do? Hobbies, travel, golf? I can state from experience that all the house projects get done pretty quickly….. Best of luck – look at it this way; you’re in a good position regardless…. count your blessings….

  39. Very useful.

    If you spend your time comparing yourself to the average, many people will be quite content with where they are at.

    If you spend your time comparing yourself to where you *could* be (if you put in the effort), then not only are you not competing with others, but you have raised the bar drastically.

  40. Good rough estimates but room for improvement

    1. Real estate equity should factor in selling costs as they are substantial @ 5-7%
    2. While 30’s are often your peak income growth period, it is generally not viewed as an accumulation post-tax period due to Child care & family costs. Most savings occurs in the 40’s and not your 30s. 30-35 having a savings of 50k while 40-45 only 25k should likely be reversed.
    3. Also, is post-tax accounting for market appreciation? anything over a buffer of (10-20k) should be invested and appreciate.
    4. There are issues in your rate of change for your retirement. Since retirement is capped the high end earner shouldn’t be receiving a higher percentage than mid or low.. for example, age 40-45. Low increases +50%, mid +45% and high +67% –> High should be much less –> by 40’s everyone should be maxing out, this would imply that the tier’s have a different rate of return

    DQYDJ also has a good calculator to see where people stand up to others nationally.

  41. Can you please clarify in your net worth calculation if you are including real estate owned? I assume you are. So in order to calculate the true net worth you would take how much the property is worth and subtract what you owe on the property? For example I own a property worth $370,000 but owe $136,000. So that is $234,000 I can use towards my net worth. Thank you.

  42. The average net worth was for a household.

    In the modification to above average it refers to a “person”.

    Do you mean for this to refer to a household as well? Or do you believe a married couple should have double the amount you calculated?

  43. I am 64 years old and retired. I have a pension that pays me, after taxes, currently $3155 a month, and a monthly social security payment that pays me, after taxes, approximately $1600 a
    month. If I lived to 85, which I believe I will (if not longer, with my family history and health habits), I believe my pension is worth at least $795,060, and my social security is worth at least $403,200. Should these be counted as part of my net worth? Seems like they should be…

    1. First of all, congrats on retirement – I’m jealous. In regards to net worth, it’s normally calculated as a current snapshot in time and does not include future potential income or benefits. For example, if you applied for a business loan or a commercial property loan, “net worth” is captured as current assets minus current liabilities – they would not allow you to include those future sources of income. So by definition, no. But from your perspective, as long as you are alive and kicking, that’s your minimum net worth over your life span assuming you make it to 85 – if you save some of that income and invest it annually until you pass away your net worth could be considerably more! My 2 cents…..

      1. Thank you for your input, Jeff. As you pointed out, I am kind of looking at it from the perspective of “how much of an investment/nest egg would I have to have currently to give me that kind of monthly income for 21 years? So, for me, it’s sort of a part of my “net worth,” Although I know that, technically, it’s doesn’t meet the classic definition of net worth. I am very lucky to have what I mentioned be a significant part of my retirement income/assets.

        1. Michael, one way to capture the solid (hopefully) SS payments is to spreadsheet out to age 85 (probably age 92 would be best for you), assume a 1% increase annually, and then do a Present Value. Add this to your current net worth. I know this is not in the classical way of figuring NW but it would give you a good marker.

          1. I just saw this. I disagree with the replies above. I would say yes, The present value of the payments you are receiving should definitely be considered as a part of your net worth. I just use my safe withdrawal percentage and use that to come up with a value. The entire point of figuring out net worth is to determine how much you can safely withdraw without running out of money. So if you use the traditional 4% withdrawal rate, 946,500 dollars. 3,155 / .04. Would be the amount your pensions are worth. Your calculations give it a 4.8% withdrawal rate which is fine. I would do the same with social security as you have done. When you have streams of income, it allows you to take on more risk with your other assets. They represent your phantom net worth, and certainly have value.

            Just as some people don’t include primary residence in their net worth because you can’t withdraw from a primary residence (unless you downsize) some people may decide not to include the value of pensions or social security. If you take 500,000 dollars and buy an immediate annuity, do you not include the 500,000 dollars in your net worth. Of course you do, you just bought a stream of income that has value to it.

  44. Edmund Honda

    In the returns for property, u write
    10-15% compares favorably to the average S&P 500 return of roughly 5.6% from 1999-2018 and 8% – 10% since 1926.

    What about the mortgate rate, home taxes, maintainence that otherwise a renter does not need to pay?

    1. It’s negated by the rent the homeowner does not need to pay by not being a renter. The return on rent is always -100%. As I’ve gotten older, I’ve tried to earn income more passively. This is why I sold one SF rental property in 2017 and invested $550,000 in real estate crowdfunding to take advantage of lower valuations and higher net rental yields in the heartland of America. Fundrise is my favorite real estate crowdfunding platform. It’s free to sign up and explore.

      Related post: Average Returns By Asset Class For The Past 20 Years

    2. Rebekah Kondrat

      I agree with Edmund here. I live in NYC with my family of 4 and my husband and I make a decent wage, yet there’s no way we could afford to buy here. Renting is half the cost of what a mortgage would be not including the property taxes and upkeep.

      For some like us, it just doesn’t pencil. The market is a more favorable place for us to invest and that is where we put our money. Maybe someday we’ll buy, likely when our kids are grown.

      1. It generally never make sense to buy property for the first two years or so as renting is always cheaper. But over a ten-year period, owning in a superstar city like NYC Will likely prove to be a good investment if history is any guide. The return on rent is always -100%. There’s no guarantee that you’ll make money buying property. But at least you have a chance.

        Property ownership is a lot about your time horizon. I like Property because it doesn’t take much brains, it provides utility, they can generate rent, and you pay down the mortgage overtime.

        1. I am not a experienced investor but with the little I know property is a huge investment and illiquid; buying the wrong one at the wrong location at the wrong timing may cost one some hard-earned money. To me, it needs a lot of knowledge of the market and probably some luck! It needs lots of brain!

          1. Realestate is a no brainer. The average return of purchasing your own home over 30 years is 20 x the s&p 500 if purchased through F HA

      2. You may want to consider outside of NYC, but closer, perhaps Hoboken, NJ?

        Prices there have cooled off a little, and what you would get for your needs will likely be better. Only factor I can think off which would not work for you is schools.

  45. Nordic Fire

    Good article. But we have to remember that average is just an average. There are many people on both sides of the spectrum, and the variance is big.

    – Nordic Fire

  46. This is a great article and one that has been saved in my favorites for several years.

    I do have a suggestion for improvement. I recommend that deferred taxes on pre-tax savings be adjusted downward for deferred income taxes (Federal and State). I assume 30% of my 401(k) and Traditional IRA balances will be paid to the government and therefore should be backed out of my net worth.

    Thanks for the great article.

    1. Hi Ernie –

      I hear what you are saying, and that’s a conservative and prudent thing to do – but that assumes you are paying the taxes in full this year (or the following year on April 15) – when in fact, those taxes won’t (can’t) get paid out until you retire, and then only on the annual RMDs – which could take 30 years. I get it – IF for some emergency reason you had to pull out those tax-deferred savings today, you’d take the hit (including the 10% penalty) – so your net worth today is something less than what is showing in your portfolio. But making the grand assumption that you’ll be earning 3% – 4% even on the most conservative portfolio, your net worth on your tax-deferred portfolio today in reality is a huge understatement, even without taking taxes into account….. In reality, the only time that a net current value of a portfolio is used is if you are using it to qualify for a loan or mortgage – and the banks automatically net off taxes from your retirement balances, so if you are filling out a PFS, don’t enter a pre-calculated “net” number yourself, because the banks will do it again automatically – you don’t want to get hit twice….

  47. I have visited your website a few times over the years. However, I never knew the story behind “the financial samurai.” Today I read an article on CNBC about you. I must say you are the first young individual that I have read about that retired without “cheating.” What I mean by “cheating” is that you didn’t make any drastic changes to your life or had a significant head start in life because of your parents. I read about people who retire in their 30’s by living on only $30-40K/year or living in an RV. You did not do those things. You retired early with a healthy income that lets you live a nice lifestyle. So I commend you. I also commend the fact that you come from an average background.

    My story is similar to yours. I’m currently 34 and worth a bit more then $1.5 million. My background was more disadvantaged then yours so I had a bit of a handicap when I started. I come from a very low income family, English in not my first language, I immigrated here when I was younger and my parents taught me no practical skills growing up. Because of the environment I grew up in and the type of friends I kept I graduated high school a year late with only a 2.4 GPA. I had no plans to go to college.

    Luckily I decided to get my act together and started to get serious about becoming financially secure at 20. I’m on track to retire by 38 with a net worth around $2.2-2.5 million. My income from that will be approximately $95K. My income could be even higher but just like you I don’t want to sacrifice too much. Therefore, I’m keeping my big house (its paid off and $500K of my net worth) and my nice cars. Otherwise, my income could be higher since a lot of my income comes from real estate which generates higher returns. Anyway thanks for sharing your story with the world. It makes me realize that there are others out there like myself who got there without “cheating.”

    1. Frank Moolah

      I second that. I’m 33, and although I don’t have a high net worth at the moment, I’m on the path to making that a reality by the time I’m 40, and I too also dabble into real estate. The only reason I’m here was b/c I read the CNBC story and was curious to check out Dogen’s website, and clicked on this story which depeicted Yao Ming (basketball player) on the thumbnail. Good luck on your journey, and see you on the other side.

  48. David Michael

    Interesting article. During my working years, I always tried to stay in the top five percent during the 1960-1990 era. Now, of course, that would not be feasible for most of the working population. Our country has changed radically and not for the better in my opinion. Now that I am in my eighties, I do read the obituaries. Many of my friends have passed away, rich, middle class or poor. Many are in care facilities having lost their eyesight or memory. Fortunately, my wife and I are still in excellent health and very active as we were in our 50’s and 60’s with no limitations. But in the end, we all die. So, all of this focus on money and earnings seems to bypass one of life’s lessons: focus on the journey and not the destination. Be Kind to one another. Even with a net worth of $200,000 in the USA, one can have a great life.

    1. Well said. At 56, even whole heartedly agreeing with your perspective of enjoying the journey, I do feel some diligence regarding personal finance deserves a slice of my attention. I guess it’s all about balance. My parents were fortunate to have good health and have no financial concerns having a GE pension and having been good savers throughout their lifetime. My generation and those as young as this author are more on our own, and it creates some anxiety. Bottom line, I applaud your comment. As you note, we all will die one day. Still, I hope that by giving personal finance it’s slice of my life today, and by staying informed, I will be as worry free as you are if am as fortunate to have my health and live into my eighties.

    2. God bless you Michael. And may god continue to grant you and your wife a healthy life. As I said in my earlier post I’m only 34. Having good health for me and my wife at your age would be a dream come true. Congrats on all your accomplishments and I wish you all the best.

    3. Michael,

      If you don’t mind my asking – what is your approximate net worth in your 80s and what was it in your 50s? Do you have income coming in from pensions, social security or other?

  49. Anyone who is upset about not being above average, don’t sweat it, especially if you have graduate degrees. There’s still plenty of time to “catch-up”. I’m turning 31 in 2 days and am right around $300k net worth. 5 years ago when I was about to turn 26 I was negative $70k.

  50. Brian Weitzel

    Sam,
    This article changed my life when I first came across it years ago. Without sounding conceited, I was already following all of the other financial advice like saving and investing, but there was no way to tell where I was relative to top earners. Then I came across this article and it has helped me put my net worth and efforts into perspective. It lit a fire under me and pushed me to make moves and strive more. I came across this article again in Business Insider and will be sharing it with my students (I teach high school Economics.)
    I would love to extend an invite for you to share some of your insight and wisdom on investing with my students and podcast listeners (Ride Your Money Wave podcast.) Let’s connect!

  51. I’m 41 with $904,000 net worth (1.808 MM household with my wife). 80% is concentrated in home equity. That’s right, $1.4mm in equity – mostly because we own in a super expensive LA area and held through some major price appreciation. But it was a big monthly nut, and our stock and cash portfolios are below the lower end of your charts (having kids doesn’t help, either) Trying to get more cash and stock because inflation has made holding the house easier over time. Earnings go up while the mortgage payment is fixed. Now, I’m thinking that defensive dividend paying large cap stocks may be good investments over a five year horizon. Also looking at building an in-fill accessory dwelling unit (ADU) on property in order to rent out to take advantage of new statewide California law designed to increase density. Thinking of fusing home equity loan ito fnancing the 160K design/build/permitting cost to erect a 500 square foot one bedroom unit
    in the side yard that would rent out for approx $1600 per month. That could be the best possible real estate investment of all and safer than the stock market – and using leverage to do it. . . . thoughts?

  52. Great article, how would you add a pension into this? Base on total value depending on your date of death?

  53. Keep in mind that a lot of the nice gains ppl are talking about here and other places is due to the zero interest rate policies of the federal reserve as well as quantitative easing. Nearly 5 trillion dollars have been added to the Fed balance sheet to keep rates low. Bailed out banks, businesses and homeowners.

    Finally, governments at fed and state level have been spending billions more. The fed debt is now $21 trillion. Plus more at the state level.

    PPl are posting like they are real estate and stock market geniuses but really we are all riding the bubble.

      1. Yes it takes smarts to guess trends but how most ppl can’t do that. I bailed out of stocks in late 2007 but failed to get back in because I never IMAGINED the level of interference of the Fed. I later gradually got in purely in health care stocks.

        I am mostly in Treasuries so I missed much of the run-up but I am also 67 years old so I should be more conservative ‘anyway’. I was right in ’07 but wrong after!

        I salute all those who are at least trying to better their situation. They just need to understand ‘why’ their assets have done so well. EVERYTHING has done well…stocks, bonds, cash, real estate…everything exc cash.

        USA is still the ‘least ugly’ girl at the dance compared rest of world. But we are in uncharted waters with our level of debt, public and private.

        Regards,
        Trippe

        1. “EVERYTHING has done well…stocks, bonds, cash, real estate…everything exc cash.”

          So…has cash done well or hasn’t it???

        2. Excellent comments and sincerely agree with your comments. To see that a full 20% of our GDP is financial services is just crazyness…….sure, that can happen as interest rates have gone down for 30 years. Try and grasp what will happen to the financial services industry (which for all practical purposes doesn’t really produce anything) and GDP as rates gradually go up ?

  54. Just to be clear, your net worth calculations do not include the debt that is acquired through a mortgage, correct? If that is the case, most younger folks would have negative net worths.

  55. Per CNN Money, the average net worth for ages 65+ is $232,000, but per your analysis the average net worth of the above average 65 year old is $2,871,500. Why would you need over 12 times the average to be considered above average?

    Also, in order for a current 65 year old to have had a net worth of $250,000 as a 30 year old, 35 years ago in 1983, seems a bit excessive to be considered above average. Wouldn’t that be like a 30 year old today having a net worth over $600,000?

  56. I see a lot of people posting about trying to pay off their homes quickly. Given the low interest rate environment it seems that a better financial choice would be to refi/equity loan and use that capital to invest. While paying of your home does provide a risk free earnings by not having to pay interest, with rates in the 4% range and given they are tax deductible you should be able to beat the real 3.5% cost of a mortgage over the long run. Its a bit of a risk trade off, some people may prefer the risk free nature of not having to pay interest, but its hard to imagine not being able to earn a higher long term return on the cash you are using to pay off your mortgage. Additionally paying off your home puts a higher concentration of your wealth in real estate which may reduce your ability to properly diversify. Most people view diversification as a portfolio by portfolio objective but it should ideally be done across your entire net worth. Just something to consider… Love the site really helpful to gauge how well you are saving.

    PS. I may be biased, I work in the hedge fund industry so my work has me close to markets and has help to provide me with above average investments returns but still even at average market returns of 7-8% still better than the total cost of interest on a loan.

    1. Classic money mindset stuff, right? Poor and lower middle class tend to abuse debt, since their savings are low. So when you “graduate” to the full on middle class, you become allergic to debt a la Dave Ramsey (not that there’s anything wrong with this, a lot of people would be better off w/ this allergy).

      But say you have $225k left of mortgage at 4% for 20 years (240 payments). That’s a P&I of $1363.45 a month. If, instead, you put that $225k into an investment that makes around 7.52% annual return, you could simply take the average monthly interest and use it to pay the mortgage. And then you’d end with the home paid off and $225k, versus the home being paid off. Riskier sure, but over 20 years, that’s about what’s going to happen. And given that even $3k a month w/ a paid off home would probably afford a fairly luxurious retirement anywhere, that’s like a quarter of a retirement account.

      1. FinallyAdulting1

        Thanks to you both for these closing comments. I have been aggressively trying to pay down my mortgage over the last year, I’m a Dave Ramsey girl. I have been searching on-line for advice on whether that makes since considering the affordability of my payments ($625.00/month, I make $70,000/year) and my 3.25% interest rate. I couldn’t figure out a good approach mathematically to justify not just getting the thing paid off. I’m kind of embarrassed because I think I heard this advice before but I don’t think it clicked. These examples really helped it make since to me and I’ll start reallocating the $2,000 extra dollars a month I was paying on my mortgage to my brokerage account and saving for my rental property, which i didn’t want to buy until my home was paid off. Thanks again.

        1. @FinallyAdulting – I was exactly like you in regards to paying off debt based on my parents’ upbringing – we finally worked with a financial advisor who explained it simply – in the 70’s, interest rates were high and property values were increasing at a higher percentage. It made sense to pay down high-interest loans on appreciating properties. But in today’s economic environment, with very low mortgage rates, and property values stagnant (excluding west coast), your money is much better off in other investment vehicles that can easily outperform your property asset. Your 3.25 mortgage rate is simply fantastic (assuming it’s 30 year fixed) – enjoy the tax write-off, and put your money to use elsewhere (but be prudent with those investments; diversify and select quality instruments – emphasis on income, income and growth, not just growth). My wife and I did that when we got married, I sold my house for a very good return in 2006, put the minimum down on our next house (and got a great rate as well), and invested the significant difference in the market. Our property has never recovered from the real-estate crash of 2008, but of course the market has not looked back, and for that it was 100x worth the financial advisor’s fee for that one bit of investing advice. Of course, I probably could have found it out for myself for free here on this site, but my financial education is a work in progress….

        2. I think much depends on where you are financially – early in the game versus a little older – and what your asset allocation looks like. I aggressively paid down debt when it made sense – our debt was at a high interest rate, relatively, and I didn’t have a better alternative (in my mind) for the cash. Now, at 60, I don’t want any debt. Maybe that is not the best way to deploy extra cash or to think about things but I feel more comfortable this way. I was leveraged to the max in my 20’s and 30’s, less so in my 40’s and have entered the zone where I don’t need to carry debt. I can, and do, pay cash for everything (homes,cars,etc.). I have a substantial portfolio – equities, bonds, REI – and feel that owning certain assets free and clear is where I should be. It’s a balance of assets.

          But younger, yes, I was very leveraged and had 12 rentals by age 30. Way out there at times – but guns not butter. I think there are stages that are appropriate. In the end it’s about the numbers – where is your cash best deployed. What are the bottom line numbers (opportunity cost, after tax cost, etc.). Taking risk costs money – risk/reward/educated risk. When you are younger is the time when you have little/less to lose and plenty of time to recover.

          That said, there is no way I would pre-pay a sub 4% mortgage.

          p.s. our financial advisor just gave us our projections/plan – we end up leaving our kid 15 million (if we live to 95). And we started out broke.

          1. @Lynn – all good points; at your point in life, being debt-free also means (mostly) worry-free for your family in the event something happens to you. Hope you have a good plan to enjoy from here on out – :)

  57. FinancialSurfer

    Dear Financial Samurai,
    I am currently single 40 year old and pretty much spot on with your plan. I am weighted/interested a little more in real estate as I am close to paying off my first home and currently in process of buying 2nd property. My goal is to hit 1million net worth by 42. By 42 I will have my first home payed off and solid rental income 2200-2500 a month. My question is once you get to a million wouldn’t the growth be somewhat accelerated? I don’t see any reason why I shouldn’t be able to hit 3 million or more by 50. I invest in individual stocks in my Roth IRA (highest growth/success), have a solid 401K, IRA in mutual funds and real estate as I mentioned. Do you have any strategies for someone in my current situation who is more ambitious/aggressive with there goals. I am particularly interested in suggestions on how I can capitalize on having a home payed off at a relatively young age as this required some sacrifices. Thanks for your thoughts.

  58. What a great article, glad I discovered it. Will definitely reference this moving forward. I just turned 30 and currently have 205K in post tax (kept in the market), about 115K in retirement savings accounts, another 15K in cash at all times for expenses. I do not own any property. Living in NYC I constantly struggle with should I own or should I not. If I owned my actual rental unit, I’d be paying about $2,500 or more extra per month due to a variety of reasons. Not to mention I would have wiped away my post tax savings with the super high cost of living here. The day I leave the city, I plan to own. I save more on the post tax side because I’m trying to build that number up to buy a small business someday. May in my early 40’s. Anyways, awesome article – important read for anyone.

  59. Question: When you speak of post tax savings a year in your post, are you saying that’s how much a person should save a year?

    For example: Does the article state that a 45 year old should be saving $250k a year in after income?

  60. I agree you have a lot of good information. I’m 32, and have 53 apartments and 1 office building I rent out. My net worth is about $3M. I started with one rental house I bought in 2012 for $62,000.

    Do you think current inflation (cost of living) would cause these numbers to be more in 2018?

    1. I feel like you deserve a guest post here (or elsewhere) to teach folks how you went from 1 -> 53+ in 6 years!

    2. @Daniel – I second Jones’ request… please share your story as it seems quite exceptional.

      I am on the “purchase one rental a year plan” but that doesn’t even come close to your acquisition curve. I rent furnished bedrooms which is an approach that doubles the cash flow on a property.

      Congrats and thanks for any learnings you can share!

  61. I am 40 with a net worth of ~$750k. I do own my own home. Most of my wealth came from investing in equities. Part-way into my management career, I did an MBA (part time, while working), which has increased my earning power.

    I am separated and have shared custody of young children. It was an amicable separation, and we each kept all our own assets. As the higher earning parent, I pay child support to my ex.

    To date, most of my employers were on the small side and did not offer any type of company retirement plan. The employer I’ve been with for the last few years currently offers a DC plan only. They offer partial contribution matching so I definitely take advantage of that.

    My personal goal is to hit a net worth of $1M by 45. This assumes I don’t lose my job for some reason and that markets are stable. If we’re in a downturn, my net worth will decrease but it will also be a good time to buy…

    Beyond that goal, I might like to retire early, in my fifties. Depends how I’m feeling and how my finances are doing. TBD.

  62. Compared to a lot of the people in the comments, I’m average or below average. 25 year old renter here (paying under $500 a month in rent and utilities for a 1BR apartment). Only 3 years into my career. Have been maxing my IRA for the past 4 years. Started maxing 401k last year, and have been putting any extra into a brokerage account. Graduated college in May 2014 with $18K in student loans. Paid them off in Sept 2015. Working as an engineer in a LCOL area. Here are my current numbers according to Personal Capital:

    Cash: $31,305.50
    Investments: $86,938.69
    Credit Cards/Loans: $0
    Car: $2,508.00

    Total Net Worth: $120,752.19

  63. AlwaysWorriedAboutRetirement

    Hi Sam
    According to your table, at 45 I should have close to 600k in 401k savings, 200k in post tax savings and 117k in equity for a total of 914k net worth. My numbers are more like 400k, 150k and 1.2M for a total of 1.75M because i live in the SF bay area with it’s outrageous real estate prices and own two homes, so most of my net worth is property equity. Don’t know whether to feel relieved that my overall total is much higher or panic that most of it is parked in real estate that lies on an earthquake fault line!!! Thoughts?

  64. Can you explain how you factor real estate into the total net worth?
    Let’s say I put $10K down on a house valued at $250K and I get a home loan for $240K.
    My mortgage payments are $1,500/ month, so after 10 months I will have paid $15K into the loan. Would I add $10K + $15K to my net worth or would I subtract approx. $235K from my net worth ($250K + loan interest – $15K)?

  65. I am 22 years Old and have a net worth of $125,000. $55K Cash, $50K Property Equity and $20K 401k. Am I in the top 1% by age? I would also like to know where I need to be in the top .1% by age. I would like to know based on income and net worth. Thanks!

    My goal is to be a make a million in total gross by 24 and become a millionaire by 28. I read your articles very often so I appreciate the feedback. Thanks!

      1. Thanks for the quick response! You have provided two charts one shows $75k net worth and the other shows $200k net worth by 25 to be in the top 1%. Based on those figures I should be comfortably on my way. By 25 my target is to be at $500,000.

        Do you have any article showing targets for the top .1%? I have had trouble finding information on that since most of the statistics are on age groups above 35 and I am only 22.

  66. Maybe someone else has commented on this elsewhere, but it isn’t clear whether your figures are “per person”, as I usually see in your posts, or pER household.

    Thanks for reading.

  67. Chris Cerda

    Sam, how can I calculate my pension in terms of net worth. It will provide substantial payments for life.

  68. Sam – Enjoy your newsletter. One thing the charts for average NW of the above average individual doesn’t take into consideration is life itself. Realize that the divorce rate for first time marriages is about 50%; the likelihood of being fired or downsized (the latter can be for a variety of reasons i.e. economic downturn, company merger or acquisition, redundancy) at least once in your career; and/or issues related advancing age in one’s career (discrimination, health issues, etc) are all very real factors that happen to the brightest and best out of our top academic institutions in the process of living life. Setting goals are great; however, the best laid plans with great opportunity are often met with at least one of the factors I mention that places one in what I call financial recovery mode to be ready for future retirement. Goals can still be met but realize the road to those goals is often met with the very factors that come with living life.

  69. Hi Sam,
    this is a my first post here so a brief intro is in order. I’ve been an avid reader of FS since 2-3 years. I’m 45 and lived in SF for ~5 years uptil 2005. I now live in Pune, India, to be closer to aging family and all the delicious tandoori food. I was introduced to the very radical idea of saving 50% income back in 1999 by my wise elder brother as a result of which I followed decent basic principles of saving and investment along with keeping costs low, uptil 2014. After I discovered FS, my FIRE goal became supercharged. I discovered a powerful tool which helped me build my own set of clear goals. My goal is to retire now before I turn 50. I have my own apartment paid down, 1 apartment on rent (pays me 10% of my monthly expenses as post-tax) and a commercial convenio-store sized place.

    FS has also inspired me to get going with side hustles and leveraging the internet. My background is as a developer so I have written my first android app as a test bed. Better ideas should follow as well. It’s a lightweight News, Mags and Blogs reader which enables focused reading, as opposed to the popup-led popular news items which most apps nowadays promote. It may not have a USP, but hey, FS has taught me to stay at it, better things will come!

    As my tribute to FS, I have included Financial Samurai in the Blogs section of my News World Ultra app (smiley smiley). My app can be found here on the Google Play Store –

    Once again, thanks Sam, for sharing your experience and wisdom for the benefit of so many. It’s great it helps you run a solid business at the same time. The best of sustainable living and world peace.
    Sameer

  70. I don’t even want to finish reading because apparently the fact that I have student loan debt means I can’t be above average. Apparently a first generation college student whose parents couldn’t afford to help and then lost everything their junior year in college (2009) just can’t make the cut. Financial advice shouldn’t rely on coming from money or be a put-down that makes someone feel bad about having overcome a lot in their lifetime. I still save my butt off and have a lot for what I was given. I should feel proud of that, and was here reading because I am proactive and interested in always doing better. But reading this made me feel awful. I won’t be reading financial samurai again.

    1. You can let your current situation define you, or you can look at your situation in and improve. It’s such a pity that you’ve already adopted a defeatist mentality so young in your life. If you don’t believe in yourself, nobody else will.

      The reality is, a lot of people have been born on second or third base. Where their parents have paid for your tuition or the students got scholarships and didn’t have that as a result. This is the real world we are living in, not some fantasy land where we need to Pat everybody on the back.

    2. Randy Evanchyk

      Your comments, Anon, are the reason I’ve become so disheartened with young people today. We all have internal conversations that can either contribute to our success in life, or send us down the wrong path. For example, thoughts that take on an unhealthy attitude will most certainly work against us, like your comments regarding your inability to be “above average.” Is that what you see when you look in the mirror every day? As the quote indicates, “Life is 10 percent of what happens to you and 90 percent of how you react to it”? Life, on occasions, is hard for all of us, but it’s a matter of how you view and respond to those times that will determine whether you are on the right path. Your attitude has put you on the wrong path in life, but I pray that you are able to see the light. I read Financial Samurai, BiggerPockets and other blogs to learn from the articles and the varied opinions from respondents – these blogs are valuable resources. I strongly suggest that you continue to read them…good luck, Anon.

    3. I agree with the others. This attitude will torpedo you. You make your own luck in this world. We are 59 and just crested 20MIL. No $$ from anyone, ever. My parents paid for my undergrad education but not Law School (I worked FT and went to night school and still had debt from a State School). My husband’s parents could not pay one cent of his college.

      Quit crying and set some goals.

  71. Profitable Matters

    It’s so interesting that the “above average” individuals all seem to own homes. My wife and I have been wondering how long to wait before buying, but we’re leaning towards buying sooner rather than later (with a 20% down-payment of course). Thanks for including that 401k chart, looks like we’ve got just a little more to save before becoming one of the high-end savers for our age!

    1. I strongly believe rising home equity has been the BIGGEST reason for the widening wealth gap over the past several decades. You can just see the figures in plain site. If the median home that costs $200,000 increases by 3%, that’s a $6,000 increase. But if the median household income of $56,000 increases by 3%, that’s only $1,680 increase.

      Compound this simple difference over many years plus the fact the homeowner pays down the principal = huge wealth gap.

      I’d just be CAREFUL buying a home in 2017. We are at the top of the market. It can go higher of course, but be picky. Run the numbers.

      Related:

      Should I Buy A Home In A Rising Interest Rate Environment?

      Real Estate Is My Favorite Asset Class To Build Wealth

      Focus On Trends: Why I’m Investing In The Heartland of America

      Sam

  72. FinancialRewards

    Great Article Sam! Thank you. I also really enjoyed reading “most” of your reader’s comments and thought I’d give my own two cents. I am 28 and always considered myself a “well above average” saver. After reading your article I realized how very wrong I was. At best I’m slightly above average (even below your low estimates) and have no where near the savings I should have by now. This is changing now (see my new budget below). At age 27 I had a total net worth of about 75k, decided to go traveling and currently at age 28 I am left with approximately 55k.

    I don’t have a college degree and live in Switzerland. I just started to work again (after traveling through for approximately 6 months) and my base salary is USD 100’000 per year. I figure it’s time to do some serious saving now so I have the option of retiring soon-“ish” (10-20 years).

    On the whole, I believe your aggregate figures work very well for Switzerland, though there are big differences if you break things down. Let me explain:

    401k:

    People in Switzerland typically don’t start saving for retirement until they’re 25 years of age. Contributions to (our equivalent of the) 401k are actually determined by the employer. By law, contributions start at age 25 and amount to a minimum of 7% of the employee’s salary (50% by employee and 50% by employer). That minimum rate increases every 10 years or so to a maximum contribution of 18% at age 55-65. Clearly our restrictions will not allow the average Swiss to get anywhere near your figures in that department.

    Now that being said, we do have a separate “tax-exempt account system” to which we can pay a maximum of approx. 7k a year. But hat helps only a bit.

    Real Estate:

    We fare even worse in this department. The median home price in Switzerland is about 1 million and if you want to own a home near (2h commute or less) a city (where the good jobs are), you’ll often have to pay at least 1 million. What’s more, home owners are actually penalized by having to declare what we call “Eigenmietwert” as income. Basically the property worth is officially determined by an estimator and you are required to declare the amount you would hypothetically earn if you rented your home out, as income! I wonder what you would propose the average Swiss do in the home equity part of your equation. :)

    Post tax/Personal savings:

    This is where living in Switzerland pays. For such a small country (approx. 1.5 times larger than the Dallas/Fort Worth Metroplex), our tax rates differ a lot from place to place. I checked online and found that in California the tax rate for someone with my income (100k) is approximately 32% (including federal, state, local and FICA). I live in one of the lowest tax regions in Switzerland and pay approximately 16.75% (in 3 years it will drop to under 15%).

    My personal situation:

    Until I started my new job I did not have a 401k. My current employer is extremely generous (pretty much unheard of by Swiss standards) and allows me to make a 5% contribution, which he matches 3:1. Thus my 401k will actually grow at a staggering rate (by Swiss standards) of 19k a year (not 20k for silly, technical reasons). Thus I am somewhat lucky in that department.
    Unfortunately we have laws that limit the risk (and thereby potential return) we are allowed to take with our 401k and “tax exempt account” money. All in all, these restrictions prevent me from getting anywhere near to your high-end estimates, though over time, I should top your “low-end” estimates. Obviously I’m maxing out the “tax exempt account”.

    As owning a house doesn’t make any sense financially, I currently rent a flat for 1500k a month. Seem like a lot? Let me explain.

    Property prices and thus rent is more expensive in Switzerland
    Rent is higher where I live, because it’s one of the lowest tax regions

    My tax savings when compared to an “average” Swiss region are approximately 8k a year. At the same time I am paying about 3k more for my apartment because I live in a low tax region. All in all, I am saving approximately 5k a year by my choice of location. This makes a huge difference, yet most of my friends don’t seem to grasp this, let alone are willing to act on it.

    Now I do believe it’s important that one saves as well as lives his life. Therefore I actually budget about 500 bucks a month for traveling and the purchase of gadgets, gifts, etc. I am left with saving 3k a month (7k of which goes to tax exempt account annually).

    I did the math, and to be comparing apples with apples I took my hypothetical income after California taxes (I am paying higher rent for at least a part of my tax benefit after all) and I get to a post-tax/personal savings rate (excl. 401k, incl. tax exempt acc) of 53%. Adding my annual 401k savings my total savings rate climbs to 80%. I am currently thinking of ways to increase my savings a couple of percentage points, but that proves to be a challenge as living expenses in Switzerland are notoriously high. Therefore I am focusing more on the potential to generate side income (as one of the benefits of my current job is a 40h work week. No overtime pay.)

    I will be investing my savings in passive investment funds on major equity indexes (e.g. CHF/USD hedged ETF’s on S&P 500 or DJIA). The U.S. stock market has historically returned about 10% annually (before inflation). I came up with the following scenarios for my net worth (including my current savings of 55k and 5% tax on 401k and “tax exempt account” at withdrawal (current Swiss rates if done optimally):

    In 10 years (scenarios 1 & 2):
    1: Half historical Equity Returns (5% p.a. broader market, 2.5% p.a. 401k & tax ex acc): 748k
    2: Historical Equity Returns (10% p.a. broader market, 5% p.a. 401k & tax ex acc): 969k

    In 20 years (scenarios 3 & 4):
    3: Half historical Equity Returns (5% p.a. broader market, 2.5% 401k): 1.789 million
    4: Historical Equity Returns (10% p.a. broader market, 5% 401k): 3.108 million

    Got to love the magic of compounding. Obviously these figures don’t account for inflation. But they also don’t account for bonuses or pay increases (which are limited as I am not degree educated, but nonetheless I can realistically expect to get to 120k base salary if I don’t change jobs within a few years). Furthermore they assume a monthly contributions.

    Now as I am very safety oriented, I will want to be able to live off of my returns without having to resort to touching the principal, i.e. my savings. At a conservative 4% of annual expense I am left with the following income for my four scenarios:

    1: 29.9k
    2: 38.7k
    3: 71.5k
    4: 124.3k

    Readers of your blog might be interested in a brilliant site I found (numbeo dot com). Under the “cost of living” section go on the “cost of living estimator”, input your living situation and get a picture as of what your living expenses might look like at different locations around the world. Please do note that some costs such as health care aren’t included in that calculator. Also as far as I can tell, the information is “user” generated and though it seems accurate in the places I’ve lived and visited, this might not be true across the board. In my personal situation I could easily live off of 2k a month in Thailand, Portugal or a number of other low cost countries. I’ll make more than that in returns in 10 years under my “worst case scenario”. Pretty cool! Obviously I’ll want more than 29.9k to live off of annually as I don’t expect to permanently move to a low cost country … but still a cool tool to play with.

    Thanks again for your great blog, Sam. And thanks for the many comments and for sharing. I really enjoyed reading it!

    1. FinancialRewards

      Please note that the flat I am currently renting is 1.5k, not 1500k. Apologies for the confusion.

    2. Welcome, and thanks for sharing your background and details! I think it’s great that at age 28, you are so focused on your finances. This focus will serve you very well in the rest of your life. So many people have these “oh crap” moments in mid-life b/c they DIDN’T focus for the first 10 years!

      Best, Sam

      1. FinancialRewards

        Thank you for the motivation! I do have one question. As mentioned in the previous post I intend to invest in an ETF on the S&P 500 or a similar index. I have read enough about investing to know that it’s pretty much impossible to time the market. I do believe equities are very high at the moment … but then again that’s what I thought in 2014 and look at where we’re now. Would you recommend I

        1. invest my entire 55K savings in an ETF at these levels and then continue with a monthly contribution of 3k

        2. commence a monthly contribution of 3k and wait for a 20-30% correction to invest my initial savings of 55k

        3. Wait all together for a 20-30% correction before investing anything

        I am heavily leaning towards option 2, as I know I can’t time the market. What if the stock market climbs another 75% before a mere 25% correction? I would greatly appreciate your thoughts on this matter. Thanks

  73. Interesting! I’m at the lower end of net worth as a 45 year old…but I have a military pension, so that’s $32k per year and I only need to supplement it with $18k more, which is easy. My spouse still works but has never had a 401k match. We have nearly $470k put away.

    (I could live on less, and we could be more frugal, but we’re not.)

    Haven’t done too badly for a couple of college dropouts.

  74. These numbers seem a little flat to me. If you’re starting from $0, clawing your way up to that first $100,000 in under 4 years is going to be tough at a time in your life when your salary is likely to be at its lowest. Even a fairly aggressive saver is going to have a hard time doing that. I’m certainly not saying it isn’t possible, but it feels a little optimistic.

    By contrast, things seem a lot slower in the long run than they should be. After 5-10 years working, your salary is going to be substantially higher and you’ll be making more. For example, even assuming your salary peaks at $80,000 after 5-10 years and then simply tracks inflation, I don’t think it’s unreasonable to go from the $250,000 at age 30 to over $4 million at 65.

    I do appreciate the sentiment of the article and it tracks pretty well with who and where I am financially, though. Honestly, I’m probably pretty close to a base case for this sort of analysis in terms of my demeanor, career, financial sense, and good fortune, all of which are favorable, but nothing to write home about.

    Comparing to the total net worth numbers here, though, when I began working I started out about two years ahead of the curve (due to inheritance), whereas now I’m about on track with it at age 28, and my current long-term financial estimates put me at least 5 years ahead. Given that my financial life hasn’t and isn’t really likely to change much (i.e. no X factor for me), I find it strange that I’ve been losing ground up until now, which would imply that I’m below average financially, but can expect to gain more and more ground as time goes on, which would imply that I’m above average.

    I don’t have particular opinions about which side of things I should be on, but the contrast struck me as a little odd.

  75. Your articles are well written, and your analysis/guidance is very useful. Obviously, individual circumstances may vary, so someone may have more or less saved than the ranges you show.

    Many people with kids also try to save for their children’s education, which can limit their after-tax savings potential for retirement. Have you done an analysis to include college savings in your analysis? Did you envision that to be included in your “post-tax savings”?

    1. A great point on saving to pay for college for our kids. FS assumes that an “above averagr” person had parents pay for college … but not sure that we are accounting for 150k/kid walking out the door as our kids hit college age. I am trending well above FS standards at 47 so this is more of an observation than a complaint. Blessed with dual income and side business most of my adult life …. BUSY but at least on track.

  76. I am 53 years old and the projections are right on for me. I am higher in the home equity but lower in the 401k. I made a conscious decision early on to pay down my home mortgage. This made me sleep better at night, but, I realize it was not the wisest financial decision based on how the market has grown. What I am most proud of is I was able to do this while we raised 5 children (who went to private grade school and private high school) and my wife was able to stay at home while we raised them. We did not take a lot of fancy vacations and always paid cash for things (cars included).

  77. Right Hand Money Man

    Thanks for all the work on this post!

    “Above average people seem to always be thinking of new ways to build wealth. There is an optimism about them that no matter what happens, they can always find ways to make more money.”

    This was my favorite line, and I would add to it that those same people are consistent with wealth building endeavors. They don’t think of a new scheme, do it for a few months, then jump to something else. They are eternal optimists like you said, who add value to the world in meaningful ways for which they can be financially rewarded. Very few “victims,” in that category, but an awful lot of winners.

  78. Hi, Financial Samurai,
    I was feeling good about myself until I found your Website. I am 63, retired a year ago and have a net worth of about $1,250,000. I thought that was something to be proud of, but according to you, I should be worth twice that much. I live in an affordable Midwestern city, and receive an annual income of about $50,000 from a pension and Social Security. I think I will be fine, financially.
    I am well “above average” by most standards and think your goals, if not unrealistic, are impractical for most people. But I do admire that you push people to save and invest. Just don’t invest in Enron or Lucent, or any number of failed companies, as I did. Of course, nobody intentionally invests in enterprises that go bust.

    1. Probably one of the most interesting comments I have read in this thread in a while. Key words “affordable Midwestern city” . It goes to show you where you live goes a long way into defining what your targets should be. For the record, I’m 42 and living in a big Canadian city and trending comfortably above the targets in the article. Enjoy your retirement!

  79. Nice article. I’m also hoping to get feedback from the group to see if we are doing ok with our savings. Looking at the net worth table, I’m not sure anymore.

    Here are some info:
    – My wife and I are both 41. She only started working 2 years ago.
    – Combined Net worth is $765K USD. Breakdown is as follows:
    — Cash/Stock = 197K
    — Real Estate = 287K
    — Retirement = 280K
    No liabilities (no mortgage, no car or student loan, etc..)

    – Our combined savings rate is around 40 to 45% of our Net Income.

    Thanks,

    1. Those are good numbers – you keep that up and you should easily be able to retire by 50-55 depending on your annual spending.

  80. Looks like I’m crushing my “above average” status based on my net worth. Go me!(Crushing is ~10-15% better right?)

  81. Just did a quick check for Australia in case anyone’s interested… unfortunately the most recent data is from 2013-14 but it says: Average household wealth for those households who were renting was about $183,000, the average wealth of owner occupied households with a mortgage was $857,900 and for owner occupiers who owned their home outright it was $1.4 million.

    So your paragraph about the correlation between net worth and home ownership rings true Down Under!

    1. smartrenter

      I think that there is misconception that you have to buy a home to get wealthy and if you rent then you will stay poor. The reason that homeowners are much richer than renters on average is because homeowners on average have much higher incomes that can financially support expensive homes. Without a high income, you wouldn’t qualify for mortgages. The poorest people with low incomes cannot afford homes and are forced to rent. The lowest income people on average have a lower net worth than the highest income people. I would bet that most high income people own a home and most low income people rent. This generally explains the gap in net worth between a homeowner and a renter.

  82. FinancePatriot

    I am 40 and we are about 1.25M in total net worth, so I guess we are above average. However, if you divide us separately since we are married, I guess we are below average. Either way, I am happy as we have more than enough to retire soon. Outside of CA real estate isn’t bad or super expensive. I haven’t shared our net worth on my blog yet but I suppose it’s inevitable as that’s what finance bloggers do.

    The key is, even though we have had over 1M for a few years now total, it was not invested assets. Now we are above 1M in that category too.

    Nice article, well written.

  83. i’ve been near or maxed out my 401k since age 22 until now at age 31, plus get a 5% company match, and I am at 200K now in the 401k, your numbers do seem a little off.

    Furthermore in terms of equity, those numbers seem very low, I am into my 6th year of ownership and have around 150K of equity in my house.

    Also post tax savings is low too for the ‘above avg’

    I just can’t see how I can hit your above avg on the 401K part… although I am way above avg on your other areas..

    1. Hi Mike,

      $200,000 at 31 is right in the middle end column of my 401k chart for your age. I’m not sure what the disconnect is? Are you saying you think you are way above average at $200,000, and therefore should be in the high column or even higher even though you are above average in the final net worth chart?

      For reference, my 401k at age 31 was over $300,000 as I had profit sharing + match.

      Thanks,

      Sam

      1. I guess by not obtaining any profit sharing, I am missing out to some degree. I just don’t know how I am way above the values you stated for the other categories, but in 401K I am lacking, maybe time to revisit my 401k allocations if I am trailing behind this much.

        I have been maxing or close to maxing each year, I guess it does depend on your company match percentage as well. I’d like to see what you believe those values could be with a less generous company.

  84. As many bloggers on Early Retirement, I have my net worth online (currently about a quarter of a million dollars), on my site.

    I disagree that an average 25 year old cannot save $15k-$35k… I have done it myself saving aggressively. Currently I save 1.8k a month.

  85. Multimillionaireroad

    Thanks Financial Sam. Really interesting stats and another well written article as always. However, I disagree with the second chart particular – and I’ll quickly caveat that I can only speak from my own above-average experience. To expect that an above-average 25 year old can save $15k-$35k is frankly ridiculous for anyone not still living with their parents. When I was 25 I lived in London and was earning £32,000. This was above the national average, above the London average and far above the average earnings of people my own age at the time. However, after income taxes I was earning just under £25,000, rent, utilities and council tax was £10,000 (and this was at the lower end), transport to work was £3,000, food was about £2,000. Ignoring all other expenses, there was no way I could ever consider putting away $15,000 let along $35,000.

  86. Bill Gates remarked that he was the Lucky beneficiary of place and opportunity, and I think your article is making assumptions that “above avg habits” dominate the end result. I happen to fit the curve at age 60, but only b/c I took huge risks when I immigrated to the USA at age 42, and got massively Lucky. My home country’s tax system and economy did not allow for broad-based personal wealth building, which frustrated me no end, and for example my fine big house in a big city sold for a mere $60k USD in 1999. The result is I was way behind the wealth accrual curve when I moved here, and I could instinctively feel it – no need for a spreadsheet. Fast forward 18 years, and see how I was *lucky* to buy (squeaked in by the skin of my financial teeth) into San Jose real estate and Lucky to work in some tech companies with good stock options. I was Lucky to have a nice wife and kids that made a happy stable home. I was born with a natural smile and this again made me Luckier than many to move in society and make some very important connections. Its nice to think we plan and then engineer ourselves into a good position but that’s not been my experience. Above average has a lot to do with what Bill Gates remarked on, in my opinion.

    1. Luck can certainly play a role – especially for people who make a lot of money off their primary residence. But most people who become millionaires in the US do it saving $3-$15k/year over a large number of years. Every day – people have choices – do I buy a big home or a smalller home? Do I push my 401k as far as I can or do I buy new furniture this year? Do I drive an old car or brand new SUV? Do I go out to eat or cook at home? Do I go party with friends or stay at home and study? Do I take a nice expensive vacation to Europe or do a daycation with the family? Do I work that extra shift and save extra money or drink a 6 pk at home and relax? Do I go to the bar to hang out or do I do research about investments and ways to save money online? Do I have the entire family on $200/month phone plans with the latest iphones or $50/mo on prepaid cheaper phones? Do I coast at my middle income job or do nights/weekends to get my masters in business? I find most people make their own luck with good behaviors.

  87. Trying to do the math myself for a “high end 401k saver”.

    Age 401k contribution Year
    ————————————-
    23 14000 2004
    24 15000 2005
    25 15500 2006
    26 15500 2007
    27 15500 2008
    28 16500 2009
    29 16500 2010
    30 16500 2011
    31 17000 2012
    32 17500 2013
    33 17500 2014
    34 18000 2015
    35 18000 2016

    If the person left it in cash, he would have approx $213k. I am discounting interest rate/inflation, time value of money.

    Legally, on average the investor can invest $16384 per year. (I took the sum and divided by number of years)

    Assuming they would buy S&P 500 every year, their total return comes to $399k. This is with reinvesting of $16384 per year.

    If they would buy only small cap (VB), 421k.

    If they would buy only QQQ, 511k.

    If they would buy Vanguard 2050 fund, 312k.

    Those high savers sound unrealistic. Am I missing something?

      1. you are very optimistic. On average its about 3% they would match. I even accounted for that annualized.

        i think you should revise the young high saver. they are taking some serious risk – 41% drawdown for qqq (assuming their employer would even provide a relatively high risk with little diversification fund).

        I suggest using a Vanguard target fund as the average and S&P with a small cap value for high savers.

        Using S&P 500, getting 400k is still hard and risky. This is with zero bonds. These results sound cherry picked — you picked some crazy fund which actually did perform but the chances of an employee providing that fund is hard.

        IMO, S&P is a fantastic benchmark and fund (high sharpe & diversified & very low fees).

        Sounds like business school / MBA math :-)
        just saying

          1. age 34. been working for 12 years.
            401k: 432 as of close today.
            been investing for about 6 years.

            1. smartrenter

              How did you get to 432k in just 6 years? Did you start maxing out the 401k from day one 12 years ago or did you start with a 0 balance 6 years ago? I’m not understanding when you say you’ve been investing for only 6 years how you got to 432k. You must be a very good investor or I misunderstood your comment about 6 years.

            2. And, I believe thats somewhat realistic. The reason why mine is lower is because I had more bonds at a young age. If it was in stocks I think I could of surpassed the higher end.

  88. I found this article very interesting, I am 51 and meet your net worth projections, however, it is 100% from Real Estate. Unlike most readers and posters, I dont own any other investments. So, I ask myself, should I diversify into other areas, or keep building wealth with the tools I fully understand.

    1. John Fourteensix

      In 2009 I had 3 homes and I had cashed in my pension and 401k to put into those homes so that I could be debtfree. I had 100k income. When the Fed took down our economy in 2009, I got laid off with 250,000 other people in my company. Although I got a 24k severance after only 15 months, I was house rich and cash poor. I could not access the almost 100k in equity I had in all three properties. There were no jobs in my field for a year and I had to take 8.25/hour call center job. I am finally back on the top, but I will no longer put all my eggs into one basket. I ended up losing 2 of the properties, and 100k of equity.

      1. John Fourteensix

        Correction: 52,000 people. Also, I didn’t lose just 100k in my property, I paid down the mortgages 100k. I lost that plus the increase in the fair market value from the original mortgage amount.

    2. When we were younger we were almost 100% real estate as far as NW. We are 58 and about 1/3 equities and cash, 1/3 residential rentals, 1/3 commercial (Hotels). I think the residential is pretty recession-proof. My values dropped in the 2008 crash but the rents did not. I think of the rents like bonds – safe and steady. A hefty 401 represents about a third of the equities, the rest is from some serious banking of any extra dough. The commercial is not recession-proof but is well managed with lots of free CF. I will be winding down the residential over the next 10 yrs (after 30+ yrs I am sick of it!) and that will go to equities, bonds, etc. I’m gearing my equity portfolio toward blue chip dividend growth funds and preferreds.

  89. Great post – love this and the above average married couple as I check in on them every few months to keep me motivated and on track!

    Do you foresee any updates to these ever or pretty static in nature?

    1. Good question. Since we’re at an all time high in the stock market, and the real estate market has recovered, it may be safe to add 10% to all the final figures. BUT, the most dangerous thing one can do is extrapolate into the future a high water mark of good times. That’s how lots of people got crushed in 2007-2008!

      So, for now, the numbers still stand. 2017 401k max contribution is still $18,000.

  90. This analysis is very good overall. My net worth is tracking well above,but the mix of my 401K savings versus “post-tax” is very lopsided as compared to these assumptions. That being said,I’m a firm believer in rental real estate. While homes can and do cost a bit to maintain,this maintenance (and property tax) is almost entirely tax deductible under the current laws. If you or your spouse are a realtor,the write off for renovations and maintenance are unlimited. In addition, the income is also reduced once again based on depreciation rate of the property. One major factor not addressed in this analysis are the taxes paid while deducting from a 401K. As we know there are also penalties if withdrawn prior to age 59 1/2. In short,I’d much rather have “post-tax” assets that earn a consistent 7% annual return than keep it in a 401K which generally fluctuates pretty wildly with the stock market. Just my 2 cents. Maxing out the 401K is great, but one of our best ideas was to start a small home based business 14 years ago. While the profits of $20-$30K per year do not seem like much,over time, they accumulated into a very nice nest egg,which allowed us to start investing on the real estate front. This in turn led to another home and so on. I would just challenge the readers to thoroughly consider the tax ramifications and benefits of focusing on post tax savings as opposed to the 401K only route. I think it would be an eye opener.

    1. Check out: Buy Real Estate As Young As You Possibly Can

      I’m a firm believer in rental real estate as well, and currently run three rental properties in SF and Lake Tahoe. If I move back to Honolulu, then I’ll rent out a 4th property. It’s good to hold on for as long as you can take it.

      But I’m slowly not able to take property management anymore and am buying real estate with higher rental yields in the heartland of America through real estate crowdsourcing opportunities. You only have to invest $5,000 – $10,000 at a time, instead of hundreds of thousands for an SF condo/house downpayment.

  91. Your numbers are almost 100% on target for me (62 year old male). My income started at $10,000 a year back in 1978 after graduating college at age 24. I then went to grad school and after that started my “real” job at age 32. So I only invested for 30 years but still hit your numbers for a 62 year old (guess I made up for some early years of low wages). The only thing you missed with me was on my home….it is paid off and valued at $550,000, which is high for Alabama. All other projections were spot on…………….I love reading your stuff!

  92. Agree with you John! I’m the same at the 45 mark, along with my husband. When I factor in the debt we’ve accumulated with our business ventures and second property, along with our RRSPs and Home ownership (we paid off our prime residence – which was really our second purchased home) after 13 years of ownership. We used the equity in that home to buy a second property, then a 3rd for a new business. In our 20s and 30s we sacrificed the expensive trips, big wedding, and fancy cars to accelerate our mortgage payments. Our highest mortgage was 6.4% lowest 1.5% and our 2 additional properties are variable at 1.75%-3.5% each.

    I had poor parents, worked through university and came out with 6K in loans at 9.5% which I paid off asap. I do think there are a couple of factors that are not mentioned that can have huge impacts on the numbers. Marriage, divorce, kids, health issues and job loss. All of those can positively or negatively skew the numbers. Definitely think being DINKS (double income, no kids) played a huge factor in paying off our first house quickly.

  93. I just happened on this article and site.

    I am stunned at how precisely it projected my 45 year old financial numbers. I mean really stunned.

    I don’t talk much with my peers about how they are doing financially, but I know they spend like drunken sailors on shore leave and are constantly harried by money problems.

    So I thought I was a total freak outlier in my financial position. But Sam nailed my numbers at the high end step by step.

    It’s good to know there are other people out there building wealth through sound and solid strategies of thrift and prudent investment.

    If there is one thing that should be taught every year of school so it is never forgotten – it is the amazing power of compound interest. It does the work for you.

    Cheers!

  94. Kye Andreopoulos

    In the final scenario, if the person lives to 85, they will have an income of $143 K per year. They probably aren’t going to spend it all (leave to kids, charity).

    But what are they going to do with 143k a year, for a one person, with a paid-off house?

    Also, wouldnt it have made sense to have saved less in 401? At $140k a year at retirement, you are receiving a higher income, at a higher tax bracket, than most people would have from 20-30s, if not 30-40s. What do you expect the ratio to be between average annual income during 20’s and average annual income after retirement?

    Thanks for your thoughts,

    Kye A.

  95. Millennial Millionaire

    I’ve been following your blog for a while now and think its fantastic. I love this post on net worth. I’m a Millennial and started a personal finance blog myself, and one of my main features is publicly documenting my net worth progress. My goal is to reach a $1 million net worth by 45, which would put me slightly ahead of “average” based off your chart. Currently I am 32 with a net worth of $352K (between my wife and I). Obviously I would prefer to hit that goal even sooner. My wife and I now live well below our means and save like crazy, so I think 40-42 is very feasible now. Keep up the good work, Financial Samurai!

  96. That’s a ridiculous estimated numbers for 401(K) low-end or high-end, I have been working over 20 years, I’m in my early 40s and who loved to save every dollar of my salary, but my total 401(K) from various full-time jobs is not even half of your low-end number, because there were employers selected bad investments for employee 401(k) contributions and the maximum 401(k) contribution was very low years ago, your low-end number is too exaggerated with optimistic, not realistic reflecting based on the real bad economy.

      1. I have to agree with you with the economy. I have friends that have engineering degrees that couldn’t get a job in engineering, but were able to land associates and managerial positions in sales and insurance. There are jobs out there if you are willing to look and accept lower salaries.

  97. Love this article and your others. Do you happen to have a post that addresses those of us that completed graduate education or 5-7 years for a PhD? I feel like we’re playing catch-up against your numbers, since what we made in grad school allowed very little savings that we then used to buy a house. Now we have good careers and are maxing out the 401Ks, IRAs, paying down the house, and contributing to liquid savings; but, we still are behind in your charts when looking at where we should be optimally at age 40. I imagine we’ll catch up in 10-20 years, but it would be nice if you had a reassuring table for our situation.

      1. Thanks! So would you not count the years of grad school (in which we were paid, but very little) as years worked? And what about postdocs (in which we were also getting very little at first)? I feel like I’ve “worked” in paying jobs all along, just nothing that allowed me to save vigorously until the past 5 years.

        1. It’s really up to you. The thing we must all face is death at some unknown point. So, give you spent so much more time than average going to school, your goal should be to try and live and work as long as possible!

  98. I’m curious how you calculate the post tax value of investments? I’ve got about $800k Of long term shares in a brokerage account, with the unrealised net gain of $400k. Do I deduct 20% for capital gains taxes on the $400k which makes it $320k and the total thus $720k? Or do I count it as the full $800k

        1. Count everything pre-tax. When I first started keeping track of net worth I did pre and post, post gets so freaking complicated and quickly as you add more assets and trade different accounts and move through different tax brackets that myself (as well as any evaluation of Forbes lists) really only talk in terms of pre-tax. As an example, if you were to stop working and slowly realize your investments at low tax brackets you’d have a different answer from selling all in one year while working.

      1. BTW – I’m 59 and was recently laid off by a large & voracious tech Company. It worked out well financially and the job was a well paid misery so I don’t miss it at all. Now I’m pretty convinced I don’t need to work again if I manage my finances right. We have about $650k in cash (which we use to buy & refurb small properties) the aforementioned $800k which is a nice mix of tech and F500 dividend payers, and just over $1M of retirement accounts- 750 in USA in appl, AMZN, GOOG etc, and $260K in UK where I worked for 12 years – BTW the $260K was $300K pre-Brexit. We also owe $290k on a place three blocks form the ocean that we bought 4 years ago for $800k and is probably worth $1.1M now.

        Can I safely skip the work world and enjoy my health & harmonica now? Thanks

        1. To clarify, the $290k is due over 12 years at 2.99% – which is just too cheap to pay off now. We’re better off using our cash to make more $$.

  99. I’ve been using your tables for a while now to give myself realistic targets and I’ve actually gone back to calculate my net worth from 2010 to see how I am trending.

    I am Canadian so the realities here are much different. First off, we can graduate with minimal debt provided you have an average summer job that will cover a lot of your tuitons and you are fortunate to be able to stay at home during your studies. So to start your professional life with a $5000-$10,000 debt is a real leg up (instead of 20x those amounts). Secondly, a lot of our weatlh is tied into real estate (either investement or primary residence), especially in bigger cities.

    So, here I am at 42, and I’ve just passed the $1,000,000 mark this year (barely). I’ve been targeting a 10% yearly net worth growth and achieving roughly 14% over the last 3 years, mostly due to paying off my mortgage agressively, investing in my company’s shares and saving in my RRSP (the equivalent of your 401k).

    I still have financial goals that I hope to achieve to keep my net worth increasing. I am targeting to fully pay my mortgage in the next 5 years and perhaps start looking at an investment property in 3 years, all the while maintaining contributing to my savings and investments (I target $15,000 yearly in savings and $30,000 in investments). Targeting 10% yearly growth brings me to a comfortable place by the time I’m 60 and gives me wiggle room for un-accounted life occurances (I am a divorcee so certainly can appreciate that stuff happens) and market depressions.

    I want to thank you for writing a thoughful article and giving an “above average person” a target to shoot at.

  100. A large amount for the amounts above have been allocated to the pre-tax contributions. The value isn’t truly the account value as there is a pending tax cost that will eventually come. The PV of the tax cost is probably more realistically the net worth as that represents such a large portion of the analysis.

  101. As someone who has recently discovered the FI community, these numbers provide a great guideline to track against.

    After putting myself through college I had a negative net worth in my early 20s. Upon getting a job in my field, I promised myself that I would never put myself in that situation again and I started saving what I could while paying down my loans.

    I am currently 28 years old and my Vanguard accounts just crossed the 100k mark for the first time today! Here are my numbers:
    Pre-Tax: 68k (This will be the first year at max)
    Post-Tax: 32k
    Home-Equity: 25k

    Comparing my own spreadsheet to the numbers above I will cross above the average by 35 if I can maintain my current level of saving.

    The ‘ah-ha’ moment for me was when I discovered that increasing your savings rate is MUCH more valuable than any hypothetical return rate!

  102. John of the North

    I’m not sure of the ins and outs of the US IRA system, but this article is not accurate for those in Canada. To begin with, RRSP contributions are based on 18% of earned income, which doesn’t include passive income such as interest and dividends. In other words, you can’t contribute any money to an RRSP until you have worked at least one year, and given that $100K is in the top 10% of income earners in this country you aren’t likely to be able to contribute 18K in any year, let alone one before you are in at least in your 30s. Note, we do have TFSAs, which can help you contribute an extra $5.5K, but that won’t bring many people up to the $18K level given the median income is $50K, which only allows for $9K of contributions. Also note that taxes are higher in Canada, and a person that earns $50K, will only take home $41,500 if they have no other deductions.

    Another problem is the money needed for basic living. Most people in Canada live in large urban centres where the cost of living is not cheap. A one-bedroom apartment is generally between $700-$1000 a month. If the average person is only taking home $3,458/mth then the best you can expect is $2,758/mth before other expenses. This often doesn’t even include utilities, which can be quite expensive. And don’t forget large student loans. Yes, I know there is one poster here that was lucky enough to go to have his parents pay for university, but that was back in the 80’s when tuition was much cheaper. Good luck having your parents come anywhere close to footing the bill these days, especially if they are trying to keep up with the wealth curve shown in this article.

    In short, at least in Canada, the main point the article actually leaves out is that the person is fortunate enough not to be burdened by a heavy school debt and makes at least in the top 10% of income earners.

  103. Sam, looking at your chart @ 53 our NW after 30 years of working is approximately that of a 65 year old. Pre-Tax Savings@ ~$1.25M, Post-Tax Savings@~$800K and Own Home w/Equity @ ~$500K. No debt. Two kids College Education all paid for through decades of 529 Plan Savings … Living expense avg ~5K/month. Does that mean I can finally quit the Rat Race :-) … Personal Capital indicates…”You’re in great shape for retirement. We forecast that your portfolio will comfortably support your goals, including $60,000 per year in “basic” retirement spending.”

    1. With a net worth 40X your annual expenses, YES YOU CAN press the eject button! See: Net Worth Targets By Age And Work Experience

      It may be scary, so please try and negotiate a fat severance package. But not a day goes by where I’m not thankful for retiring early. Each day I live after the rate race feels like a gift b/c one of my nightmares is to work my entire life and die the next day after retirement!

      See: Overcoming The One More Year Syndrome To Do Something

  104. Just a quick comment from a 53 year old who has worked hard, invested wisely on my own and been somewhat lucky (as well as challenged by the circumstance life brings).

    Sam is spot on. I read the article(s) and continue to learn (yes, I still allow myself to learn). If I would have been reading this 25 years ago I also might have thought Sam is unrealistic. All I can tell you from an advice perspective, and you’ve heard it many times before, is start investing early. Not saving early, investing early.

    25 years ago I invested $9,000 in my companies stock. This year my son is entering college at an eye popping (to me) $63k/year. I have two years covered solely from this $9,000 investment 25 years ago. Yes, dividends have been reinvested. But $9k to cover $120k years later is a bargain. I could have probably bought a car…gone on an expensive vacation….or made a bad investment. But I didn’t. I’ll include that in my “I’ve been somewhat lucky” comment.

    I changed jobs 25 years ago. Had a meager $7k in the 401(k). Rolled it over…just that portion of my $1.4 million 401(k) is worth about another $100K. Could have withdrawn the money…spent it on something I wanted at the time. But I didn’t. Like I said, please invest early.
    I could go on with more examples but hopefully you get the point.

    Spend your time in a positive manner and trying to figure out solutions and looking for opportunities. Don’t try to make yourself feel better by trying to pick apart data. If you’re financially happy and satisfied with where you’re at, good for you! Actually, great for you. Money is certainly not everything. But having grown up with little, I can tell you that I feel better knowing with certainty that my finances with outlive me. And I don’t sit at home and not spend. I try to find the balance that allows great memories to be created for my family and yet not live outside of our means.

    Best of luck. You may need some. But you can make it happen. Trust me, I did. You can as well.

    1. I have to say I think your comment hit the spot. I especially agree with the last paragraph. Money certainly is not everything in life, but it is good be financially sound and know that you will always have enough to live on and then maybe alittle more. At the end of the day, we are given one life on this earth and we should enjoy it and like you said, create memories. Its all about achieving that balance between enjoying life and living responsibly and within your means. And there are so many ways people can do this by trying to enjoy the simple things in life. I myself don’t make a whole lot of money but I get joy and satisfaction from doing things such as going for long nature walks, just spending time conversing with family and friends and enjoying the company. I don’t feel like I have to spend a ton of money in order to live a satisfying life.

  105. Apologies for the long post but I think this is a great blog and wanted to contribute my $0.02.

    1. My first comment/thought is not directed at anyone on this thread, but in general I find it somewhat comical the conflicting criticisms that older generations give to millenials (and no doubt, in some cases it is warranted, but not always).

    For example, a common criticism is that we are lazy and/or complain instead of taking action. One anecdote of this is how many of us point out (and in many cases rightly so) that expenses have increased while real take home pay has (generally) increased. A common way to combat this is to live with parents longer, which is a sacrifice on both the part of the parents and young professional (parents giving up space/resources, young professional giving up freedom). When this happens, a lot of times the person is then criticized for ‘not growing up’ or ‘mooching’ when in fact they are doing this solely to improve their financial situation in the long term and prevent themselves from being a leech on society long term. So, damned if you do, damned if you don’t. Again, just an observation.

    2. Coming from someone who is on target with the above benchmarks, I would say to take it with a grain of salt. Sam has done a great job of aggregating the stats, but as multiple people have stated, everyone’s path will be different. Similarly, he is free to define metrics in the way he sees fit and using the statistics to which he is privy. It’s important with any type of info like this to use it as a loose guide/framework, but at the end of the day we all have to make decisions and plan for our individual set of circumstances.

    3. To touch on the student debt issue; One of the biggest mass-crimes of the last few decades in my opinion is the phenomenon of the educational system allowing individuals to pursue degrees that are not financially viable with little-to-no guidance up-front. By that I mean that when you are contemplating pursuing a degree in any field, it should be mandatory that you are told how much that education is going to cost you vs. what you can realistically expect to make from it upon graduation. It should be no secret that an engineering degree will, on average, command a higher starting income than a communication degree. At many institutions (especially private), these degrees cost relatively the same, which does not make much sense to me. I am not saying that no one should pursue these degrees, merely that someone should approach it with eyes wide open. I think we would have far fewer people in the debt plight that has become commonplace if they were made to acknowledge this up front.

    Good luck everyone!

    1. Okay, John. You lost me at #3. Specifically your student loan comment: “One of the biggest mass-crimes of the last few decades in my opinion is the phenomenon of the educational system ‘ALLOWING’ individuals to pursue degrees that are not financially viable.” We live in a free society, John! If you are pursuing a degree in Advanced Lesbian Culture in a Utopian World, then shame on you! It is statements like this that give Millennials a bad name.

      YOU ARE FREE TO CHOOSE BUT YOU ARE NOT FREE FROM THE CONSEQUENCES OF YOUR CHOICE.

      1. This is true, and I agree with you on this point.

        However, it is entirely fair to say that the educational system fails individuals when it comes to pursuing certain degrees and their associated loans. Most colleges don’t have personal finance classes or education about student loans. They don’t often encourage students to think beyond the classroom and how they’re going to apply their degree to a real, full-time job. Yes, it’s up to individuals to make these decisions for themselves. But sometimes, when you’re a teenager and have no guidance on this other than “everyone has student loans!” and “you’ll get a good job to help pay this off!” it’s tough to think rationally about it in the way that you can now as an older individual. I know it sounds silly, and you probably think it’s common sense, but these are teenagers making decisions that will greatly affect the rest of their lives. Try speaking to a handful of high school seniors and ask them questions about finances, student loans, and what their plans are…most of them have no idea, and I think it’s because we’ve failed them.

        To add to John’s third point, I also think there’s an issue with businesses assessing candidates by their education vs. their actual work experience. HR departments are knocking people out of their systems based on their education. Interviewees are getting ranked, in part, by the name of the school they got their degree from. I have a friend with 30+ years of on-the-job experience and he can’t get a job because he doesn’t have a masters degree. It’s absurd, but it’s also part of the reason why so many teenagers enter into college and huge loans. Often, the first thing anyone will ask you in an interview (when you’re young) is where you went to school, even if you have work/internship experience that should trump it.

        Getting a bachelors degree used to be something to be proud of, and something that would set you apart as a candidate. Now, getting a bachelors degree is the expectation. To get ahead, you have to have a masters degree. Until businesses stop judging people by their level of education, student loans won’t stop.

      2. I should have clarified. When I typed, ‘allow’, I was trying to allude to what Lauren more articulately described below. Generally, when making an investment, there is full disclosure of the ramifications of the investment, i.e., what you owe, what your exposure is, what your potential gains are, etc. I just mean that when you decide to pursue the degree, the loan company should provide similar information. Apologies for the confusion.

        Agree with a lot of what you’ve said previously, but to the rest of your point, I am a bit skeptical that you think that the majority of people who go to college have the financial savvy at <=18 years old to make a sound financial decision. People who advocate freedom of choice without the same zealousness for creating an aware population to make same choice scare me. People deserve a choice, but they also deserve to be informed when making a choice. It's the same principle as the subprime mortgage crisis, in that you had groups lending to borrowers that had no idea what they were accepting, and in some cases you had people being flat out lied to/sold a 'dream'. If there was a doorway that said 'go here for a better life' over it, and you were free to walk through it, but there was a spiked pit on the other side of said door, you would probably make a different decision based on your level of knowledge of that part of the situation.

        Full disclosure, I am a finance major, and made a good choice with the help of my parents who informed me of all my options when I went to school, but a lot of people don't have that leg up.

        1. John,

          You are obviously a very intelligent young man. Your views are expressed in a very clear and articulate manner. The premise, however, that the “inability” to make sound financial decisions is restricted to the young is a false premise.

          As a Baby Boomer, I clearly recognize the generational differences between my generation and Millennials. Millennials seem less reliant on independent thinking and more on group-think. I know, painting with too wide of a brush, but there are certain inhibitors that impact [some in] either generation from moving forward in a productive way.

          Active listening is a critical aspect of learning. Millennials were the first generation to grow up with computers in the home and classroom, which, in my opinion, has hampered their growth socially. My face-to-face conversations with Millennial tenants involve virtually no eye contact and plenty of texting. Conversely, there are plenty of examples of people from my generation that are poor listeners, which has hampered their ability to make sound decisions. The technology and circumstance may differ from generation to generation, but the “personal responsibility” still remains, which leads me to your comments on the subprime mortgage crises.

          It is difficult to conflate the pursuit of a degree – and all that it entails – to the choices people made during the subprime mortgage crises. The only similarity is that both groups had plenty of information to make an informed decision, but were they listening?

          During the subprime mortgage crises, people of all shapes, sizes and age groups made choices that were facilitated primarily by greed. I was very concerned that one of my properties sold at a 100 percent profit after two years of ownership. Did I know about the banks reckless behavior in issuing stated income home loans, no; or, the subprime lending and lack of government oversight, no. All I knew is that no one should receive that type of return on a property after two years of ownership, which prompted me to sell my entire real estate portfolio and sit on the fence – for two years – until I gained a better understanding of what was actually happening to the housing market. A 25-year-old green- keeper in my golf community making 20k/year bought a 400K home that was promptly lost in foreclosure. A college friend of mine in his mid-50s leveraged 80 percent of his net worth to participate in this market; he lost most of his retirement. Both were fully informed as to their debt obligations, but nonetheless, made poor decisions. Were they listening, maybe, but it didn’t prevent them from making bad decisions. I must say, though, both of them took personal responsibility for their actions – no excuses, they learned from the experience and moved forward.

          Taking ownership of your life and being responsible for your choices is a vital part of one’s growth and development. Blaming circumstances or others for bad decisions will most certainly handicap one form moving forward. I would be more afraid of not learning from those mistakes.

    2. I agree with everything you’re saying. Our generation (millenials) are maturing in a vastly different time than the previous generations. Cost of living is at record highs, wages have barely moved in the last two decades, and student loans is an abomination that I think will seriously mess up my generation in the future.

      To those that say, “Oh you didn’t need to take all that debt and go to a cheaper school”, I say to you that even public schools cost more than $10k/year in JUST tuition and you’re delusional if you think you can obtain some cheaper subpar education and get a half decent job nowadays out of college. Even my dad told me his generation had it much easier. He started working in the 70s where a $40k/yr job as an accountant allowed him to buy a house, two cars, have two kids, and a stay at home wife.

      Am I complaining about it? No, I’ve worked hard, saved well, and have amassed about 400k in net worth at age 30. HOWEVER, am I ignorant enough to think people can emulate my life? Definitely not. Sure I worked hard, but I got lucky as well. After getting a few decent bonuses in my early years (2008-2010), I subsequently invested that at the beginning of the current bull market. Nowadays, from the aftermath of 2008, my bonuses are negligible.

      So for all the boomers sitting pretty with their pensions (which aren’t really a thing anymore), and savings, picture yourself growing up in the world of 2016 making $40k/yr and with $50k of student debt and tell me that it isn’t just a LITTLE different than the olden days. Again, I’m not asking for sympathy, just understanding the changing of the times.

      1. Are you a perfect example of a millennial who is doing well and has it good? I’ve found that a lot of people say “they worked hard, and are doing well, but others aren’t so much” over the past 7 years and hundreds of thousands of comments on FS.

        My conclusion is that WE ARE THE OTHERS. Yes, of course there will be those who are still struggling. But even in the struggle, the access and technology we have is still amazing. Congrats on your progress!

        Recommended:

        The Average Net Worth For The Above Average Person
        Target Net Worth By Age, Income, And Work Experience

      2. Apparently the whiners and the winners are at odds among the Millennial generation. I agree that the Millennials have challenges, but so did many other generational groups; remember the stock market crash of 1929? The difference is that previous generations had two things working in their favor: grit and critical thinking skills. Millennials, in large measure, have neither one of these skills to help them survive.

        I’m interested to see how the whiners cope with the problems their generation is faced with.

        1. I’m a millennial who is not a whiner and does have critical thinking skills. In 2014, my wife and I had recently graduated with professional degrees and begun working, and we had a negative net worth. Now, 30 months later, we own our own home and have an approximate net worth of $150,000. Our home is rapidly appreciating in value, one of our cars (a 2013) is paid off, our weighted average interest rate is 2.85% (before tax deductions), we have no consumer credit card debt, and our overall debt is falling at a rate of $1900/mo. Our parents did not pay for our educations and I just work part time. If things keep going as they are going, and we invest the max allowable $11,000 into our Roths each year, I estimate that we will have a net worth of around $650,000 by 2025, at age 42. Moreover, that figure assumes our incomes don’t increase and ignores retirement account growth. We did several things to make this happen:

          -Earned scholarships to good schools.
          -Invested what we could during the crash of 2008-9.
          -Bought a $240,000 home with 20% down, on a 15 year term, in an appreciating market.
          -Bought used cars that get good gas mileage from a reputable dealer.
          -Milk credit card rewards and Kroger fuel points.

          We’re only in the 15% income bracket, but we don’t spend wastefully and we invest wisely. In our opinion, wealth building is more about what you do with your income than how much money you make.

          1. Well done Dustin! I like what you say about wealth building as more about what you DO with your income rather than how much you make. There are some folks who discredit my progress or what I write because of the income I made while working in finance. But the fundamentals of finance are the same, and it is often times HARDER to stay in good shape or spend more frugally if you have more money to spend.

            Check out some related fun posts on Millennials:

            A Massive Generational Wealth Transfer Is Why Everything Will Be OK

            No Wonder Why Millennials Don’t Give A Damn About Money

            Just keep on doing what you’re doing. It sounds like you have properly mapped out your finances and are tracking things well. See: Track Everything! We Are Eating And Spending Way Too Much

          2. Just want to follow up on this. My wife and I have about 20 years of combined higher education. We finished school with student loans and a negative net worth at age 30. A couple years later, at age 32, we “broke even.” In my last post, from age 34, we had reached a net worth of around 150K and projected our net worth to be 650K at age 42. But life has been good to us and we have made things work even better. About a year after that post, we turned our first house into a rental and bought a second house. Thanks to appreciation and wise asset allocation, we just reached 600K net worth at age 38. Basically, we have gone from $0-600K in the past 6 years. This is what I mean when I say that the curve for highly educated people is delayed but tends to accelerate faster than for those who start working at 22. We didn’t really start working until our 30’s but are now, at 38, are already in the top 10% of wealth for our age. A big part of this was going big into leveraging debt to acquire real estate. We still owe nearly 600K, but own over 1M in real estate and that debt is only at an after-tax weighted average of 2.25%. Perhaps oddly, this strategy prevented me from contributing to a retirement account until age 37. But given how we are now rocketing past our age-group, it appears to be working quite well. We are now projected to reach 1M net worth in 4 years, at age 42, going from $0-1M in a decade, despite having 3 children during that time and never having an AGI above 125K.

    3. John’s number 1 comment is something which is often disparaged today. When did living with parents become a bad thing? My parents lived with my father’s parents until I was almost two. My wife and I lived with my parents for almost a year before moving into our first home. Each of our children lived with my wife and me after college. Our first grandchild was born while his parents were living in my house. We were happy to have the company and they were able to save money.

  106. It’s poor form to respond to my own post, but I do need to acknowledge that when I double-checked my historical net worth, that at 25 I WAS actually behind FS net worth chart (3 years out of school, aggressively paying down debt and saving), at 30 I crossed the line and by 35 was roughly 2.5x … and at that same ratio now (10-15 years later, to avoid giving exact age).

    So, perhaps my disparaging remarks were unfair … for those that actually graduate with debt (not lucky in birth), the FS chart *will* look different … but you can definitely overcome quickly (measured in years) and be well above the line!

    I guess I still reacted to my perception of 20-something attitude as I don’t think I would have claimed how unfair it all is at that age … was simply motivated to succeed in the long term!

    But my own personal financial history actually validates the claim that the FS networth charts set a unfairly high bar for those that came out with debt … BUT, it’s still no excuse for not working hard (and succeeding!) in “catching up” and surpassing those standards!

    1. Hey Chidu,

      I’m not saying the charts are unfair. I’m simply saying that I don’t think they’re on-par with the situation that people are facing today. I don’t see people my age being in such good financial standing, but that’s just my perception and what I know to be true of my social circle.

      I would also be wary of painting an entire generation as lazy. There are some who warrant that description, as is the case in every generation, but I don’t think it’s fair to assume here. Millennials by definition have higher healthcare costs, record student loan debt, a challenging job market, etc. that other generations truly haven’t faced before – at least not to this degree. It may sound like whining, but it’s real data. It’s the perfect storm of financial disaster for most of us. All it takes is one ER visit to knock you off your feet when you’re struggling to pay bills in your 20s.

      I’m working through my plan to get out of it. I’m making 60k+ at a day job and hustling at night and on weekends to make ends meet. I’m still working through my plan of how to be financially successful. And yes, I’m sure there’s more I could be doing, but isn’t that true for all of us?

      I’m not using this chart to benchmark myself against others because I simply know there’s no way I could have achieved these stats. I’m not the “above average” person with family inheritance by definition. I’m carrying a loan amount that, according to most financial calculators, I won’t pay off until I’m 55. It’s not great, and all of my anxiety stems from my finances, but it’s fine by me. I made the decision to go to college and I wouldn’t take any of it back. I’m extremely happy with my career. I’m extremely happy to be able to have a side hustle, even if it hasn’t gotten me any money yet. I’m extremely happy that I’m ahead of most people I know savings-wise, even if that means I simply have a Roth IRA that I’m maxing out.

      I’m forging my own path and doing what I can to get out of debt while also trying to stop and smell the roses occasionally. I’m not whining that I’m not on-par with this chart. I’m not whining that older folks have it so much easier. These decisions are mine, and I own them. I just know that these statistics, as they relate to the younger generation, are far off – especially when compared to other studies that report on the same numbers. There’s nothing in this article that states where these data points are sourced from.

      1. Lauren,

        A sincere ‘kudos’ to you. You sound exceptional, so *keep it up*. I do mean that too … as it takes a certain dogged persistence to keep ‘punching the timeclock’ at a day job and working the side-hustle.

        Take it from someone quite a bit further down the lifeline than you are (and with a grain of salt!!) and is still doing a version of what you are: I now have substantial organizational responsibility (and reasonably commensurate pay) in a corporate gig, but still with a substantial (and time consuming!) side-hustle. I’m an odd bird to have a corp gig amongst my peers in the side-hustle business, and an equally odd bird amongst my corp-peers to have a side hustle. I love the mix and it has yielded long term results. I wish I could say otherwise, but the number 1 characteristic I think that drives significantly ‘beating the charts’ is ‘persistence’. That isn’t sexy and it doesn’t sell books … it’s boring and maybe discouraging … but that’s been my experience. Perhaps others can do it better than I have!!

  107. Quite a few young motivated folks here and a mix of whiners too … claiming the bar is too high at the ripe old age of 20-something.

    I have made a lot of mistakes and am not the smartest guy in the room, but I am motivated, hardworking, and very (very) persistent.

    If you think the charts are tough at 25 and are complaining about it … cry to mommy and go home.

    I am 45-50 and have been about 2.5x FS net worth most of my life. No inheritance, no family money, no free ride in college (but please try to dismiss me and whine about your problems). Shut up and work whiners. To the rest … congrats
    .. try to take small enjoyment along the way and keep at it!

    1. Amen. Same here. Grew up in a dingy 1BR apt on the wrong side of the tracks. Paid for my own school, and cars, and everything from 16 (junior in HS on). We all make bad decisions, just don’t make them be a habit and map out what your goals are – and update them – because they change.

      But I am also going to let everyone on a secret – get married to a great partner. Life is easier with a teammate who has your back and vice versa. Best financial decision (accept that she might be a cost center, but whatever) i ever made was to marry someone who shared the same values and goals and stuck it out through think and thin

  108. Hmm, “not reflective of today’s struggles?” I’m trying not to give you an I-walked-a-mile-to-school-in-the-snow story, but each generation has their own set of struggles. I too paid my own way through college with three jobs and a small school loan. I slept in my car the last semester of my senior year to save money. To me, searching couch cushions for spare change was a sporting event. But, inch by inch, I worked my plan to get out of it.

    I lived with my brother after graduation while interviewing for jobs during the day and working night-audit shifts at night. Once employed, I formed an investment club with a college buddy. We contributed $100/month to the club, which, over time, made money through small incremental stock purchases. We eventually had enough to start investing in buy-and-hold real estate, the rest is history.

    My plan is not necessarily your plan, but there is a way forward for you. I recommend starting by reading 100 Ways to Motivate Yourself by Steve Chandler. By outward appearances, it wouldn’t seem like I would need to read this book, but I read it every year to ensure my head is in the right place. There are many people reading this blog that have found their path in life; others are looking for it. It is up to you to find yours.

    “Man is condemned to be free; because once thrown into the world, he is responsible for everything he does. It is up to you to give [life] a meaning.”

  109. There’s no way this is accurate for those in their 20s. I worked plenty of corporate jobs and no 401k would get me near the low end $8k. I spent three years getting that thing to $2,500 and that was with my employer contributing as well.

    I also think $10k is wishful thinking for a millennial to save each year. But then again, I’m spending an entire paycheck each month on student loans.

    These 20-somethings must have amazing jobs.

    1. Hi Lauren,

      Do you think these numbers are not accurate because you are below these figures and in your 20s? There is no discrimination regarding how much you can contribute to the 401k up to the max.

      Again, these figures are above average folks.

      How old are you and what is your net worth now?

      S

      1. I’m saying this because I don’t know anyone these ages with such a high net worth. I’d say the average salary in my social circle is $45k (although I make a lot more than that), and these figures don’t come close.

        I am 27 with a net worth of about -$20k (that’s negative $20k). I started saving for retirement way before anyone in my social circle, too. At 22, no one else knew what a Roth IRA was.

        1. Got it. I don’t want to be a jerk, so I’ll respond with care. It’s important to look beyond your social circle, unless you’ve got a really great sample set. I’m sitting here with literally hundreds of thousands of datapoints since 2009 when I first started this site and I’ve used hundreds of specific datapoints about savings, real estate, stock market investing, debt, etc to come up with these numbers.

          There is actually a HUGE world out there of people in their early 20s who know what a Roth IRA is and who’ve been contributing to a Roth or a 401k. Everybody who objects to my figures tend to be under 35. Just give it some time. Spend more time reading pertinent articles, searching the web, reading my archives and you will see different perspectives.

          Once you get on the right path, you’ll be surprised at how quickly wealth can compounded. I promise you if you spend a couple hours one day reading posts on this site, or if you want to support financial education and read my Best of Financial Samurai book, you will get super motivated to build your wealth and actually gain more wealth over time.

          Related: How To Save For Retirement If You Don’t Make Much Money

          Why Tough Love Is Important For Your Finances

          Best,

          Sam

          1. It’s not that I need the financial education. I mean, I do, and will certainly read the articles you mention above, but that’s not the main point here.

            If you have literally no way to save money, how are you supposed to save money? One paycheck goes to student loans, and the rest goes to food, gas and rent. There’s literally nothing left at the end. I don’t eat out or eat meat. I don’t go out with friends. I don’t have any expensive hobbies. I go to work, and I go home. I’m trying to get freelancing off the ground, but that’s expensive in itself. It takes a whole lot of sacrifice to max out my Roth every year.

            I went to a relatively expensive private college. Other than the fact that my parents didn’t foot the bill for my entire education (they helped with what they could, which was actually a decent amount), I match your definition of the above average person. If I didn’t have student loans, I would feel absolutely LOADED. I would be able to go out to lunch once a month! I would be able to not let my gas ride on E! I would be able to get the medication I need! But the average person my age has a huge amount of student loans.

            I think that the reason so many people under 35 disagree with your numbers is that it’s not reflective of today’s struggles.

            Where did you gather your sample of people from?

            1. Lauren –

              From your various comments I’ve pieced together the following: You generally fit the description Sam provides of “above average” except that you have student loan debt. If you didn’t have the student loan debt, you’d feel “absolutely loaded.” While you say you have no way to save any money at all each month, you’re able to max out your Roth IRA each year ($5,500)! You make way more than $45k, but one of your paychecks each month goes to student loan reduction. At age 27, you still have a negative $20k net worth. You’ve held “plenty of corporate jobs.”

              If I extrapolate from your claims above, I’d assume you make $60k, bringing home approximately $4k per month after taxes. $2k (one of two paychecks) goes to student loans. At 27, you’ve been paying $2k a month for approximately 4 years now ($96k total). You’ve maxed out your Roth IRA ($5,500) for 4 years, $22,000 in contributions, and since we’ve been in a bull market for that whole period (up 60+%), your Roth IRA is now worth close to $30k. Simple math suggests that your student loans are still around $50k outstanding, assuming no other debt or assets. Those must have been some incredibly large student loans!

              I don’t really understand the negativity toward the charts. I’m now 32, but I first read this post when it was published in 2012 and I was ahead of the chart then and I’m ahead of it now. I know plenty of people my age that are doing very well (and some that are not doing great). The interesting thing, to me, is that I don’t necessarily see many of the 9 traits Sam lists in myself or many of the “above average” people that I know. For the most part, those people are either entrepreneurs or have worked their ways up in their careers to command very healthy salaries, combined with modest living.

              If you ask me, it sounds like you’re on track. Once those student loans are paid off, with the savings habits you’ve already developed (or been forced to adopt in the form of paying your loans each month) and hopefully with an annually increasing salary, you’ll be ready to take off.

            2. You shouldn’t be contributing to a Roth at you age. You should not be putting money into a regular IRA or 401k if available as you most likely will continue to increase your income. Regular pre-tax free IRAs faze out for folks that make more that about $68k per year.

            3. This is just one data point, so take it for what it’s worth.

              I went to university all the way to a PhD program, though I ended up leaving the PhD program and completed a Master’s instead. I was largely able to avoid accumulating student debt.

              As an undergrad I went to community college for three years and an inexpensive state school for three years. I paid for that by working as a dishwasher and a pizza delivery driver.

              Then when I enrolled in the PhD program, again my school wasn’t too expensive, and I worked as a TA and a computer programmer to pay that.

              Finally when I switched to my Master’s program, I went half time and worked for the school half time, which gave me free tuition. That was a big help as the school was an expensive private school. I still had to pay taxes, but Uncle Sam made me do that just-in-time. :)

              Long story short I left school with almost no student debt. Don’t know how rare that is, but I can’t be the only one.

        2. The fact that you are reading this site and thinking about your financial future speaks volumes about the necessity of financial planning, Lauren. My epiphany came much later in life. I realized at age 32 that “a job” was NEVER going to get me to my “freedom number”; that is, the amount of money in passive income that allows you to jump off the grid — or, if you will, no longer rely on “earned income.” It took 24 years for me to achieve that goal. I now own commercial and multifamily property that provides me with the financial freedom I so desperately craved.

          There is an old adage that you become what you think about every day. The time between 27 and 60 will move at lightning speed, so I would strongly suggest implementing plans to provide financial security for the 60-year-old Lauren. Trust me, she’ll appreciate it!

          Step one in this endeavor is to use your net worth as a scorecard. It is amazing what you can accomplish if you focus your attention and strengths in the right area.

          Good luck!

          1. I appreciate the support.

            Where do I invest the $0 I have leftover at the end of the month, though? Where do I find the gas money to make it to a minimum-wage, after-hours job after working my other job?

            It takes everything I have to max out my Roth IRA at the end of the year. There isn’t much more I can be doing right now.

            1. Hi Lauren,

              I recommend doing several things:

              1) Take advantage of the gig economy. I’ve spent the past 12 months driving for Uber on the side and have made anywhere from $20 – $38 net of commissions an hour. Even if you just work 10 more hours a week, that’s $200 – $380 a week, or $800 – $1,500+ a month. There’s TaskRabbit, Rover for pets, Airbnb, freelancing through Upwork, and a whole bunch of other gig economy things you can sign up for.

              2) Start your own site and brand yourself online. The point of branding is increasing exposure and creating yourself new opportunities since there are over 3 billion people online. You can gain a lot of consulting gigs and potentially new job offers once you’ve built a brand people are attracted to.

              3) Refinance your student loans. Check the latest rates with SoFi. They are the biggest disruptors of student loan refinancing today.

              Make more money, leverage the internet, and reduce costs. Of course the sacrifice is effort and time. So the question you will have to ask yourself is how bad do you want to achieve financial freedom.

              Other Related Posts

              Are You Too Proud To Be Rich?
              Blogging For A Living: How Much Can You Really Make?

              Spoiled Or Clueless? Try Working Minimum Wage Jobs As An Adult

              As soon as you find yourself making reasons for why you can’t do something or won’t do something, explore why. Is it really because I’m not doing enough to help others at 5:47am as I reply to you? Is it because I’m out of touch with reality, even though I grew up in emerging countries until age 14, went to public schools all my life, and come from a middle class background living in a townhouse with 8-10 year old cars? Or is it something that has to do with your own beliefs and actions?

            2. I don’t mean to be combative, but come on…

              1) I live in a rural area where there are no Ubers, and the last time I used UpWork, I was out about $1,000 for work that was completed and never paid for. I’m looking for other opportunities to freelance and have applied to about 300 opportunities with no luck yet.

              2) I already have a website and online brand. I’m a director of all things digital at an ad agency, so I have this part covered. But it’s tough to get people to pay for things when they think they should get it for free. So again, I’m working on it but it’s slow going.

              3) I’ve spoken with the various companies that I have student loans through, and they’ve stated that I can’t consolidate them. I truly don’t understand all of this – mostly because I have both federal and private loans – so I’ll do some more research.

              So there’s that. I’m not trying to be a naysayer, and I really am working on getting freelancing off the ground. I get home from my 9-to-5 and spend the rest of my evenings working on it. I’m not saying that these numbers can’t be done. I just find it highly unlikely that these numbers are reflective of today’s generation. That’s it.

            3. I’m 30 and started to work full-time at the end of 2015. Until March of 2016 I owed 5k in loan.

              I have a full-time job in finance which covers my living expenses. But I’ve been working on weekends and some Friday nights at a restaurant in the last 2.5 years. I’ve been also tutoring in the last 8 months and I was able to set aside 13k for investment.

              This 13k is a tiny sum to a lot of people but it’s a start. I’m looking to get clients this year in my finance job so I don’t have to work 7 days a week. But holding multiple jobs has allowed me to meet my short-term financial goals effectively.

              As it seems that your full-time job pays well, I’m sure having additional jobs will allow you to realize your goals, and much faster than it did.

            4. 1. Move closer to work if possible
              2. Sell your car
              3. Get a bicycle
              4. Cancel your gym membership if you have one as you now bike every where
              5. Go to mrmoneymustache.com for additional personal finance advice that will work best in you situation

          2. Your analysis sounds reasonable Jonathan, but $50k in student loans really isn’t outrageous considering private university tuition runs $60k/year these days… $50k is only $12.5k/year x four years… It could actually even be a lot higher!!!

            1. Why do you think people still go to private school and pay that much money when the Internet has made education largely free? Is it lack of education, a great irony. Or is it a lack of financial understanding? Or is it propaganda somehow spending 60,000 a year on a private school degree means a better life despite whether you can afford it or not? I just don’t know someone who went to a public school: the College of William and Mary.

              I agree that $50,000 in student loan debt is not that much compared to a home mortgage for example. Just developed a good income and savings system, give it enough time to play out and things will look much better over time.

            2. I agree that $250k in 4 years is a big outlay, and I’m not looking forward to shelling it out for my kids in a few years (hopefully they get scholarships!) but we all know how things work. It’s at these schools with established reputations that kids start to network, and where company recruiters search for students that match their criteria.

              An internet education just doesn’t offer the same credibility as far as I know.

              If you want to be an entrepeneur right out of the gate, and have the means to do so, then spending so much for a private school may not be needed, but it sure helps get a foot in the door in the big companies if you go the corporate route. Many people do, at least to start out.

              It’s possible things shift in the coming years, since the internet is a wealth of information, and I know there are multiple online schools which are still early stages.. It will be interesting to whether this develops over time.

            3. That’s $50k in student loans remaining after paying approximately $96k in principal+interest over the past 4 years. Though since most student loans have a 10-year or 15-year amortization schedule and the interest rate is typically 6% or less, there’s no way all of my numbers work out. I suspect a bit of hyperbole in the comments from Lauren.

            4. There’s actually no hyperbole, Jonathan.

              I did not say that I have been paying $1,000 a month since graduation. Nor did I say that I’ve paid approximately $96k in principal+interest over the past 4 years. That is your own assumption.

            5. I am actually slightly above the range of net worth for my age. I am 33 years old and a first generation American. My parents fled a war torn country that had experienced genocide. I grew up poor living in the rough parts of a small city. The pressure to do well was unbearable at times. We were told over and over, you need to be the example for the next generation. I excelled in school and when it was time to go to college, I could have chosen to go to a $35-$45k/year private college but chose a state public university on academic scholarship (tuition only). I took out loans for room and board and worked summers and winter breaks for spending money. Had I chosen the other school, sure I could have probably come out making more money because of those connections or the school’s name, but at the time I was only thinking about the amount of debt at the time. My point is that there are other school/education options out there and the younger generations need to determine if the major/school they choose is in line with the average salaries of students coming out of those schools with those majors.

              I paid off all my loans aggressively, but was fortunate enough to be able to live at home for a couple of years rent free. There is no shame in moving home! When I finally made the move to NYC in my 20s living in a shoebox I really had to learn to budget and save.

              I have had a successful career so far which has allowed me to work and live abroad for a few years as well as travel.

              Many of my high school and college friends are in the range in terms of net worth provided by FS. Everyone came from low-middle class families.

              I am technically a millennial, but do not consider myself one. What happened to Generation Y? We are distinctly different from the millennials in our thinking.

              I thought this website was great and as FS has stated it’s for the average above average folks. I am tired of people complaining.

    2. Finance Solver

      Hi Lauren,

      How do you have 0$ after spending the necessities each month? Could you break down your income / expenses in which you really bring in 0$? Also, I’m not trying to brag and just want to provide a combating data point.

      I’ve graduated college last month (I’ve been blessed with my parents paying my living situation and my scholarships paying for my tuition) with a $40k net worth (30k liquid + 10k car that I paid for). Granted, if my parents hadn’t paid for my living expenses, I would probably have a $0 net worth but what I want to ask is, I managed to save and work my fingers to the bone during the school semester both in classroom and jobs (yes, sometimes multiple) while making a below-poverty salary (12k in the US).

      I am sure you make above 12k in your job as you’ve stated but I am curious as to how you don’t have any savings each pay period. Is it because you live in an expensive part of the US?

    3. What is your situation Lauren so people can stop assuming?

      What college/how much in loans did you take out?

      Also, how much are you making that you’re left with 0 at the end?

  110. How do you account for household net worth? Should it be double for a married couple or partners? Maybe something less since you’d have one home usually. Post-Tax may also be commingled.

  111. Yours numbers are spot on for me. I am 62 and almost every item you have listed is within 5% of what I have except for my home (I over purchased in 2000. Since I had no hobbies I thought I would enjoy the house, golf course and lake that was built next to the house. I do not regret the purchase but it does push my home value up about 50% over your projections). I have since paid it off and enjoy it very much………………..great job!

    1. Great to hear! I especially like to hear feedback from folks over 50. The pushback I receive almost always comes from those in their 20s who haven’t had time to let things play out yet.

  112. John N. Chicago

    Interesting insight into you that “above average” includes you justifying that your parents gave you money and support. That makes you “lucky” … it is definitely the “odd man out” in your list of other persoNalgene qualities. It might as well read: “The above average person has wealthy parents”. You can do better than that.

    1. Ummm… what a stupid comment I’m sorry to say. My parents paid for my college by planning and saving even in hard times – they were by no means wealthy at that time (and still are not). But, they felt it was their duty to get us started off on the right foot by sacrificing the BIG house and FANCY cars – for which I’m grateful.

      1. John N. Chicago

        My point was that the list seemed to be about personal qualities, attitude, and accomplishmemt. So to me, including that your parents paid for your school as making you personally above-average struck me as odd. I definitely agree it makes them above average, though.

      2. John of the North

        Lockton, so your comment above talks about how you are above this curve at 50, but then you admit it was because your parents paid your tuition. This, and your insulting comments seems to say enough about your actual character.

        1. First, you can’t judge character by a few internet comments (especially when you take them out of context and make no judgement on the person who provoked those comments).

          Second, my alleged “admission” doesn’t have much relation to my current financial status – its a wash at best because I’m putting two kids through college now and I’m paying their way (not to mention well over $100K in private high school fees).

          But really, you’re missing the whole point of what The Financial Samurai is writing about…

          1. John of the North

            Stating that someone is making a “stupid comment” doesn’t seem to be in keeping with most financial forums I’ve participated in over the years. However, if you’re suggesting that you have a history with the other poster, then who am I to argue?

            The reality is that the fact you had your tuition paid for back in the 80’s certainly does have a large impact. I’m 46, so as you probably notice, the costs for a higher education are just a little bit higher than when we were in uni. In fact it’s more than 6 times higher now than when you went to university. That’s a huge burden on students these days. Although my parent’s didn’t contribute any money to my education, they did allow me to stay rent free, so I came through without any debt, which also helped me.

            It appears that you are brushing off this fortunate circumstance as if it didn’t impact you. I don’t know your life story, but having your parents pay for your education does actually have a major impact. For one, you don’t have to worry if you can afford to go, and then you don’t have to worry about paying off the debt after you finish. There are lots of younger individuals who work for me that can’t even begin to think about buying a house because they have to pay down student loans, and this is in Canada, where student debt is much smaller.

            As for the article, what is really missing in this article is that you really need a far above average income to get anywhere near these levels. Nothing in this list states that your income needs to be in the top 10%, but unless you have some sort of financial windfall then you can have every attribute listed, and never come close.You also need to be lucky enough to avoid a whole range of potential issues, such as losing your job for an extended period of time, divorce, and disability.

            1. I’m not brushing it off at all – on the contrary I stated otherwise in my first reply.

              It’s important to note that I’m also doing the same for both my kids so, very roughly speaking, it’s a wash in my mind. I.e. either I paid my own way and it takes longer for me to build wealth but my kids are on their own – OR – my parents helped and I built wealth faster but I’m paying the current tuition rates for two kids using some of that wealth. Somewhere, in the end, it all evens out.

              Clearly everyone’s situation is different. I suppose I have been lucky in many respects – but luck and destiny are somewhat guided by our own actions.

              Well, ’nuff said from me. Sorry if I offended anyone.

            2. The assumption made here with point number 1: “Someone who went to college and believes grades and a good work ethic do matter.” is that this person will have a decent paying job and will live within his or her means.

              I also live in Canada and are in the same age bracket (I’m 42) and would consider myself to fit the bill on both counts.

              I agree that the financial challenges of today’s youth is much different to ours but the principles remain the same, ie, pay off your debt agressively, save up for a small downpayment on an affordable place, build equity and look to upgrade on your home and put away a bit into savings. That’s the template I used and I’ve also spent about 10 years now essentially not changing my spending habits with my additional income and using it to increase my mortgage payments, savings and investments instead – that equates to nearly $200,000 of additional pre-tax revenue over those 10 years, assuming a 5% yearly salary increase (which is actually quite conservative in your late 20’s and 30’s). I’ve been fortunate to buy in a strong real estate market and have decent returns on my savings and investments but even so, an “above average person” can achieve can achieve these goals with the right approach. I’m a 42 year old engineer, working a 9 to 5 job and have just passed the $1,000,000 mark in net worth with this approach.

      3. Ok. Good for you and your parents. What’s your point?

        I fail to see how this invalidates John N. Chicago’s comment or is even a direct reply to it.

        On the other hand, author did explicitly list having nearly zero debt as one of prerequisites, so John’s comment would be stupid for that reason.

  113. How do you modify your real estate worth over time? For example, I bought my house and have it on my books for $220K. The government taxes it like its worth $238K. Sites like Zillow estimate $260K. Should I keep it on my books at $220K until I sell it? I’d rather be conservative with my net worth, but I’m trying to track to be above average and appear a little behind.

    1. Using comparable market data is the most accurate way of determining what your house is worth; that is, if comparable homes are going for $180/sq. ft., and your home is 2000 sq. ft., then the market value is $360,000. I’ve found Zillow to be very unreliable in determining market value.

      I would establish a relationship with a local realtor who will periodically give you comparable market data.

    2. KP at PassiveFinance

      It’s always a good idea to be a little bit conservative when calculating your net worth. When it comes to my real estate investments, I like to factor in the expenses I would have to pay, should I have to sell the property today. And yes, that includes realtor fees. Why do that? It gives you incredible peace of mind to know that your net worth is the amount of money you would POCKET at the end of the day, should you so choose. Also, it trains you to look at the right number, which is what you will end up with at the end of the day.

      Cheers,
      KP

      1. To be really conservative, just focus on your liquid net worth not factoring in the value of your home equity at all.

      2. I agree. I think the after-tax, after-fees number is better, for real estate, retirement savings, etc.

  114. I think it is interesting how you calculated the post tax/pre tax savings without reallocating the funds to the home equity when the person turns 30. If said person purchased a house at 27, they would’ve likely put a portion of their savings down to pay on it. Part of this would contribute to the equity, making your average by 30 low in home equity. The other part would be lost in the nasty world of closing costs, which may be significant depending on the state. If we estimate that the house did not lose value and they paid 20% down to avoid PMI because above average people are finance savvy. If they bought a house for $250,000, they would need more money than what they would have in their post-tax savings. This would mean that they would have to burrow from their 401k and that would throw off all of your calculations because the quantity of money you are calculating wouldn’t be earning 5% per year, and a portion of the person’s savings would be initially sucked into the blackhole that is closing costs. This blackhole may be very small or very large depending on the location of the house, but it is still initially a setback until equity accumulates in the property and absorbs the initial investment.

    1. I wonder if the author is actually a home-owner…..Did you ever see the movie “The Money Pit?” The cost of upkeep can be considerable…I frankly don’t see your estimated average net worth at age 65 of nearly 3 million. You’re playing with funny money under the idealest of circumstances with no allowance for emergency, catastrophe, divorce, child support, hurricanes, etc…all part of the real fabric of life. Wishful thinking but way off-base in my book.

      1. I think you are missing the whole point – yes, stuff happens, but with the proper planning and saving habits you CAN get there – I’m only 50 but I’m above the curve shown in the article. The article should be inspiration for you – i.e. set some benchmarks to strive for…

        1. Lockon, I agree with your point, the framework of the article is aspirational. Practically speaking, if you took the net worth by age proposed in the article across the broad population, I would guess the high end net worth figures of the “above average” net worth are probably in the top 10% to 20% (so the above average of the above average), but again anyone reading these article is likely trying to improve their financial position more than just trying to be in the 51% of net worth.

            1. You claim though that these are the averages. Between student loans, mortgages, and all of the other debts people accumulate, this is definitely not the average… this may be what we should strive for, but these are not averages.

              1. I’m sorry if my post title was not clear. These are for above average people. I will bold and we emphasize this point even more in the post be on the several mentions of above average. Thank you for reading.

      2. Home ownership is so expensive with property taxes, mortgages, remodeling, buying/selling fees, and other upkeep. I bought a house at $1.6M and sold it for $2.4M 3 years later. Despite that it grew 50% in value, I ended up losing over 65% of the profit to the aforementioned costs.

        My point is, it’s very easy to overestimate the value of a house by forgetting how expensive it is to maintain one.

        1. You still came out ahead unless I’m reading your comment wrong… so it comes down to making about $28,000 in three years (not to mention the tax benefit) vs loosing 36*… hmmm… no brainer really. What am I missing?

          1. ($280K, not $28K)

            Oh, you’re not missing anything. I was simply agreeing with you on closing costs with my own anecdote.

            It was an excellent profit, and I don’t have any complaints about the overall sale.

            I just wanted to point out that people often forget about the fees of buying & selling houses. They hear that housing prices rise 30-50% and expect to make that much profit. In reality, costs could easily reduce that profit to 15-20%.

        2. James silvester

          Fact! Houses imho are not investments. Too much carrying costs!
          The way a house makes sense to me is it must be mortgage free and as small as you can comfortably live in bc taxes/utilities/maitnance stay forever! I am fortunate I paid off my house in 5 years. (Side note grew up poor and received no financial help) It is a very modest 1800 sf ranch worth $360k my family of 4 reside. My taxes/ins/maintenance/utilities are about 800/mo. I am 35 with a net worth of 860k and debt free. I feel one of the main reasons I have become self made is buying a nice enough home that I could pay off quickly. I could have gone for the million dollar beauty but I would be paying on that thing another 25 yrs with higher taxes/ins/maitnance/utilities. I am convinced if I bought that million dollar house my net worth be far less than it is now.

          I am a sportscar enthusiast so if I was a waterpaiting enthusiast I probably would be close to a millionaire by now but you can’t win them all. Got to enjoy life also.

          1. I agree, but like most things there are two sides to this. I own two houses, one worth about 400k that I rent out for $1700/month+utilities. It is fully paid off. I view this as a good investment.

            I did purchase the million dollar beauty (well, not quite – it was only worth 500k a few years ago, but is now about 1M with the massive property increases we’ve seen in Ontario). Mortgage free is nice, but leverage also allows for much larger profits, even accounting for carrying costs.

      3. Of course, even a renter is subject to the financial “money pit” which is included in the monthly rent! The landlord just packs maintenance, capital, tax, insurance, etc. costs into the monthly payment. Like death, there is just no way to avoid them.

        1. The rent one pays on an apartment is based on the rental market that is based on supply and demand. Anyone that has owned rental property, and suddenly had to replace expensive systems like plumbing, the roof, or anything else like that knows this, you can wish you could just tack that cost onto the rent, but raising the rent beyond market would just leave it empty for a long time, so you eat the cost and hope the market will go up the next few years.

          1. However, a savvy landlord will write into any lease agreement that each year the rents will increase. It’s just good business practice, and if a tenant decides to stay and renew, maybe they get a break and only have a 2.5% increase instead of a 5% increase (less hassle for the landlord, etc), but the capital expenditures will be recaptured by the landlord one way or the other.

            I also had a landlord that gave me an overall cut in the rent of 10% per month, but I was responsible for the maintenance items. Fortunately for me, nothing major broke down (we did replace the washer, but went with a good quality used one) like the furnace, and it excluded major catastrophe in case a hailstorm took out a roof, but you can bet he appreciated not getting phone calls when the disposer needed servicing, etc. There are ways to structure rentals, but in the end, Sam is right: rent is -100% with your money, whereas owning, even with all of its expenses, is still adding to the overall net worth over the course of time. Of course, unless and until you SELL it, it’s always been considered moot, but I do like the concept of “future rent saved” by owning outright.

            1. smartrenter

              I’ve been renting for over 12 years since graduating college and my rent on day one was a little over $1000 per month. Today, after 12 years, it is $750 a month. If I had bought a house even at the 2012 low, my total net worth would be at least $100,000 less than it is today. The reason for this discrepancy is that I’ve invested extremely well with money that would have been tied up in home equity and higher monthly costs of ownership. The difference in cost over time compounds. My rent has not increased in over 5 years. I rent to get richer. I love not having to pay for broken things and I love not paying high utilities and property taxes. I love doing zero maintenance.

              1. Can you share what type of living arrangement you’re getting for $750 a month? I’m glad renting has worked out for you. When I was 25, I told myself I no longer wanted to rent b/c I was renting a dark one bedroom apartment with noisy neighbors upstairs. But I also didn’t want to pay more than $2,000 a month in rent to rent something nicer, so I finally bought a week after my 26th birthday in SF. It’s turned out OK, and the property is now paid off and is a rental property.

                The kicker is that not only has it gone up in value from $580,500 – ~$1.2M, the rent has also increased from $2,200 to $4,200 today. The power of inflation alone has been strong. It was the easiest 10 bagger investment ever since I put about $120,000 down at the time.

                Related: Buy Real Estate As Young As You Possibly Can

            2. smartrenter

              For $750 per month, I get a decent 1 bedroom apartment in a safe neighborhood near work which is more than enough for me. I don’t care about luxury and that’s why I have the net worth that I have today. Cost of living is the number one variable that determines how much you can save for retirement. Low cost always beats high cost. Betting on high cost housing to give you high returns is a big risk. I have done far better in the stock market and will continue to do better with stocks. I’ve tracked home prices in areas that I would have considered buying, and the truth is that home values over the long run do not return anywhere near the S&P 500 index. If I raised my standard of living, I would have a much lower net worth today. The key to early retirement is not caring about what other people think of you when you live like a student with no money. A frugal person like myself lives like the poor and is happy with the simple lifestyle. If you want to build wealth and retire early, don’t live a middle class lifestyle, and don’t care what other people think. That’s the only way to make a difference. I am different and I don’t care what others think because I know that’s the only way that I can retire very early.

        2. Cory @ Growing Dollars From Cents.com

          If possible, instead of renting one could get a mortgage and buy a house.

          So the monthly rent payments would be basically like paying off your mortgage payments. The only difference is that you’ll own the house when you’re done paying off the mortgage.

          If not, you’ll be renting for the rest of your life and never own the place you live in.

      4. NoMoreSillyComments

        MG Summer -I could not disagree with you more. People are more interested in buying things to impress the people who they don’t like vs. save like a gazelle for retirement. If you have no pension and you are 60 you NEED a couple million to survive and do things for 25-30 years. Also you mentioned plan for catastrophe???? do you not have insurance healthcare, home, auto? Do you live in a third world country or a flood plane where your going to get wiped out by the next Katrina. Did you vote for Hillary? and by the way who plans for divorce, and calls this fabric of life?

      5. The advice here is sound. My wife and I, now in our 70s, are right on target. We were fortunate to not have any of the catastrophes you mentioned, but we did pay for the college educations and weddings of our three children.

        We bought a house within six months of getting married and didn’t start saving until my wife returned to work after our third child started school; then bought a bigger house and plowed as much as we could into our 401Ks and, later, IRAs.

        After we retired (me at 52, she at 49), and reached 59.5, we transferred portions of our 401Ks to Roth IRAs to get a tax break for our children when the money goes to them. (Many years ago, I told my children that, based on our projected savings, they would each inherit a million dollars. Basically, by doing what this site advises, I was right, so far.)

  115. Sam, it would be cool to elaborate further in this article with a detailed breakdown of net worth detailing asset allocation for each investment category, pre-tax, post-tax and real estate equity.

    I think it would spark an interesting conversation regarding the types and percentage of assets to hold (stocks, bonds, CDs, p2p, primary residence, rental, yada yada) for each investment category because each category has unique tax implications.

    Based off of your previous postings, I gather you roughly recommend a high level allocation of 30% fixed income (CDs/bonds), 30% market, 30-40% Real Estate across net worth. Which type of assets maximize returns pre-tax vs post-tax though? For example, I’ve read that p2p lending is better suited for an IRA.

    Thanks for all you do and keep up the great work!

      1. Yes I previously reviewed the article and found it very informative. I did not see a breakdown of investments in terms of pre-tax / post-tax though. Do you have a strategy that targets certain types of investments for pre and post-tax accounts?

  116. UPDATE:
    FREEDOM 54!!
    I have just calculated my lifetime gross income from early December, 1986 until my 54th birthday (Feb.5, 2016). It works out to be exactly $11,250 on an annual basis.
    MY NEXT GOAL: TWO gross incomes of $18,250 or better (one is job and the other is investment income off of about $365,000).
    That is right-100 dollars a day for every day that passes. I am definitely happy with that.

  117. Greetings Sam. Excellent article along with so many real stories! I came across your website while research on what to do with my finances. It has become a bit more confusing reading so many personal experiences so I decided to directly as you and your audience to hear your thoughts.

    Here is my story, as short as possible.

    I am a married dude (15 years) just turned 40. My wife is 38 we have two children, one in school the other one in daycare. We both work full-time but I also do freelance work on the side. We jointly make $117k per year on full-time salary and perhaps $8K-$15K in freelance work.

    I have perhaps $2K in 401K (long story why I did not do it). My wife has no 401K but has aside around $50K in pension that she can cash, no penalty if she leaves the company.

    We have 3 “good debts”. Our mortgage for the house we live, and two rentals. 1st rental currently own $63K, property is valued (Zillow) at $130K. After expenses it leaves us around $350 cash flow. Second rental we owe $75K and worth (Zillow) $132K. In our primary home we owe $171K and worth about $281K. These properties are finance below the 5% mark and at 30 years fixed.

    We have two bad debts. One auto finance still owe $6K and $25K on a HELOC on our primary.

    In cash we have $80K, $57K are savings and the rest are savings for emergencies such as problems with the properties, etc.

    SO HERE IS MY DILEMMA:

    For the past couple of years, the savings have been stuck there not producing money just an insult percentage the produces perhaps $15 dollars per year. So I decide to buy another property. But have been a few months now and no good deal comes across, I am trying to find properties that gives me some cash flow so I can save that money for emergencies. But due to my limitations, I can only afford condos, the issue is that these condos is that HOA starts in the $300 a month.

    So, I am considering the idea of taking that savings of $60K and pay off my rental of $60K. From my point of view (probably ignorant of many variables) is that with this property paid off I have one less thing to worry about, use the cash flow to reduce all current small debts, and once that is covered, I can save again and get my $60K back in the next 10 years. I can also consider use that income to pay off sooner the other properties.

    The only downside I see, is that I will no longer have a cash cushion for a big emergency (albeit the money is there), I won’t have the power to purchase another property perhaps for the next 5 years or more, tax on generate income would higher (right now I can deduct interest, taxes, and other expenses basically payed by the renter).

    BUT there are many people that suggest it is better to get another property for several reasons (I do not recall one now).

    So here is my question: Would you or any of of you, would recommend (or not) (and why) to use the cash in the savings to pay off the mortgage on that property.

    Apologies for the long post and thank you in advanced for the time to read and answer.

    Chuck

    1. Chuck,

      Paying off my rental properties was a key strategy to my overall investing model; but then again, I’m 16-years older than you. Father Time has allowed me to buy many rental properties over the past 16-years, which has produced a generous amount of passive income. My strategy was to buy properties that produced X amount of cash flow and a minimum of 8-10% equity bump/year. REO’s have certainly been a contributing factor to my overall strategy. Now, I’m a firm believer in paying off my rental property mortgages, but under different circumstances – yours for example – it may make sense to save cash flow and keep buying properties to build up your reserves. I would, however, stay away from condos like the plague.

      I live in a beach community with thousands of cheap “beach front” condos with astronomical HOA/maintenance fees. They generally don’t fit into a “buy and hold” strategy due to a number of factors. Nevertheless, you are asking all the right questions.

      Good luck!!

      Randy E.

      1. Hello Randy. Thank you for taking the time to respond. I am just a regular guy trying to make the best out of the circumstances. Yes, condos are not a good deal in my particular case, but single family homes at the price range I can afford require at least 10K repairs. I could do it, but then my cash reserve will be very low and with four properties I increase my risk of a problem in the event of a big repair, etc.

        That is why I am considering not purchasing another property, but at the same time, it bothers me to have that cash in the bank that is not doing anything for me.

        My thoughts are that if I pay off the loan on a rental, I would have close to $1K per month of cash flow. With that cash flow, I start a snow ball and pay off my debts (mainly auto loan $6K and a HELOC $25K) once this is paid off, I can save again to reach the $60K I put on it, which will take about 6-7 years.

        They way I see it my money is still there in the value of the property but producing something for me. The downside will be my cash in bank will be low, below the $20K mark, but I think I can keep the HELOC open in case I need to use quick money for emergency.

        To me, a simple mortal, this sounds like a good plan but then again, I am not a financial savvy person.

        Does this sound like a reasonable plan?

        1. We are in a deflationery recession. The only play right now is to hoard cash. Once the derivative bubble pops, the world market will come crashing down. It is then that you will be able to use your cash to buy properties 4-5 times what you can buy now

            1. Daniel Ellison

              I’ve been in real estate for the last 4 years. But, I see big opportunities in oil over the next few years. I think real estate is doing well largely due to investors. It was easy for everyone to get a loan before the real estate market crashed. I see their being opportunities in real estate but not as big as there were a few years ago because lending was different then than today. If oil recovers to $52 over the next 5 years, that’s a 10% annualized return. Just like Real Estate in 2007-2009, we witnessed a big drop. Supply and demand. Now that oil was over $100/barrel when everyone could produce and dropped to $36/barrel. Or recovers to $72/barrel over the next decade. Maybe a possibility.

              I would be curious to know what your thoughts are Financial Samurai?

  118. Hard work, taking risk, and a bit of luck helped me where I am today: 49 Year old, stay at home mom, 2 young kids and lived in US and Asia. Net Worth 3.7 mn

    Hark work:
    Worked hard in school: average high school student and went to average university and had average jobs. My first job in 1990 paid me approx. US35k/ Year in California….but you know what I got laid off within the year and this took a huge blow to my confidence to life and what I thought of corporate life. However, It was also a blessed wake up call. I never want to be at the mercy of a corporation and person…at 22 I realized that I needed to be financially free in due course. Spent 5 years in California and probably save ~20k over the years. But I was not happy with my actuarial job.

    Took Risk:
    1994 quit the corporate job, life in SFO and went to China to teach English. My salary in China was about USD75/ month (yes USD75). Why did I go off the rails and do something totally different…? Because I had a gut feeling that China would be (in mid 1990’s) eventually an economic powerhouse. And I also believed that Asia economies was the place to be…I bet my career and growth on this premise. Fast forward I’ve now been in Asia for 21 years, where I’ve amassed most of my wealth. 2 houses in Shanghai, 1 house in Singapore = USD2.5 mn; the rest is then in mutual funds, stsocks. It’s been a bumpy ride – I’ve been fired, girlfriend in HOng Kong borrowed USD50k and we split..it took a while for her to repay me back, started a business and sold it but didn’t get rich. My NW changed when I got married at 38 (it was 2002 my NW was about USD300k) , bought houses in Shanghai…then China currency and housing went on an unstoppable uptrend.

    Luck – it’s whatever card your dealt in life. And what God has planned for you.

    End game – USD5 mn..then call it quits from corporate life. And do something I want…e.g. farmer, vineyard, orchard farm…something that is not having me locked to my desk and it needs to be the outdoors.

  119. Hey all. I am 33 with a company that does about 22 million in gross sales per year and 2.3 in investments. Own 3 cars and 2 motorcycles outright and my home worth about 400k. I feel as if I’m doing ok but I think sometimes that I should pull some out of investments. By made me 80k last year alone but maybe that was luck?? I live frugally don’t need anything really and just be me. I work hard and treat my people right. I M engaged and happy and love my life but still want or feel like I’m not doing it all right. People may think this or that but I know I work hard and try my best. That’s what matters right ? Forget the “jones” family and be yourself. I don’t care what others think although the I have tact and diplomacy to get through the corporate fundraisers and whatnot. How can I make more money. I just don’t wanna worry about it ever again as it is only a tool to enslave us all and I want to be free. We all deserve to be free. So how to achieve that?

  120. Interesting data. Here’s a generalization for you. There are 3 types of people:

    1. The Above average person (you described)
    2. The opposite of that person (average or below)
    3. The extraordinary person (the Steve Jobs, Howard Hughes, Richard Bransons of the world)

    I’m an inbetweener, in between 2 and 3 above. I came here to look at the data which is interesting. Most of the advice seems good generally speaking. But, I waver a bit from your “above average” norm: I quit college/never finished my degree. I don’t plan to ever retire though I could in a few years. Ditched the 401k 10 years ago (it’s not worth my time). I also have no friends. Few mentors. Most of my acquaintances are similar folks and all are pretty much the “Above Average” you describe here because of the company I work for / city I live in, these are my acquaintances. Most all of them find me: a) Intimidating b) a prick c) out of touch 1%-er d) Someone they can take advantage of or e) a fake.

    I’m having a very difficult time the last few years continuing on. I don’t relate to anyone or find mentors other than people I read about who are out of my reach. I sit quietly most of the time or just avoid social events. I stopped offering input. No one is interested or understands any of my advice / thinks i’m insane. I’m becoming a hermit. People vehemently disagree with me look at me like I’m from mars or cling to me in some needy / take advantage or even fix-me way. Many hate me, because they view me as a 1%-er (though i’m close, but not quite), including my boss who often wonders why I even work here (my day job is a safety net to me). So, what advice do you have for me? Is it worth trying to be extraordinary or does it just make me a dick? When history’s business moguls are asked these questions, they pretty much all say it was worth it. I’m finding it difficult because I’m not rich enough yet for any of these people to become my close friends but I’m also becoming someone that the “above average” person can’t relate to either. I’m having a difficult time managing the onslaught of would-be “friends” who aren’t friend material, but just using me in some way. I don’t know what I’m asking for exactly with this post. What advice do you have for me I guess? Maybe this is the wrong place to ask…

    1. “Having no friends” is a concern. You need friends to get ahead in society. Maybe don’t focus on the finances, but focus on better communication skills. A great communicator trumps a brilliant mind in my book.

    2. Sounds like you are being separated from the world, but you keep trying to follow the world. Change your focus and it will change your heart, your life, and fill that empty void you keep chasing. You will not find it in money. You will not find it in friends. You will not find it in material things. You will not find it in the frivolous things of this world. There is one place to place your trust and the rest will fall into line.

    3. Ah, the age-old question: Can money buy happiness? Probably the wrong blog for this type of question, but what the heck. The relationship between what we earn and how we feel is obviously unique to each person, but I’ve known a lot of happy, successful and optimistic people in my life. They all seem to have the following in common:

      1. They focus on others;
      2. They are productive;
      3. They realize happiness is found from within;
      4. They have a “meaningful” circle of friends;
      5. They have a positive outlook on life; and,
      6. They have a content mind.

      I’m sure there are many others, but these are top in my mind. I follow this blog to discover ways to build wealth and “security” for my family, which is a contributing factor to my overall happiness. Increased wealth doesn’t improve one’s mental health, that comes from a variety of other areas (e.g., confidence, self-esteem, and being able to manage day-to-day life.).

    4. Agree with what Sam said. Try to avoid friendship as being something one needs to be “..rich enough” for. From the postings on this site, we see a variety of motivations for earning more and managing wealth well (family, retirement security, charitable causes, etc.). Money is just a tool, and it’s fun to learn more about it – especially when it is so incredibly easy mis-manage.

      You seem very articulate and intelligent, and there are probably hundreds of people and causes that you could have a great positive impact on. For example, visit a local school for special-needs kids and just volunteer to look at their books. A few hours of your time would probably bring huge efficiencies and help them help others for years to come … just one example of an wonderful thing you could do.

      If you do, please post back in a few months and share with the blog on how it went.

      (Sam’s note: See “It’s OK To Love Money“)

  121. UPDATE:

    I am proud to say that after just three months on the job, I am now making $13.50 an hour (up from 13) as a janitor.

    I believe that I am in a very strange business (I was let go about 15 months ago as a janitor and yet, I tried harder there than I do now).

    The key for me: Pick a service provider that can match your skills appropriately.

    I shall probably be a solid millionaire by age 65 (11.5 years from now) and yet, never make more than 19 thousand for one year’s work.

  122. Robert Frost

    I don’t understand what you mean by a 20% down payment giving a 10-15% return per year. Can you explain that more?

  123. Does it matter too much how the wealth is allocated? I am 34 and have $210K in a pre-tax 401k, $40K present-day lump-sum value of pre-tax pension, $110K in a Roth IRA, and $300K in real estate equity. I only have $15K liquid in a bank though and owe about $30k in car and student loans.

    So I guess that makes my total: $250K pre-tax savings, $95K after-tax savings, and $300K real estate equity. How much should I be trying to restructure this or do the proportions not matter too much?

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  125. I think REO is in a state of analysis paralysis; that is, “the state of over-analyzing (or over-thinking) a situation so that a decision or action is never taken, in effect paralyzing the outcome.” I am one of those infamous Boomers he is referring to in his post. I have profited handsomely in real estate between 1995 and today; granted, I had to sell everything in 2005 and sit on the fence for three years, but I started buying again once the market bottomed out.

    There are, admittedly, deep structural challenges with the US economy that will need to be addressed in the next election cycle; however, after factoring in one’s age and the time remaining before assuming room temperature, it is imperative that “some risk” be taken in order to fund a comfortable retirement. I have been buying REO’s in a beach community for the past three years. They all have a positive cash flow and have appreciated 10 percent/year. A rising tide will certainly float all boats, but you have to wade in during low tide to enjoy the benefits that high tide has to offer.

    1. Well said Randy E. I, too, am one of those Boomer’s and have invested heavily in RE (20 rentals at present) for over 30 yrs. The statement that we will flood the market when we all sell our homes is misguided. Studies show that the vast majority of people “age in place” and I don’t see builder’s going crazy with spec building any time soon. Our personal residences (3) will be left to our son. He may sell one or two – but boomer sales won’t flood anything imo. The population continues to grow and I don’t see that reversing. People either rent or own – both of which requires a “home” exist.

      As to the stock market comments, if the P/E ratios make sense people will continue to invest. To suggest that people will pull market-changing amounts out is far-fetched.

      I fully agree with your “educated risk” investment attitude and discussion of analysis-paralysis. Those that blame external factors (fear, basically) for their financial short-comings are simply making excuses for their poor financial decisions and lack of wealth.

  126. The #s above are a nice starting place, thanks for putting them up….But let’s do some real thinking….about the Boomers: the richest generation ever. They have driven RE and stock prices up to high levels starting about 1981. Now, these Boomers will retire. Know what happens then? Prob. the biggest stock market and RE crash since 1929.

    Now, no one knows WHEN that day will be. But according to statistics, it should be fairly soon. Think not? Hmmm, look at it this way: who will BUY the RE if the Boomers start listing their 2 or 3 homes? Who will BUY all these stocks? Gen X? Gen Y? These 2 don’t have the money or the numbers to do so.

    So, be wary about anyone touting the returns of the stock market or how good an investment RE is. They WERE good, indeed they WERE. But will they be in the immediate future? A cursory glance at the stats foresees some dark clouds heading this way….

      1. I’d probably agree with REO to a degree since RE and the stock market are both being propped up by these ridiculouly low interest rates, and yes, I’m aware of the big bust that already took place.

        However, I think that since we already went through a big bust so recently, the government is doing and will continue to do whatever needed to prevent it from happening again…

        They will try to inflate away the national debt and this will do it’s part, including some form of wage inflation eventually.

  127. Blake Stover

    I think one thing that is missing from the article is the question of where you plan to spend your retirement years. I goofed off in college the first time through and dropped out with about 80 credit hours. I went back after 15 years in 2005 and at the time was making about 33k per year. But I had a 10% 401k allocation and 9% company match and profit sharing during the years I was making the lower salary. I had bought a house in 2003 with inheritance money, so I had what ultimately ended up being $185k in equity when I sold it and bought a new one this fall. I took part of the equity for remodel and the value of the house rose about the same as what I spent on remodel (value add remodel like hardwood floors and kitchen upgrades).
    So at age 45 I find I am worth about $500k and my only debt is a 4.25% mortgage that I already have about 50% equity in a $308k house.
    What matters most here though, is it’s in Texas. That same 308k house transported from north dallas to San Francisco would be $1.5 million. Cost of living here is quite low compared to California. There is no state tax at all either. So if I retire on $3million (which is a likely target for me) that to achieve a standard of living in SF similar to Dallas at $3 million you will need somewhat more money saved up. $3 million in Oklahoma where I am from likewise would get a standard there somewhat like $4 million here.
    So, when deciding whether your nestegg will meet demand, consider where you plan to retire. (This is why a lot of Texas retirees move to Mexico. For that $3 million there, you get a standard of living comparable to $6 million in north dallas)

    1. I don’t think it’s missing anything.

      I think the point of the article is just to let you know where you may stand financially (in terms of net-worth) when compared to your peers, if you are an ‘above-average’ person as defined by the author..

      One can make all kinds of arguments as to who is and isn’t above average, but this author has set out his definition, and given some assumptions to go along with it.

      A 45 year old professional with a decent job, who had a bit of help from the parents, but not ‘too much’, who made wise investment decisions, could theoretically have earned and saved $X in X amount of years…

      People have different goals in life.
      They live in different places and they pursue all kinds of different paths for a variety of reasons. I consider this article a sort of ‘keeping up with the Joneses’ cheat sheet to give an idea of the likely net worth of buddies who may have grown up, gone to college together, etc who are in a similiar situations…

      Anyone can feel free to take anything into account that they like when comparing themselves to the standards in this article.

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  130. UPDATE:

    Due to my new job, my lifetime gross income from late 1986 to August 2015 (age 53.5) will be about $320,000 (about $11,130 per year).

    If I am able to keep this job, between my investment income, my job and the occasional high paid music gig, I am virtually guaranteed 100 dollars a day + until retirement.

    This is not too bad when you consider that I shall probably never hit the $20,000 mark for one year’s work EVER.

    1. Sorry Folks.

      I guess “EVER” is redundant here.

      It could very well be that the $18,335 (2001) will be the highest amount I ever made for one year’s work.

  131. Your charts are great. But I would love to know what other factors are taken into account.
    Is your 401k and or the Post tax Cash, a straight up saving every year without taking into account a non- working or working part-time spouse and 2 or more children? Do you take into account 529 contributions for kids? Childcare costs are raising phenomenal.
    What about how much equity you have in your home? Is that factored in?

    I ask as I would like to know how behind we are:)

  132. I have been inspired by your blog and I really enjoy reading your blog. It was definitely one of the blogs that made me want to start blogging myself!

    I just made a Net Worth model in Excel and was hoping to share it with you. I have posted it on my website:

    It gives a person a rough estimate of their net worth over time given multiple inputs. It would be interesting to see the results and forecast you have currently and what my model would spit out!

    Have a good day,
    Erik

  133. Question: One thing the article does not explain. Should your savings in these columns reflect your post home purchase savings? My situation: 30 y/o, working corporate sales position. Graduated college 2008 and didn’t land job in my field until early 2010. Have been contributing around 8k annually to 401k plus company match and maxing out Roth contribution for 3 years. The 401k has about 65k right now. Have 50k savings right now and am looking to put a down payment on a home here in next 3 months. From this article, it sounds like I will be WAY behind once that savings drops to 10k after 40k DP on 200k home. Please share some thoughts here.

      1. *Your* home’s net worth is — by definition — part of *your* net worth.

        There’s no reason why you should not split your net worth spreadsheet into categories (house — or down payment savings, retirement assets, liquid, illiquid, etc).

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  135. Great website. I’m a 37 year old woman from the West who moved to SF two years ago. Net worth is $675K… bad grades in high school (1.9) and college (2.9)… worked throughout college (Econ), MBA… success is due to RE and decent jobs in banking/finance to keep it all afloat.. Bought first home at 23 or 24, bought four or five more… 401K is still only $40K because I always drain them for downpayments, but growing fast now at a rate of 30K or so per year. Doubled salary with the move, bought a condo, rent out extra bm.. adding net worth at a rate of 80K a year between equity, 401K, and expected appreciation of 1.5% on 2M in property. — nobody provided down payments, parents helped a little with school (maybe 20K total). RE is the way but it does take a certain willingness to suffer… e.g travel to a rental 30 miles away to pull a toilet at 10:30pm because you can’t yet afford a plumber ;) Also – I am a terrible saver – i never like to put money in an account just to sit there… always want to put it to use ASAP.

  136. Interesting article. I am 29 and have been working for 3 years full time since grad school, and renting. It has definitely occurred to me how much wealth I would accumulate if I bought a house instead of renting. But according to calculators I used online, I don’t actually save or make any money considering my low rent, until after like 60 years. In some calculations I NEVER make more money in a buying scenario vs renting even if my rent increases with the market, because my rent is relatively low and my paper assets will grow not being tied up in my house.

    Anyway this is all financial nerd math that we indulge in. What really matters to me is becoming financially independent so I can have the choice to live and work wherever I want, doing whatever I want. Buying a house seems to lock me into a place, and currently the place I’m at is nice but I wouldn’t be here if it wasn’t for my work, which also isn’t bad but I would like the freedom of moving to, say, Hawaii if I wanted to. So for now I’m renting and building paper assets. Especially since I plan to be FI in 5 years, 4 if I’m lucky and 6 worst case scenario. Then I want to live in other countries and stuff while I continue to build my business and maybe get back into research in a University. Would be a shame to me, personally and not necessarily for anyone else, to just live in the US my whole life.

  137. Update:

    I just landed a 13 dollar an hour janitorial gig and I am ecstatic!!

    If I can keep it, may annual average salary will jump from 11 thousand a year to 15 thousand a year.

    This wage is still about 55% the average wage in Ontario BUT I definitely do not mind.

  138. her every cent counts

    This is a great article, and definitely makes me breathe a sigh of relief as I feel that I’m on track.

    One question – how do you determine what networth should be for a couple? Are the charts here assuming both parties in a couple have this month networth (so the actual amount in a married couple for savings should be double) – or does this change for married couples? At 32, I have about $350k saved but my future husband has maybe about $100k. I worry that we won’t have enough to retire.

    1. But why worry though? $350,000 + $100,000 = $450,000 once you get married. Are you worried because you worry about your abilities to make money and support the two of you? If so, welcome to what a lot of guys go through all the time ie it’s normal!

  139. Okay, so I turned 45 not too long ago, have over $300k in the bank, my home is paid off, no debt of any kind and I’m a civil servant. Net work is about $500k. Being a civil servant, I’ll receive a pension when I retire, have some years to go, my thought is this. Of my savings, I’m only investing $50k. I’m using my father’s finances as a model, he was also a civil servant and did NOT have a 401B, invested in mutual funds here and there and he did very well/didn’t even need to rely on investments due to his state pension. I sometimes wonder if it’s truly necessary for me to invest in a 401B/IRA when following my current model I typically save about $100k every two years at this point in my life. Again, I’m 45 now, thoughts?

    1. You are laughing.

      I think that most of the the top 1% of all income earners cannot sock away 50 grand a year.

      As great as your accomplishment is, I think that mine is greater:

      1) My lifetime gross income from December 1986 to August 2015 (age 53.5) will be about $316,000 (about $11,000 a year).

      2) 73 % of my $500,000 net worth is in investments.

      3) I am expecting a 7.5%(+) long term return from my equities and a 2.5%(+) long term return from my bonds and cash (a 5% average).

      4) I shall make $18,250+ (that is 50 dollars a day plus) a year (which represents 166% of my average annual salary) even if I do not work.

      Maybe not enough to retire BUT a good cushion in bad times.

      1. I’m laughing?

        I wasn’t trying to ‘one-up’ nor was I inviting a ‘one-up’, what would have been actually constructive would be someone’s thoughts on whether investing further or not

        1. I believe that the benefit of rolling over your 401B to an IRA is that you will get more investing options.

          The fees with an IRA are also lower than what your 401B will charge you after you leave your job PLUS you do not pay taxes when you roll over.

          My conclusion: It is not necessary but still better if you invest in a 401B IRA.

  140. Here’s my story…

    I went to a 4 year college back in 99-03, cost $38k including room/board.

    I never finished…I was about 12 credits short, but since I changed majors I would have likely needed a full year to finish…even if I passed all my classes, but the material was just too difficult.

    I moved out of college with $10k in loans and $12k in the bank (I was working when I went to college.) If I could have redid things, I would have maxed out all my loans (3.125% interest instead of the 5% mortgage)

    I put $10k down on a $82k house when I was 22. I was working a part time job making $8.68/hr with a lot of overtime. Between 22 and 28 I was making between $22k and $28k a year. The house needed about $18k worth of repairs in the first 10 years and time were tough, but I put any extra money towards the mortgage. I started getting better selling things online and with my regular job and online my best year was about $65k.

    I paid the house off before I was 31 and the student loans shortly after. I lost my full time job due to a downsizing and sell online full time now. Depending on how much work I put into it, I can make $30-50k a year, but I would like to take it a little easier now.

    Right now I’m 34 I have a fully paid off house worth about $110k, 2 cars for a total of about $8k, and about $115k in bank accounts and investments, and no debt. (4 years ago I owed about $15k on the house, 3k student loan, had one $2k car and maybe 10k in the bank.)

    Having no debt makes money build up fast, (look at how much changed in the last 4 years) people say you should invest before paying, but in my situation, not having to worry about money sure freed up the opportunity to take more chances and not be tied down to a 40hr a week job.

  141. Wasn’t the premise of marriage based on for better or for worse? As a single parent who is above average, never been married, and still able to retire at 35, why wouldn’t your retirement be better being married? You have the extra income of your spouse and not everyone has the financial genius that got us where we are today. Some people love to spend and others love to save. Now I wouldn’t get married without a prenup but that’s because I have a child from a previous relationship and a business with whom I have partners. Therefore, in my case, combining finances would not be the best route for me. It also sounds like you are a bit resentful of your spouse.

  142. What happens when you are within range of your ‘age’ guide for overall wealth accumulation but married someone who was the opposite of you? I’m a 40 year old woman that has *never* made more than 200k in any year (and has made less than that the last few years as I had a baby and surprise, corporate America doesn’t love that). My overall wealth combining 401k, IRAs and savings is close to 600k. But my spouse started late and though he made more than me at certain points, he’s got maybe 1/3 of what I have. I love him but get so annoyed at his previous irresponsibility. Mostly I’m annoyed because though he’s slowly started to ‘get it’ (thanks to me) he’s constantly breaking his arm patting himself on the back for having what little he has now (he thinks it’s a lot because he’s used to pissing away every single dime he had before he met me). I just feel like I did everything ‘right’ and i’m going to wind up retiring on a lower income/lifestyle than I planned for due to him.

      1. VERY good article, thanks. The whole bit about the taxes is exactly what we are going through right now. It’s so frustrating. Between corporate America dinging moms/married women and the gov’t taxing dual income families….it’s just depressing. I’ve worked hard for so long and sacrificed and it seems now to all just be for nought.

    1. Sue, it sounds like you have been very responsible and you’ve had a strong career.

      Your spouse probably needs more encouragement about saving, but at least he’s moving in the right direction. If you two work together, it seems like you have a great future as parents and likely have enough for a comfortable retirement.

      You are young, and your savings have plenty of time to grow.

      You can do it!

    2. I just feel like I did everything ‘right’ and i’m going to wind up retiring on a lower income/lifestyle than I planned for due to him.

      Well, why’d you marry him? Why’d you have children — they *really* hit you in the pocketbook! — with him?

    3. bossasaurus

      Wow, sounds like some other issues that need to be worked out here. What happened to “…for richer or poorer” in marriage? Shit man, have a talk with your hubby and get your feelings out there for him to hear (not the message board people) or that divorce is going to cost you more than his ‘pissing money away’ ever will.

    4. Glad your not my wife, my wife is broke but I don’t care, I’ll take care of her forever cause I love her.

    5. Hey Sue, no offense but it seems your problem at this point is not your finances (with a total of 800k for you and your husband at 40, you’re very well off), but your marriage. The fact that you’re with a person at age 40 and are blaming him for his “mistakes”, is a problem that *you* need to fix on your end. I would almost argue that it’s not your husband’s problem here, but yours. When you married that person, you accepted the good and the not so good in him.

      Not everything is perfect in a marriage, but as Sam told you in a much more nice way than I just did, is that you should be looking at what happens next, as a team, rather than what happened before. What’s done is done, try to make things better, and lose the resentment, it’s not going to help your family/team.

      1. Agree with this one…this sounds like you are having regrets over your shared values and habits post marriage and this is something you should have thought long and hard about before marriage. It’s like when you’re young and your better half is a jeans and a t-shirt guy and you keep hoping that he will grow into wearing a tux. You need to have eyes wide open of what kind of person you are committing to share your life with and that you will be ok with that over time. Can I get my guy to wear a tux today…outside of the wedding, I’ve never really tried…I always liked him him in jeans and knew what I was getting into. I also agree w/the comment samurai made that you can grow and change together – something like that…but if your man grew up with a sense of lack, or very was very poor, or who knows, you may not get him to where you are and need to be able to live with that or make a different choice while you still can.

    6. That makes two of us. I am in the same boat where my wife has made bad financial decisions in her 20s due to her lack of financial wisdom and having un-supportive parents. She has student debt north of $40,000 and is now pregnant with our first child. I make almost 3 times her income, and as a result of the baby, she is dropping to part time and now I am taking on even more financial responsibilities. I am 32 and worth a quarter of your savings. I learned that in life, there is no mathematical 1 or 0, meaning you can’t get everything or lose everything. Wouldn’t it be nice if my spouse had the same income as mine and was as financially wise? Absolutely. But what if that extra wealth came with only half the genuine love and respect that my wife has for me? Will I be as happy as I am with her? One thing is sure, as poetic as this might sound coming from a scientist, not everything in life can be labeled with a price sticker

    1. I am very impressed BUT could you elaborate (including revealing your lifetime gross income).

      I bet that it is at least FIVE times my $315,000+.

    2. i graduated from college with a bachelor degree in electrical engineer (gpa 3.5) by age 24 and owe $20g in student loan. I never pay back my loans. I decided to not use degree and become a manicurist at a nail salon. I worked 60 hrs a week making $60g a year. Now 4 years later, I’m 28 and I open a nail salon that cost me $30g and currently making $15g/month. I currently have $120g saved. I rent $700 a month. Any advice?

  143. While I don’t doubt there is an important role in real estate in accumulation of wealth, I have a question about this article. When you wrote “the return on rent is always -100%” and “there is never a positive return on an asset after a month…” True statement. But how it relates to being a better way to accumulate wealth, shouldn’t you consider the relative return of assets used to invest in other areas? In other words, if I had 100K, when deciding on renting or buying, I would have to consider the return of the home (allowing for all the things you mentioned – tax breaks, etc) but you should also consider the return of the stock market (or any other asset you choose to use the money on instead of a home). Also, shouldn’t you take into account how much money you spend to invest in the home (ie the cost of the loan?) As a general rule, folks pay massive amounts on the lifetime of their loan –sometimes over the cost of the home itself, right?
    My second question relates to the returns of real estate vs the return of the S&P 500. Historically, as you stated, home prices return around 2-3%. How does “putting down about 20%” make the 2-3% return of a home turn into 10-15% cash-on-cash basis? I totally am missing out on that math. If I plunk down more or less on a home, how does that increase the return? How much of an asset you own is independent of how much its value fluctuates, right?

    Lastly, just like there are tax benefits of owning a home, there are many tax benefits related to various other investment vehicles. 401K’s, Roth IRAs, etc – all have great tax leverage that cannot be duplicated any other place. Homes also have many unknown costs – repairs, risk of depreciation or stagnation, etc.
    Just a few thoughts of mine on how home ownership vs renting is far from an open and shut case. I’m a firm believer that renting until you’re able to pay almost full cash for a home is the best way to go, in order to avoid paying somebody interest. (unless of course, that interest rate is low enough that your money is best suited invested in the market where you can potentially get higher returns!) Which is my point exactly – this is a very complicated subject!
    -G

    1. You’re right, you should consider the relative rates of return of various asset classes. Renting vs. owning is not strictly an investment decision, and it isn’t always most sensible to buy your primary residence. In my case, we’ve been renters our entire adult lives, but own 3 single-family rentals (outside of our area) and have interests in a number of other pieces of real estate, and this has been a key to building wealth for our particular situation.

      To answer your question about how 2-3% growth becomes 10-15% return with leverage, it’s simple – if you put 20% down on a piece of property, you still get 100% of the increase in value. If 2-3% of 100 is 10-15% of 20. (You also absorb a much bigger loss, percentage-wise, if you sell a leveraged property at a loss.) But assuming standard increases in property values over time, if you can leverage up and buy 5 properties with 20% down for the same amount as you’d otherwise have bought 1 property with cash, you will receive 5x the return from appreciation in both percentage and real dollar terms (but your cash flow from rents will be lower because you’ll be servicing mortgages).

    2. Christian ✝

      on $100,000 house, it will take you 14 years until your interest equals your principal. it will take 17 years until your total monthly mortgage payments you have made so far will equal the $100,000 your home cost. The remaining 13 years of payments will be profit for the bank (for illustrative purposes as bank takes interest first). Zillow shows rent on $100,000 3BR home is $1150 per month. if you were to rent a home for 17 years for $1150/month while saving up to pay cash for a $100,000 home, you would pay $234,600 in rental costs just to hand the bank $100,000 in cash so you avoid paying interest on the house.

      if you were to buy the house and live in it and double your mortgage payment from $477 to $954, you would have the home paid off in 10 years 9 months and you would pay only 23,000 in interest instead of 72,000 in interest for 30 years.

      1. Yeah, you also have to include the costs of the mortgage, maintenance, upkeep, peoperty taxes, school taxes, etc. In most markets a home is a lifestyle choice, not an investment.

  144. I consider myself to actually be quite average in net worth for my age when compared to the other people here BUT my average gross salary is WAY below the average SO I am actually quite proud:

    1) Lifetime gross income from December 1986 to February 2015 (the month I turned age 53): $315,345 (this works out to be about $11,195 on an annual basis).

    2) I did not start saving for retirement until 1990 (age 28).

    3) I have given away about 25 grand to charities over this time span.

    4) Hourly wage positions: 5, 7, 8+, 9, 9.5, 10.25, 10.43, 11 (part-time music gigs much higher but very sporadic).

    5) Net worth: about a half a million when taking into consideration investments and material assets.

    REASONS: An excellent financial planner and NON MATERIALISM (for many years, I wore a sweat shirt with the saying “MOXIE MUSIC WATER”.

  145. Pingback: Median Salary By Age And Sex In America | Financial Samurai

  146. Thanks for this article! I read your blog on 401K balances and was surprised at first to find that, despite saving aggressively and maxing out for the last 5 years (I’m 33), my husband and I were only “on par” with your optimal range (now ~450K) . However, our total net worth is $725K (not counting any assets other than our home). Given that there are many ways to accumulate wealth and different risk tolerances for different age groups, I think the total net worth measure is probably the most accurate way of measuring one’s savings progress.

  147. Great story, William! Your life story is a true indication that where you start in life has no bearing on where you finish. I know this because my story is similar. I too came from a large family of limited means. My parents, albeit good and hardworking people, were brutally honest with their kids. We clearly understood their responsibility was to get us through high school; what we did beyond that was our responsibility. I’m happy to report that four out of six kids graduated from college. I had to sleep in my car the last semester of my senior year, but I did graduate. I enjoyed a 25-year career in corporate sales and now live off of passive income generated by real estate investments. I think six key lesson have helped me along the way:

    1. Know what you don’t know. Learning is a life-long endeavor, so intellectual curiosity is a key to success. As a great man once said, “If you are not willing to learn, no one can help you. If you are determined to learn, no one can stop you.” [Zig Ziglar]
    2. Working smart, not hard. Focusing on “high-priority” tasks that contribute to accomplishing your goals. Work towards your objectives every day.
    3. Follow your passion and have a clear sense of direction.
    4. Do the right thing. I’m a big believer in Karma, so “doing the right thing” and helping people along the way is critical to ones success in life.
    5. Marry a good woman! I have an incredible partner who has always worked hard to help us reach our goals. She makes me a better person!
    6. Live within your means. No explanation required.

    I love your story, William. You should be very proud of your accomplishments!!

  148. In addition to telling my own personal story, I want to offer some thoughts on a couple topics that were discussed pretty extensively in this thread.

    GPAs – I’ve hired (and, sadly, had to let go) quite a few people in my career. In my experience, a person’s GPA never said much about whether that person would be successful in a certain job. Other factors, among them learning agility and the ability to build collaborative relationships to name just a couple, were always much more important to determining success. All other things being equal, a high GPA might be indicative of work ethic or other desirable traits, but a person’s GPA is not a factor I’ve ever given much weight to when making hiring decisions.

    Rent vs. Buy – For most people, buying a home is a good decision. Of course, this presupposes that the person can afford the down payment and the loan repayments, just as affordability can turn any otherwise sound investment choice into a bad decision. However, it’s not always a slam dunk that buying a home is a better financial decision than renting one. For some people, it does indeed make sense to maintain liquidity and avoid the relatively long term commitment that home ownership usually requires. These are usually people who can afford NOT to own a home, despite the fact that millionaires often do own their homes. Regardless of your financial situation, understanding your time horizon and possible alternative uses for the equity are important things to consider when you are making a decision on whether to rent or buy a home.

    1. Awesome story William! Much respect to you and your accomplishments… Your comments were well stated as well.

      Financial Samurai loosely defined his first criteria that the above average person went to college and believes that grades and a good work ethic do matter….

      I think he’s just building a frame of reference for this theoretical net worth chart… the degree to which you agree or disagree with a specific criteria probably doesn’t matter too much, but it does make for interesting sharing of views and opinions.

      I think most people, including Samurai, will agree that grades are a tool for comparing people at a specific point in time in their life… Obviously the further one gets from the age at which they graduate from college, the less grades will mean anything to someone comparing them to other candidates for a job… All things being equal, someone with real life experience in a particular line of work will normally be easier and cheaper to seamlessly and quickly integrate into a business.

      Grades typically only matter when someone first graduates from school and they are applying for certain jobs cold with little to no relevant work experience. A lot of major firms have minimum GPA requirements in order to consider a candidate… That doesn’t mean the low GPA people could not do the job as well as, or better than the high GPA people, but it does mean they won’t even be considered for those jobs. Thus having a low GPA automatically reduces the number of opportunities available to them.

      The GPA demonstrates (to some extent) that the student was able to figure out what would make their professors happy enough to give them an A. Or at least that they were strategic enough to seek out the easy A classes. Absent a lot of other relevant information and or experience, this has some meaning… This same person should hopefully be able to figure out how to make their employer happy enough to rate their work an A.

      Of course it’s not the only indicator, but it a useful indicator at a specific point in time. A few years later most people will consider it irrelevant and lean on experience…. Ok, yes you got good grades in school, but what did you do with that after? It’s difficult to really know how any person will perform at a job until you see them in action.

      A few minutes or hours at a job interview is not enough to really know how it will work out with a candidate so employers make judgements using their own experience, and for a young, inexperienced person, grades may be one of the few things you can use to differentiate.

      Parents who value education will normally encourage their children to get good grades, and help them along the way however possible. This is because they believe grades matter for something.

  149. I sometimes read articles on websites like this one because, in my heart, I’m basically scared to death that I’m not really doing as well as I should be doing.

    I grew up in a small town in the south. My parents had five kids and we were, at best, middle class. My Mom was a waitress and later a restaurant manager. My Dad drank heavily, and when he was sober he worked as a used car salesman. Once my parents divorced, my Mom was the family’s only source of income. She worked her butt off. My Dad never helped us out after he basically deserted our family.

    I got good grades and was hell-bent on going to college, but money was very tight at home. I had to pay my own way, working part time and summers. Eventually it was just too much and I left college to work full time.

    My first big break came in my early 20’s when I got a corporate job in a major city. I didn’t know a single soul there, or even how much money I should ask as a salary to live a decent life in such an expensive city. Despite never finishing college, I got the job and along the way was able to work my way up a notch or two.

    My next big break came when my company offered me a job overseas. It was supposed to be a one year assignment, but it ended up being a few years. Once again, I worked my way up a notch or two on the corporate ladder.

    Once I had a good income, I was able to start saving and could invest a little money. I had a few close relationships, but didn’t get married until years later. I always counted only on myself, remembered how it was when I was kid and our family had no safety net at all, and was always worried that I would end up back there.

    After years of working and changing jobs a few times for better opportunities, I recently entered my 50’s. I’m happily married. We don’t have kids and never wanted a family, just each other and our dogs. My spouse had no money when we met, is not employed, but certainly does work hard at taking care our home. Over the past few years, I’ve finally started to feel financially secure. Our net worth is about $6 million and I’m still working hard in my corporate job. I know many reading this will think the journey I’m describing is impossible, or perhaps you will wonder, how did it happen?

    Many reasons: 1.) good luck; 2.) work, work, work; 3.) growing up in a family without any money, so that I’ve always been worried about financial security; 4.) working overseas for several years, which allowed me to save and invest early on; 5.) jobs that provided an income beyond what I needed to live on, although I will admit that I’ve actually lived very well by most standards; 5.) eventually getting into a long term relationship that provided domestic stability.

    Although I’m fairly secure at this point, I still worry a bit. As you make more money and accumulate some wealth, you have to be careful that you remember the value of a dollar. It’s easy to spend more than you should, just because you can. Starting to believe you’re “rich” just because you have a few million dollars stashed away is a really big mistake. Failing to enjoy your money while you’re healthy is also a big mistake, because you can’t enjoy it once you’re gone.

    Thanks to the moderator for giving me a place to share my story, and I wish everyone here well in their own personal journeys.

  150. I looked thru the charts on your article. I have worked for 32 years, so I checked out the 33 year line on each chart. I was absolutely consistent in max contributions to 401k throughout the years, and was lucky to have good matching employer amounts…still I made a lot of mistakes. Guess what? I ended up almost exactly where your chart indicates for my years of work. I always thought the consistency was on my side….sort of like the Tortoise and the Hare

    Thanks!

    1. Awesome for providing an extra datapoint of support for my analysis after 32 years of contribution!

      The feedback is basically a lot more naysayers from the younger demographic and a lot more support from the older demographic.

      I hope for those younger people who believe saving such amounts is impossible, to simply know that if you stick to consistent contributions in a balanced investment portfolio, the chances are high that you too, will get there. Compounding growth and disciplone goes a LONG way! You just have to believe and get started!

      Sam

  151. I was curious if you factored in things such as regionality of cost of living into this calculation, since this would effect not only your annual earnings, directly lowering your net worth potential, but also the cost of a home, which would indirectly lower your net worth potential. For instance, in my area, I could purchase a 3100 sq. ft. 5 bedroom house on a 1/2 acre lot that is less than 5 years old for $330k (list price) which is right around the average of what you’re are saying a 27 year old would be buying, this seems a little excessive to me for a first home purchase.

  152. Above Average Black

    Overall, I’ve been tracking pretty well in regards to the chart listed. I like to keep my retirement, post tax and home equity fairly even. Therefore, my retirement is lower that the chart listed. My post tax is higher than the chart listed. My home equity is higher than the chart listed.

  153. i have been reading this site since I started working about 4.5 years ago. It absolutely motivates me (bc I want to be the best). I’m 28 now but I graduated dual bachelor civil engineering and physics after a whopping 6 years. So one can imagine I definitely started off behind the 24 yr old/25 curve. However I did get scholarships and was in state (state school) so I had zero debt upon graduation. I have always saved everything I could from the start because I knew I wanted to be rich/wealthy or at the very least not have to slowly die in corporate America. I started out with a 60k position living at my uncles place in NYC paying around $500 in rent. Saving around $2k/mnth buying equities with all of it. Then I made some bad decisions promptly lost $13k was heart broken bought a bmw which ultimately cost me another $13k after selling (and I’m being generous). I was probably worth about $70k after leaving ny 1.5 yrs there- to tx the cheapest and hey no taxes. I switched back to save mode and sold my 650i for a civic and since I paid cash for the bmw I got $10k back. From there I’ve probably averaged around 5-10k to 401k +5% match from comp. I do not like putting money in 401k bc I feel my options suck plus i would suffer 10% loss if I ever wanted to pull it out. Long story short I have bought several stocks and made money on most but on specific stock apple has blown me past the 30 average. I hope to buy some rental properties next year if this year goes as good as I hope (I say hope because in this world Anything is possible).

    Also in tx I got room mates paid $600/inclusive for rent and moved 4 miles from work. My expenses total around $1.7k/mnth and I can eat out occasionally and every once and a while so a nice trip.

    In regards to home ownership it’s not necessary sure. I could also be an nba player and be a millionaire having never invested went to college or opened a finance book. I do know a friend of mine moved to tx while I was here sold after a year and reported a $50k gain. Needless to say, crap that coulda been me!

    My numbers which fluctuate day to day
    Equities $203k
    401k/+cash option benefit plan $73&
    Civic $13.2k according to kbb

    PS I am plotting on million nw by 32.

  154. Just got through reading the article and all of the comments. Some great information in here; inspiring stuff as well. I just turned 23, and have been working full time in my career for 7 months. I was fortunate enough to graduate with zero debt, and I live at home with my parents. My salary is $59k and since I started working I’ve been able to put away $18,000 in savings plus a few more thousand in my maxed out 401k that my company matches 6%. My goal is to have $50,000 in my savings account by my 25th birthday, but after reading some of the comments on here it seems like I will still be behind many of you!

  155. Sam – love the site and all of the content. Couple issues I’ve been having with Personal Capital (I recently signed up):
    1. My wife also has accounts with same mutual fund firm (Vanguard) and we can’t seem to figure out how to link two accounts from the same provider (?)
    2. We have an investment in a private real estate fund which has done quite well, but there doesn’t seem to be a way to track this (?)
    3. I work for a small advisory firm that was recently bought by a larger bank – since I now have a 401k and other accounts with the big bank (not my preference but nothing I can do about it), any ideas on how to link this?

    Thanks so much!
    Drew

  156. I fit most of the mold you laid out except I took out student loans for an expensive education. Despite having a negative net worth at around 30, looks like I’m still on track to catch up to your “average” before age 40.

    I like a stock allocation around 70%-90% so I don’t really consider myself a conservative investor. Nonetheless, I can’t help but relegate myself to an optimistic annualized return of 4%. (actually I use a range: 0% pessimistic and 4% optimistic) I’m skeptical that returns will mirror those of the past, so I don’t want to set myself up for disappointment 10 to 15 years down the road.

    1. A 0%-4% long-term expected stock return is a good idea. Better to be conservative and end up with more than expected, than end up with less than expected. Folks like Dave Ramsey calling for a 11-12% annual return in stocks when the 10-year yield is under 2% are way too aggressive imo.

  157. The housing boom in the early 2000s along with the decline from the 2006 peak has created a distorted view on the value of homes as an investment. We can talk about all the bad players (lenders, politicians, greedy investors, etc…) that contributed to this period in history, but personal responsibility would more accurately hit the mark. I live in a resort area that turned PLUTONIUM HOT during this period. In fact, so hot that it defied logic in terms of normal housing appreciation. It made me so nervous that I sold everything I had in 2006 and parked the money in a safe account until the market stabilized. The housing prices were as unrealistically low in 2011 as they were high in 2006. So, knowing that “a rising tide lifts all boats,” I started buying foreclosures in 2011. The opportunities to make favorable investments in real estate, including the real estate that happens to be your home, depends on whether you are willing to make the “right decisions” relative to the marketplace. Eric, I had a negative net worth at age 27, so you are in a far better place financially than I was at your age. Real estate investing, as in most investing, is a dynamic endeavor with a multitude of variables, which makes it difficult to talk about buying a home as an investment in such a static way. I read blogs like this for that very reason. These types of blogs offer me knowledge that is just not attainable in my local market. I appreciate your comments, Eric. Thanks…

  158. I’m going to have to go ahead and challenge some of your number crunching here, man, because you’re not telling an accurate story.

    It is, in fact, true that most millionaires are property owners. So far so good. What you’re article here seems to imply is that if everyone buys a house they are on track for the same outcome. This is simply not true. At all. The math doesn’t work that way UNLESS certain things are assumed.

    A younger person, we’ll say someone who’s 30, who mortgages a house with minimal money down (assume a maximum of 5% down) with a 30 year mortgage at current rates (around 4.5%) and stays in the house will NEVER make money on the property. It simply isn’t possible UNLESS they pay it off far sooner than 30 years. The interest paid to the bank on a mortgage DWARFS whatever sale price they eventually sell the house for. If they sell sooner than 15 years, they don’t have anywhere close to enough equity to make it worth it. So, in essence, realtors and financial planners sell the ILLUSION of weath from owning a home, but never point out that in order to increase your wealth, you have to make more money than you pay over time…which is ABSOLUTELY NOT the case when you finance a house without at least the same amount in assets. Mortgaging a $300,000 house when you have a net worth of maybe $95,000 clearly isn’t going to make you more wealthy. So there’s that.

    Most millionaires BUY their property with cash, OR they have the assets to liquidate the debt when needed. Most 30-somethings don’t have those resources, and thus, are only pushing themselves further into poverty…albeit, their monthly PAYMENTS may be lower than renting.

    The bottom line here, is that you CAN build wealth by renting, actually. Because there isn’t a one-size-fits-all formula to wealth growth. If there was, everyone would do it. There IS, however, a one-size-fits-all formula to wealth redistribution (i.e., you are transferring your future wealth to people who are already rolling in money), and it’s called mortgaging a house. People need to do their own legwork and calculate what they can and can’t afford and make rational decisions based on facts, not what a financial planner or realtor says they need to do. Their incentive is to sell things to you to make money, not help you become financially independent. This isn’t to say there aren’t honest folks in the industry, but most don’t care if you end up better off than when you started out. That’s just how it is.

    So, to anyone who may happen to come across this article, and subsequently see these comments, keep that in mind. You DO NOT need to finance a house to get rich. The claim that you do is patently untrue UNLESS you have the money to buy a house outright or, at the very least, mortgage less than half of the purchase price. This is extremely important to understand. A HOUSE is a place to live, nothing more. It is NOT an investment vehicle.

    1. Eric, nobody says you can’t build wealth renting all one’a life. Of course you can.

      I’m saying that you have to live somewhere, the return on rent is always -100% every month, and the government provides mortgage interest tax breaks, while property has inflated over time. I think it’s prudent to buy at least your primary residence and be neutral real estate.

      Please share your net worth, age, education, work field etc so we get an idea of where you are coming from.

      Thanks

      1. My net worth is in the 6-figures. I’m 36. I have an AAS in audio engineering and studied finance at a university before just leaving. I built my net worth from a starting point of -$27,000 about 12 years ago.

        And I didn’t say you said you can’t make money renting…if I did, there was either a typo or something. But I think you were being misleading by pointing out millionaires own their homes. Of course they do, millionaires only borrow money they can afford to pay back (unless, as we learned in the years leading up to 2008, they’re playing with other people’s money…then they’re fine with leverage). Return on rent isn’t 100%, by the way. It’s 0%…in purely financial terms. I’m simply paying for a roof over my head. The return may be 100% in abstract terms, but not monetary terms.

        The math, however, ONLY works one way. You can’t make money if you don’t have money. Borrowing more money than you have to purchase something you can’t afford NECESSARILY MEANS that you will NEVER make a return on it. This is a trap so many millions of people fall into–either by willful ignorance (wishful thinking), or stupidity. You CAN make money if you have money, however. The only thing that will grow your wealth is understanding what you’re doing, how the numbers break down, having discipline, and not being stupid. That’s it. The paths to get there are many and vary greatly depending on individual financial resources, but the MATH is ALWAYS the same. That is my point.

          1. Because Eric’s right. There’s no return on a house either, and it’s usually a bad bet. Let’s say I live in a $700/month rental property for 30 years. After 30 years, I’ve paid $252,000 to live there. Someone else buys a $250,000 house and lives there for 30 years. By the end, he’ll have paid $430,000, not counting property taxes, maintenance, etc. After 30 years, he has a house. I have about $200,000 that I didn’t spend on interest, maintenance, property taxes, etc., and I can easily move to somewhere I want to live if I don’t like where I am. He’s stuck where he is.

            Seems like you should be taking tips from Eric.

            1. Eric’s argument, aside from not making sense, absolutely ignores time value of money. Your argument ignores inflation. The homebuyer has fixed mortgage payments for 30 years while his asset appreciates; the renter has to deal with rising rents and has no asset. Assuming 3% annual inflation, the renter is now paying $400,000 (in face-value dollars) over 30 years, at the end of which he has nothing to show for it. The homebuyer, who’s spent $430,000 (your number – yes I know you left some stuff out but the point is the same), now owns an asset worth $589,000, which he can sell if he desires (he’s not stuck with it if he wants out).

              Nobody claims that homeownership guarantees wealth, but Eric’s implication that homeownership is a path to financial ruin is just odd.

            2. I think you’re missing one variable. The appreciation of the house.

              When I cleared my first million in net worth at age 27, a decent portion of it was due to appreciation of my San Francisco property. That property is now generating $3,800 a month in rent and has a mortgage of $1,300, only $200 of which is interest. The property appreciated from $580,000 to $1,050,000. My cash on cash return went from $120,000 to $930,000 now. That’s pretty good imo, and that’s just one of my four properties.

              I think it’s good you are investing the difference with what you are saving buying property. The reality is, most people don’t save and invest that difference. Most people spend.

              What is your age and net worth currently? I like hearing people’s perspectives and taking people’s advice. So I’m all ears.

              Check out: The First Million Might Be The Easiest

              Thx

            3. I have to agree with Jonathan & Samurai, as most readers probably will. Long-term prices appreciate. After a house is paid off, there is only property tax and insurance to pay, while a renter has never-ending, always escalating rent to pay. This rent is income to the owner or it pays for principal and interest on the owner mortgage, building equity for the owner… There is a reason why 97% of millionaires own their own home:

              https://www.nytimes.com/books/first/s/stanley-millionaire.html

    2. I had to read this article twice in search of the “implication” that renters can’t build wealth. I couldn’t find it? There must be something in Eric’s personal story that led him to this conclusion. I’m 55-years-old and currently own multiple rental and commercial properties. My personal homes have played an integral role in helping me acquire additional investment property. The average tenure of a home seller is relatively short, with owners selling their homes after owning them for only six years; it was even shorter prior to ’03. We moved many times over the past 20 years and never made less than 30K on a home; in fact, one home doubled in value during the housing boom. This strategy coupled with the traditional advantages of owning a home (e.g., mortgage interest tax breaks, etc…) helped us reach our financial goals much faster than anticipated. It is certainly possible to build wealth as a renter, but you can’t beat the financial advantages that home ownership provides.

      1. The implication is manifest in the assumptions at the beginning of the article for what is considered “average”. The “average” person saves next to nothing and isn’t working what, for the purposes of this context, could be considered a “career”. Most people in their prime years are working to pay off student debt and many of them have multiple jobs and still can’t afford to live.

        I’ve worked for HUD before, doing audits and policing mortgage companies. I’ve seen the assets and W-2s of many borrowers, and I know all the trickery lenders use to make things seem a certain way when they aren’t. Most people can’t afford houses. Affording the payments is not the same as affording the house. Furthermore, spending 6 years in a house when you take out a 30 year mortgage does not help you grow wealth faster. That’s crazy talk. What math works that way, UNLESS, as I’ve previously stated, the buyer HAS THE ASSETS to absorb the debt. Which represents MAYBE 1% of all buyers. You said yourself that you own multiple rental properties. Who can afford that but people with money? That is the point.

        A house is not an investment, at least not for 99% of all the people that buy them. They have been intentionally misled into believing that it is because they don’t know any better. A house is a place to live. Can you make money on it? Sure. But very specific criteria need to be met before you turn a NET profit. Selling the house for more than you bought it for doesn’t mean you made money. The only people who make money are the ones who understand how finance works…which is very few. I try to advise as many people as I can to NOT buy houses UNLESS they can afford it. Meaning that you never borrow more money than you can pay off. Taking on debt is a wonderfully affordable way to grow wealth IF you can liquidate it immediately should you need to. Borrowing $500,000 when you only have $95,000 in assets NECESSARILY MEANS that it is IMPOSSIBLE to make money.

        That is what I have been talking about. I never said that owning a house can’t be a good idea. It’s a good idea if you can AFFORD TO OWN IT. Period. Most people can’t…which is why no one has any money.

        1. The above average person buys things they can afford, which includes a house.

          The people you are talking about are not above average people. They are the people who got in way over their heads during the 2008-2010 financial crisis and hurt others who were responsible and kept paying their mortgage.

          Again, there’s nothing wrong with being a renter. In fact, landlords needs renters. There is a symbiotic relationship. And there is a reason why the average net worth of a landlord is much greater than the average net worth of a renter. Again, it’s up to each individual to accumulate assets or not.

        2. Hi Eric,

          I agree with Financial Samurai on the home ownership point.

          I’m 45, self-employed, net worth ~$3M. I own my own home + two investment properties, looking to buy a third. I had minimal financial help from my parents, who were lower middle class financially and I graduated with about $20k in student loans (BS in Acctg from public university)

          I put down 20% on the first investment property, 10 years ago, at age 35…$70k on a $350k house. Interest @ 6.375%, ~$2k/month including property tax and insurance. I got $2k/month in rent, so was at roughly break-even on a monthly cash-flow basis. The annual mortgage interest tax credit put me in positive cash flow. Today the property has a market value of $600k, and rents for $3000/month. It has definitely been a worthwhile investment. I refinanced to under 4%, and pay down the mortgage more rapidly. It contributes $400k of my net worth. and is now a cash cow.

          Let’s take a scenario: Put down 5% ($20k) on a $400k owner-occupied property.
          With a 30 year fixed mortgage @ 4.5% on $380k your payment is $1925/month. For ease of calculation, assume property tax of $4,200 (~1%) and insurance of $1.2k, which are reasonable. This means your monthly payment is $2,375.

          After 6 years (average home ownership), you will have paid approximately $100k in interest while paying down $40k in principal.

          Roughly $555/month of your monthly payment goes towards your own net worth, as your mortgage balance will now be $340k instead of $380k.

          Roughly 30% of your interest expense (more or less depending on your tax bracket) $30k ($400/month) comes back in the form of annual tax credits.

          So the average person buying a $400k property with 5% down ends up with an effective carrying cost around the same as a renter paying $1400/month (+ utilities.)

          The differences are: 1) the renter has no upside, while the owner does. 2) The owner has a higher monthly payment and assumes the risk of a market decline.

          If they can’t afford the monthly payments, the owner should not buy the property, and the above average person would not get into a mortgage commitment they don’t understand.

          Financial Samurai, I have mixed feelings about the GPA argument. I had a 2.7GPA and I do feel it was because of my work ethic wasn’t great in college. However, I consider myself above average intelligence, and am a think-outside-the-box kind of person. Although I wasn’t highly paid at my first jobs, I put myself in positions to learn the business I was working for. When the time came, I took a leap, set out on my own, and thankfully I made it work. I feel I added a lot of value to the companies that took a chance on me, and I wasn’t all that well compensated for it, but in the end everything happened for a reason.

          I currently don’t hire anyone other than for positions where education isn’t important. I think if I were in a corporate structure and in a position to do so, I would still prefer to hire a high GPA person. However, I would definitely reserve judgement and give consideration to someone with a lower GPA, since there’s a lot of facets to what makes someone a good worker, and I can relate since I myself was a low GPA person… Also, since a low GPA person may often have less options, you can potentially compensate them less at the outset, and therefore get more value from them for your money… I know that in the Accounting field, the big firms have minimum GPA requirements before they will call someone in for an interview.

          I guess at the end of the day, since it is an article of the ‘above-average-person’ I was not ‘above-average’ at the time of college graduation as strictly reflected/defined by my sub-par GPA. However, I now fall above your net worth requirements, at an older age…

          However, there are multiple possible definitions of an ‘above-average-person’ and not all of them relate to net worth. There are people who take a completely different track in life, choosing to forego a pursuit of material things in order to pursue other things such as altruism. Of course anyone can make their own decisions and judgements about this, and yours is certainly an interesting and useful article/analysis and basis of comparison if you want to see how you might compare with the Joneses.

          Thanks!

          1. Thanks for sharing your thoughts Mark! On the 2.7 GPA front, you hit the nail on the head when you said it was about work ethic, or lack thereof. GPA is more work ethic than intelligence. My motto is to never fail due to a lack of effort, and if I’m hiring for a position for someone within 3- 5 years out of school, I definitely must consider GPA and what s/he has done after professionally.

            Sometimes, people do so bad in school that they try hard after school to make up for their bad GPA. I like those people. They are hungry and have a “I messed up, but now I’m going to do my best” attitude which I love.

        3. Eric, I think the partial point you are trying to make is that far too many people were duped into “buying” houses that they could not afford (i.e they broke the old rules about how to gauge what price level you can afford based on income).

          However, overall your logic is shortsighted. The idea isn’t to make money on short-term outlay of money when you purchase a house. As others have mentioned, you get the tax breaks and the hope is that the property increases in value. But, even if it does not, you are building equity in the property – equity which you can then take on to the next property and so on. Even if you stay in the house till it is paid off, you are ahead despite the fact that you potentially paid more than it was worth… why? Simply because based on the averages you will far outlive that loan and will own your residence until you decide to downsize in your old age or pass on. So, bottom line is that you can think of buying a house as a savings plan. Taking $X/month and investing in the house vs the same $X/month and spending it on rent is a no-brainer. At the end of 30 years you have a rent-free place to live vs paying rent to someone else for the rest of your life (and helping them build wealth).

          I speak from experience – I’m 49 and semi-retired because I bought a house when I was about 30 – paid it off in about 16 years (30 year loan with accelerated payments) and now I’m able to save almost all of my income and prepare for full retirement without the burden of worrying about how I’m going to pay for housing for the rest of my life.

  159. Discussing your GPA relative to net worth is about as interesting as “Inflategate,” root canal surgery or the U.S. Tax Code. “Formal education will make you a living; self-education will make you a fortune.” I left college with a degree, $70.00, one ugly suit and $1,000 in school loan debt. I currently have several paid-off commercial and multifamily properties. My college education provided a good foundation for success, but the “School of Hard Knocks” taught me more than I could ever learn in a classroom. This blog has placed more focus on GPA than it actually deserves. I’m more interesting in “how you got there” than “how you started.”

  160. I think grades matter in getting the next degree, but in relation to making money probably not for most people.
    It does matter to the individual however, in their understanding / mastery of the subject.

  161. Perhaps I’m missing something, but isn’t this ignoring the debt on the home? Sure you can count equity in the house as an asset, but only if you count the remaining loan amount as a debt, right?

    1. Hi Ken,

      It sounds like you may confuse market value with home equity…
      By definition, home equity takes into consideration the remaining loan amount.
      ie: house market value = $300k, mortgage balance = $200k, equity = $100k.

      Cheers,

  162. Patrick Veling

    Of course grades matter. But so does the choice of one’s educational focus and degree.

    Getting high grades in technology or business school endeavors is different in today’s economic environment than getting high grades in social work. Some areas of enterprise are simply more financially rewarding than some others. It’s pretty clear that somebody can get mediocre grades in a high demand or high income specialty and do MUCH better than one who gets the highest grades in a career choice with little job growth prospects or demand.

    In my opinion, college-bound students are not counseled correctly regarding their choice of academic direction as it relates to their near and long-term job and income prospects.

    1. Absolutely Patrick!

      It should be a requirement for all high school counselors/college admissions specialists that they discuss cost vs benefit.

      The rule may be flexible, but one years first salary as a maximum for total school loans is a fair and reasonable threshold.

      How anyone can justify a 40K/year school for a undergrad in any BA is ridiculous unless you have a generous parent/grandparent paying your way.

  163. Education: Less than 2 year attending community college (high school GPA 2.3)
    Age: 34
    Married – 2 kids

    Current net worth: ~$700,000
    • 401k and other retirement savings: $400,000
    • House equity (conservative): $125,000
    • Cash: $75,000
    • Other: $100,000
    • No debt (cars paid)

    Outside of items 1 and 11, the criteria above generally describes my professional and personal attributes. Obviously my lack of education limits most high paying opportunities, but with proper work ethic, good business sense, and the ability to market your strengths – anything is possible.

    Looking back, I completely understand the limited professional success I’ve accomplished is an anomaly and would not recommend this formula as a blueprint for anyone looking to maximize their inherent potential. My point is that there’s something to be said for an individual who (outside of formal education) relentlessly pursues financial stability.

  164. This was a great read! We are dual retired military. Our numbers have to go in very different columns — there was no TSP (401K ) in the military until about 2001 — so, we are heavy in the taxable accounts, the Roth accounts come next, and our TSP (tax deferred) accounts are small in comparison. We both maxed them as soon as they were available, but that was late in our career. In reality, for us that is best, because with our pensions, and considering the tax benefits of a good portion of our military active duty compensation, tax deferred is not our best long term option. For us, Roth is best.

  165. Financial Samurai, I enjoyed the post. However, I think the definition of Above Average Person is a little off with the claim that he or she “has little-to-no student loan debt due to scholarships and part-time work”. Huh? Whether or not a person has student loan debt has little to do with moral fiber and a lot to do with the side of the tracks on which they were born.

    In the comment section you said that you went to top-tier schools (W&M, Cal) and, as such, you should know that most people do not get a full scholarship–or even a 50% scholarship–to elite colleges and universities, particularly graduate programs (MBA), medical schools and law schools. Top schools don’t need to entice the choice candidates with scholarships; I promise you that Harvard Law is NOT giving full rides to everyone with a GPA above 3.7 and LSAT above 170 (that would be almost the entire class). The reason top universities are not handing out scholarships to every Mensa member is because they rely on paying students to remain solvent!!

    So if the Above Average Person has little-to-no student loan debt, how are they accomplishing this feat? Part-time work? The total 2014-2015 cost of attending Harvard College without financial aid is $58,607 for tuition, room, board and fees. The most amazing part-time, college student job in the world wouldn’t pay half of that amount!

    Here’s the reality–the overwhelming majority of people who graduate with no student loans from top-tier colleges and universities were able to do so because their family financed their education. And that’s ok. My gripe is that having family money doesn’t make anyone “Above Average”–it just means that you won the baby lottery.

    Wake up Financial Samurai. All of the characteristics of the “Above Average” person require them to affirmatively do something–to delay gratification, to reach a higher level of awareness, etc. But not this student loan nonsense. You are attributing a virtue/accomplishment to people who, more likely than not, did nothing to earn it.

    My brother and I both have multiple degrees from top tier schools. We had a variety of athletic and academic scholarships throughout and worked while undergrads (I worked in grad school as well)–and we still had to fill in the gap with student loans. At top-tier schools, part-time work and scholarships usually don’t come anywhere close to covering $50k+ per year in tuition, room, board and fees. Many of our friends and former classmates are your “Above Average” people who graduated with no student loans. And virtually none of them accomplished this feat on their own.

    One final nit–my brother and I are both in our late 30’s and have average net worths firmly within your Above Average person scale. Accumulating wealth has been slow and difficult; also, the wealth building process is not linear (for most people). Its more like a hockey stick. So your average net worth scale should probably be adjusted to reflect the 80% of us who didn’t get an economic head start from our family.

    1. Affirmatively do something… does working during the summers, or a part-time job, or applying for scholarships/grants not mean affirmatively doing something to reduce tuition?

      And who said the above average person does it all on their own. Above average people get a lot of help from their parents. They are in other words, LUCKIER than average. It is the person who is born on third, who things s/he hit a triple that society hates.

      Read: A Massive Generational Wealth Transfer Is Why Everything Will Be OK

      1. Suggested additions to definition of “Above Average”:

        12) Above average people get a lot of financial assistance from their parents.

        13) Above Average are, in other words, LUCKIER than average.

  166. Hey! A coworker introduced me to your site and I am fascinated by your articles.
    I was wondering if you could give me some advice:

    I am 24 years old and a project manager making 70k

    In 2009 i graduated community college with $0 debt (state paid for tuition thanks to 4.0, even profited over $2,000 in cash scholarships for maintaining it while in college). And since I had no money for college, my parents convinced me to take a Service Desk Tech (IT help desk) job for around 30k after community college while I enrolled at a public school with an online Comp Sci bachelors program (part time has cost me roughly 7-8k per year). After 1.5 years I was promoted to a QA Tester making around $35k, then to business analyst after 6 months (no raise because i was still “entry level” with no bachelors), and finally to lead business analyst 7 months later (to a salary of 41k).

    A year later, I was fed up with being underpaid for my work (41k is piddly for a business analyst even without a degree, nevermind one who is a supervisor), so I went and got my CAPM certification (slowing my degree by a few months), and asked for a raise. Company said they couldn’t afford it, so I jumped ship when I found a company offering me 70k, 50% 401k match, and tuition reimbursement.

    So now it’s 2015, I’m 4 months from graduating college, I’m making 70k as a project manager (been working here for 2 months), putting 10% of my income into my 401k (currently valued at 10k, & 50% is matched by my employer, i’m at their max for matching), living at home with my parents, I have 3k in CD’s, $26k in savings, and have no debt whatsoever (paying $8k per year for school in cash, so no student loans). I will be continuing to graduate school for my masters in the fall, so I am still expecting to have bills for school for the next 2-3 years (although potentially reimbursed by my job). With my new salary I am dumping $2k of my after tax pay into my savings every month (some of which gets dipped into when tuition time comes).

    I see you recommend putting into the max for 401k’s. I’ve never heard of this before and am fascinated, however, being 24 I really want to save for a house. My mom says I shouldn’t worry about upping my 401k at all right now since I don’t have a big nest egg (for a house) and I can’t take money out of my 401k till retirement and I’d need the money now. I was wondering if you had advice regarding whether one could be in my financial situation and still pay for school, save for a house (I’d like to be able to leave my parents house in 5 years), and still be able to up my 401k contribution percentage?

    Thanks!

    1. Hi Cheryl,

      Welcome to my site! First of all, nice job implementing a savings structure and getting some more education for your future.

      Contributing to a 401k or saving for a house is certainly a dilemma many people face. The question becomes: How much is the downpayment for the house you want to buy?

      With a $70,000 salary and living at home, you should easily be able to max out $18,000 a year for 2015. Still leaves you with a gross salary of $52,000 to live/save.”Housing fever” desire is strong w/ many people, but if you are still in school and just starting this job, you need to think long and hard about whether you really plan to stay put for AT LEAST five years before buying a house. What if another opportunity arises? Housing has moved up a lot since 2009. Is there a rush?

      Check out:

      Contribute To 401k or Invest After Tax?

      1. No real eminent rush, just simply that i’m 24 and want to move out without throwing away my money into rent (my parents only charge me 400 a month to live home and “mooch” when apartments in the area are around 800 not including utilities and the food i’d have to pay for).

        Also my boyfriend and I have been together about 4 years. He just graduated college and is in HUGE student debt from RPI (I’m fairly certain it’s around 80-100k though he won’t give me the specific #), but we definitely want to start thinking about a future together soon-ish (hopefully within the next 5-7 years), so I know with his debt I’m going to need to save for the future “us” mostly on my own (and again, I don’t want to throw away rent money on a temporary place when I could save it towards a permanent place).

        Considering where I’m located (between 2 major cities within an hourish radius, plus a lottttt of IT companies in the area), I know I have no need to move where I live much if any to grow my project management career (Google, Bloomberg and others are within an hourish radius, plus my current company is pretty great and I wanna stick around as long as it works out). So i know picking a permanent residence won’t hurt my opportunities.

        And in answer to your question: Good houses in this area go for 250-300k so I’m assuming I’d need 50-75k for a down payment??

        1. You are not “throwing away money” by renting. You have to do the math. It’s all laid out nicely in this article. Sometimes renting is better, sometimes buying is better.

  167. Well, I don’t “fit” into the averages….I’m a single female, aged 60, no kids, no hubby. I graduated from the U.of Wisconsin 1977 majoring in Bacteriology, worked as a chemist for five years, and have had my own business(es) for 33 years. In 1980, I signed up for seminars on retirement planning , at the Fortune 500 where I worked, but at that time, Human Resources informed me that I was “too young” to attend so I was not allowed to go.

    I bought my first condo here in California in 1989 and still own it and yes, it’s paid off. In 1993-94 I attended a year of graduate school on a full fellowship and dropped out of the PhD program as I saw a future in academic biological research as the path to legalized welfare. (competing for grants when only 12 percent were getting approved.)

    I started another business, doing well when I could/can work through migraines which last three days and are debilitating. These come when I eat certain foods or inhale certain fumes. My renewal commissions were forfeited/stolen for my first two businesses. I learned a lot the hard way.

    So today I have a business that I have ready buyers for my future discounted flow of commissions. I sold some future commissions a couple years ago to buy marketing material. My business is only worth about $163000, but it is growing fast now that I can manage my migraines. In addition, I will be completing my MBA in three months at my current age of sixty. I will also have completed the HTML5 Content Developer Certificate at the junior college while I have sat here launching what is now my third business. Today I signed three contracts for products that I have sold before, but these new contracts all give me my own URLS to use and I now have the computer skills I need to benefit from these.

    Here is me: 1) my dog, Winston, aged 6 is paid off and I have breeding rights; I bought him for $600. Ok….I don’t plan to breed him…he’s strictly my buddy, and from my standpoint he’s worth over a million! 2) My condo is worth $160,000 and as mentioned above is paid for. 3) a vacation home at the base of Sequoia Park on the river is worth around $400000 and paid off. A friend occupies the large bedroom and pays me $750 a month. 4) I have two other condos out of state that I net around $500 a month total from. They are worth about $100,000 together. 5) Liquid cash and collectibles are worth $46,000. 6. Steady renewal income is about $1800 a month. Renewals are increasing at a rate of about $400 a month. If I did nothing to maintain the renewal income they would be expected to last about 7 years. I guess all this adds up to around $823,000 so according to the standards set down above I have failed royally.

    On the other hand, I walk 2 miles a day, take no meds, do yoga, and feel I have a bright future as my MBA and computer marketing skills are helping me a great deal and I have a feeling I will be starting a marketing branch as part of my business. Although I appear to be a failure I can enjoy my weekends in Three Rivers by Sequoia National Park, and because of my steady renewals I feel I am not stressed out and at risk for a heart attack.

  168. Sam,

    One thing that doesn’t add up to me is the use of the 2015 tax deferred limits for all ages. For example, a person who is 45 years old in 2015 could not have legally contributed $18,000 back when they started investing as a 21 year old in 1991. Back then, the limit was only $8,475. So if you assume that a person has contributed the maximum amount for their entire career, then you have to factor in that 401k limits have increased over time. Otherwise, the numbers are skewed upwards the older a person is.

    1. Excellent point. The chart is more forward looking than backward looking. BUT, I also think the chart can pertain well to anybody given I don’t include any company match or much growth on the low end and high end.

      1. 5% growth on investments isn’t really conservative, if we’re talking about growth AFTER an assumed long term inflation rate of 3%. I typically assume a long term pre-inflation growth rate of ~8%, so if I want to think in present dollars, then I assume a real long term growth rate of 8-3 = 5%.

        Since you also assume in your chart that the tax deferred limits will never increase from their current 2015 levels, then I view your chart as being presented in present dollars when doing forward projections (since the limits are indexed to inflation, they tend to stay relatively constant in terms of real purchasing power).

        Huh…now that I think about it a little more, maybe you can use the chart to do proper backwards analyses. You just have to mentally consider that while the past years’ contribution amounts were actually lower in past dollars, they were worth more in present dollars – which is accounted for by using the after inflation 5% growth rate.

        Might need to dig out my old Finance for Engineers book to confirm if I’m thinking about NPV correctly…

  169. Pingback: The Rise Of The Chief Content Officer: The Next Hot Job Of The Decade | Financial Samurai

  170. I’m 22 with a net worth of 60k (45k in savings, 15k in retirement.)
    Would have been 80k but when I got my licence I purchased a 20k car.

    I haven’t been financially dependent on anyone since I was 17.
    I didn’t go to college, in fact, I left school when I was 14 – no regrets.

    Despite not finishing high school the first job I landed paid 46k PA.
    I suppose I’m lucky the minimum wage In my country is $16 an hour but most employers pay a minimum of $18.52 an hour.

  171. This seems like a load of nonsense. The “above average” net worth is seemingly based on the comments of a group of rich people who gather to talk about all the money they have. Talk about selection bias!

    I’m probably about average for my age based on the “above average” net worth chart, but there are so many people who I would also consider to be doing well for themselves that are no where near these figures. Anyone going to grad school, which is a common thing these days, will be way behind these numbers for the first decade or two of their lives.

    1. I went to grad school, got a master and doctorate degree in engineering, and started working at a much older age than most people. It took me 13 years to catch up with the average NW above average. I have 3 kids and the oldest one is starting college in 2 years. Some of my savings will go towards paying college bills, so keeping up with the above average person will be a challenge.

  172. I’m a small business owner and you have a problem with saving as much money as you predict. I own a construction company and get about 20 to 50,000 a year under the table. I put a lot of money into toys and my wife and I go out quite often. Any suggestions as to where to invest liquid cash that I don’t want Uncle Sam to find out about? My wife works and we claim last year right around 100 K in combined in gross income. I plan on building a house in using the liquid cash to pay subs to do so. My goal is to be 35 with a $300,000 plus home paid for but I have no money invested and 401(k)/retirement. My wife is a teacher and obviously will have a pension in my business typically has 30 to 60,000 in it. Just wondering if anyone can help with how to spend liquid cash because obviously the tax-free benefits of it or how I can get ahead.

  173. Question about including equity in a home: some “experts” say that including equity in your home is meaningless to net worth because if you were to realize that equity (sell your home) you would need the same money to either buy a new home or pay for rent. Can you better explain why you include home equity in the equation?
    PS, I’m not disputing the importance of owning – that is 100% clear.
    Thanks

    1. To illustrate:

      Imagine three houses on a street, each worth $300k.

      House A has 33% equity with $200k mortgage balance

      House B has 50% equity with $150k mortgage balance

      House C has 100% equity with no mortgage

      Otherwise, the finances are the same for the house’s owners.

      The only way to fairly measure net worth is to say that the owner of house C has the most NW. It would not be accurate to omit equity and say all three households have the same NW.

  174. I have been looking for an honest net worth appraisal on line for stewards of finances for years. Great job! For the first time, I can see I do have a lot of work to do, while, understanding that I am focused on retiring early. Thank you for your effort.

  175. My advice would be to 1) eliminate non-mortgage debt and 2) pay off your mortgage. Some would say leave the mortgage debt and invest in the market, but I’m not one of those people. I think its better to be out of debt, besides, the market is at/near all time highs and we are due for another recession at some point (its been ~ 7 years since the last one) and I don’t think stock market returns are going to be spectacular for the next couple of years. Good to max out your HSA and 401K.

    Your “move in your 30s” depends on your goals – and you should think bigger than financial (ie, do you want kids/more kids? If so, is your wife going to keep working? Does she want to quit to spend more time with the kids, or cut back to part-time). These kinds of decisions made now, when kids are young and impressionable, are more important than the financial ones. Those things aside, I would 1) pay off all debt, 2) build wealth. It’s that simple. Dave Ramsey’s “Total money makeover” can spell out more details.

    Congrats on your current net worth position. At your age that is admirable.

  176. So I’m 30 and have a net worth of about $750k. However, I only have about $25k in 401ks, $250k in cash, and the rest is equity in my home (combo of appreciation and aggressive principal paydown). I owe about $260k on my house and I’m considering just paying off the mortgage and loading up on “investments” after that. I personally have the blessing of making too much to deduct hardly anything from pre-tax retirement accounts and therefore my only real contribution each year is maxing out my HSA ($5,500/yr). What’s my move in my 30’s? In a good market my household can bring in $350k+ and in a down year probably $250k+. However, if my wife quit or went part-time we’d be down $100k/yr. What should my goal be over the next 10 years?

  177. @Andy,

    Fair question re: use of 401k money. My comment was mostly about my wanting that flexibility. I am not suggesting everyone follow the same plan. I don’t know about you, but I don’t believe I would ever have enough to retire without using at least some 401k money. Perhaps if the strategy was to put everything into post-tax savings that is possible (i.e. a Roth 401k with high contribution limits?). I’ve got some in post-tax, but the lion’s share in pre-tax savings. Of course you are right in your order of what to draw on first, but it’s not as bad as you might think if you plan to retire in the 15% bracket. Were I to shift my savings today to be more post-tax, I would be paying 25% federal income tax on that money. Nobody has a crystal ball with respect to future tax rates, but after the Bush tax cuts for the lower brackets were made permanent by this administration, I have a least a little confidence that 15% is where I’ll be if I choose to retire at 55. It doesn’t sound lavish, but with a paid-for home it’s not bad. I can also choose to pick up work here and there to supplement that income. As a software engineer with fairly relevant skills I get unsolicited requests to work 3-12 month contracts pretty frequently.

  178. I’m not sure how people can afford those contributions, either. My husband and I are 35 with a household income of 64k (which I understand is about average). We are currently only able to contribute 3840 to our 401k each year, with a match of 2560 for a total of 6400. We own a median home (220k) with 95k in equity and a 15-year mortgage payment of 1326 per month. Our expenses come out to 3500 a month, we have no debt except our mortgage, and we’re very frugal- shopping at garage sales and thrift stores, eating a simple diet of lots of beans and grains with mostly only the cheapest produce under a dollar per pound and no meat. We drive cheap, paid-for cars. We don’t have cable, and my flip phone with no data costs $10 per month. We have four children ranging in age from 2 to 10. The only real extravagance we have is that three of the four kids take piano lessons for $120 per month. This chart may be realistic for single people or married people with no children, but it doesn’t seem very workable for families.

  179. Andy in Denver

    Great info.

    At age 49 I’m at about 2M ($750K retirement, $750K investment, $500K home equity). $400K of that investment is from a recent inheritance. I own a vacation property out of state and a condo that I rent out (both free and clear), and live with my domestic partner in a house he owns and pay him a modest monthly rent.

    Even with a not super high end income (just over 100K) I max my 401ks and will do catch up in 2015 (when I turn 50 – $24K max contribution). Use the qualified dividend income from investments if I need extra cash and limit my tax burden by deferring income. (Also, max the HCSA account; another way to stash cash away tax free).

    A previous post talked about removing 401k monies after age 55 from a qualified plan; that’s true, but the order to use your retirement money is always – taxable first – then tax deferred (401k) – then tax free (Roth). Unless you have no other cash you would not want to take 401k money at age 55. And if you don’t have any other cash – why are you retiring?

    Admittedly no kids to raise or send to college, so one reason why I’ve accumulated so much cash. But I keep my cars for 10-15 years, buy cars with cash, cook at home a lot, and don’t spend money on useless things. I cringe when I talk to (much less wealthy) friends about their leased cars, or how their car will be paid off in a few months and they will go out right away and buy new.

    I use Quicken pretty exclusively to track my investments.

  180. Your average calculation is way off . No way the average person puts away that much.

    where did you get these figures from.

  181. I love reading these comments.

    Some of the things I agree with:
    * GPA counts, but only for your first few years out of college, and if you plan to do any grad school. Nobody cares after you have work experience in your field. I also agree that it does reflect work ethic in college, but not necessarily intelligence and absolutely not earning potential.
    * It’s easy to look at other people’s success and feel they had it easier. I know, I’ve done it a lot.

    My stats: just turned 44. Married, two kids and net worth of ~$615k. My wife currently doees not work much at all, choosing to stay home with the kids. I am an engineer in the Midwest earning an average engineer’s income. I like the poster who said the table gives a good number if you bat 1.000. Things that have probably set me back:
    * Wife brought in $25k of college/consumer debt. NOTE: I emphatically do *NOT* consider her a liability :-)
    * Upgraded our home near the peak of the market and overpaid considerably.
    * I didn’t understand investing in my 20s at all. I once bought a mutual fund with the letters OTC in them and didn’t know what they meant. I do now!

    My financial plan includes:
    * maximizing 401k contributions and a 6% match from my employer to really grow that retirement money
    * continuing to pay on our 15 year mortgage to eliminate mortgage debt in the next 10 years.
    * follow the advice in Ben Stein’s great book, “Yes you can time the market” about SMARTER dollar cost averaging
    * Of course tracking net worth with Personal Capital by linking all my accounts
    * tracking the budget with YNAB. It’s basically the envelope budget system but with an Android app instead of envelopes.
    * Ultimately, being prepared to possibly *semi* retire at age 55. I will spill the beans on an IRS detail that I may take advantage of. In the year you turn 55, if you leave your job for whatever reason, you can begin to withdraw from that employer’s 401k *WITHOUT PENALTY*. If you plan ahead, you can roll previous 401k money into the current employer’s plan and have essentially ALL of your retirement money available to you at age 55.

  182. dustin faeder

    So I understand that this is “for the above average person,” but I think there is a seriously flawed assumption going on here: that your above-average person begins work at 22. I would certainly consider my wife and I “above average,” in that we have 20 years of higher education between us, at well-reputed institutions such as Vanderbilt, Tufts, and the University of Michigan. Together we have undergraduate degrees in German Studies, Economics, Philosophy, Psychology, and Sociology. We also have masters in Sociology and Philosophy, a PhD in Sociology, and a JD. But this means we didn’t really start working until age 30, have had to manage our student loans, and didn’t become solvent until 31. Now that we are out of school and working, however, we are rapidly accumulating wealth. For many professions, there is an educational delay that is later recompensed by a higher pay rate, but that is not reflected in your model.

    1. Dustin, looks like you guys are definitely above average in terms of education, but we’re primarily focused on wealth.

      You can use the work experience column instead of age.

      1. Dustin Faeder

        So that’s exactly the problem I’m highlighting. There are many definitions of what constitutes an “above average” person. By labeling this article the way you do, you seem to imply a close correspondence between a person’s quality and a person’s wealth, which seems like a false equivalence. Many famous artists, intellectuals, and saints were notoriously poor. The article would be more aptly named “The Average Net Worth for the Richest 20%, By Age,” which might be even more aptly named “How Much $$ You Would Have in the 95th percentile of wealth for Your Age Group.” These numbers are just guesses, but one further point they make is that I’m confused why you use the average rather than the median, since that is vastly skewed by the wealth of the 1%.

        You are right that a person could use the “Years Worked” column, which would then represent an estimate of the average wealth of an individual in some high wealth percentile who has only worked for X years. However, that would be a poor proxy for the different economic track typically enjoyed by those with higher educations, since the entire curve of wealth building looks different for different education levels.

        1. I understand you’re frustrated that you don’t fall into the above average net worth estimations. This has been common feedback by many who get a lot of education. Just simply blaze your own trail Dustin and make your own rules. These figures are just what I believe in.

          1. I also went to grad school, got MS and PhD degrees in engineering, and started formal employment when I was 30. I started off with a negative net worth. I have been married for 18 years, have 3 kids and my wife does not work. At 43 –even though I have worked 13 years– my net worth is about what your model predicts for my age group. I started late, but was able to catch up thanks in part to higher education. I also keep good control of my expenses and invest mostly in ETFs.

            1. Dustin Faeder

              So this basically proves my earlier point. Because of his additional education, JC was able, in 13 years of working, to “catch up” to the net worth of a person who began working 8 years earlier. And after those 13 years, JC’s wealth-building will likely outpace the average. So JC’s claim is that his net worth curve looks entirely different than that of a person who starts working right out of college, with his particular equilibrium point happening to occur at age 43.

  183. I guess I would never work for FS since my gpa was oh let’s say less than most. I was working since I was twelve albeit illegally but making the bucks nonetheless. At 35 I am very well off and I don’t know the gpa of anyone who works for me. My team knows that a spiffy resumes and connections to big names don’t mean a thing to me. Results, work ethic, personal values and creative and analytical thinking are all that matters in my business. Everyone has their ideas as to what they look for in a worker.

    1. As a well-compensated ~28 year old HF professional in NYC from a prestigious top 10 school, these numbers look exactly correct to me and are actually slightly conservative projections of my last 6 years of net wealth. I know you’re taking a lot of flak from haters, FinancialSamurai, but my own experiences have aligned quite closely with your figures. And you are far, far too kind to some of these over-educated haters (i.e, Dustin Faeder) who are sore about not making the list because they chose to dick around with a Masters in Philosophy from Tufts. Dustin, I guarantee if you’d made it into Big Law you’d be well into this list by 30. Instead you’re a criminal defense attorney in Tennessee, lol. (https://www.oneshrewddude.com/)

  184. Hi all,

    Interesting article and comments. Would love to hear from those who got into real estate with little/no formal education in finance/real estate, because my degree is in something else entirely. Especially interested in which books or resources you used to educate yourself. Although not a genius (like many of you seem), I’m a bit of an autodidact and very interested in the passive income (even if only supplemental to my low six-figure income) that owning properties can provide. Eventually want to manage multiple properties and get out of corporate America, and start “living absolutely free” as Samurai puts it. I’d then be able to focus more on my creative/artistic endeavors.

    Much appreciated,
    AD

    1. We went heavy into Real Estate right out of school and had 12 or 14 properties when I “retired” at 31 after our son was born. I still did a lot of buying (many at the Courthouse), selling, 1031’s, etc. and built the portfolio up to 20+. We also have 3 personal homes – buying our summer home at 29. I had no “formal” training (I was an Econ major in College and then went to Law School at night while working a 9-5). I did grow up with a mother who owned and managed small (4 or 5 unit) apartment houses and spent many a summer painting and cleaning those places. She was a School Nurse. I used to enjoy going with her to look at prospective purchases – but had no exposure to the actual “numbers”. I read everything I could get my hands on (“Nothing Down” comes to mind). These were years (decades) before any info was available on-line. Now, people can learn as much as they want by simply going on-line. I’d recommend a great web site (I have no financial interest in it), but I don’t know if that is allowed here. It’s free to join and everyone is friendly and helpful (from newbies to seasoned mega-investors). It’s only been during the past 5 or 6 yrs that my husband’s “outside” activities have caught-up with our RE NW.

  185. I haven’t looked in to any studies regarding the generational wealth transfer that is expected. I expect about 500K (the minimum would be 350K coming from an insurance policy that I own) – not big bucks in the scheme of things. Nothing from my husbands side. In fact, we have been partially supporting my inlaws (and sister) for over 15yrs. I know that my 20 something will be getting a lot, albeit 25 yrs down the road. We are, however, going to start “gifting” the max this year and we have funded his Roth (since he was 16 and still do today). We paid cash for his Ivy education (at our Alma Mater). For comparison sake, we were making 200K at age 30 – 25yrs ago. I don’t know what that would be in today’s dollars. I remember computing nw at 33 and it was 850K. By our early 40’s, it was about 2.5mil. We consider ourselves upper-middle class (not wealthy or rich). On a side note, I find it interesting that many “younger” posters here separate what each spouse has. We never have thought in those terms, but, then again, we married 3 wks after college graduation (with a negative net worth – husband had college loans). We came out of school in 1980, making 14K and 12K.

  186. We bought our first house at age 22 and had 10 by 30yrs old. We never over-spent when we were young. We took a lot of educated risks and now, in our 50’s, have a nw of 14mil. I handle the RE (20+ rentals) and my husband is a highly compensated executive. No one ever gave us anything. We did things outside of the 9-5 to get wealthy. My kid bought his first rental at age 20 and is worth about 200K at age 25. Yes – we did give him the downpayment. He is a smart kid and makes about 100K. You probably won’t achieve wealth from your 9-5. Your 9-5 allows you the opportunity to get in to other investments. You must not get so caught-up in the day-to-day that you lose sight of the real opportunities. Think outside the box and put some time in to it EARLY. We made sick $$$ in our 20’s, but not through the 9-5.

  187. I graduated from a lousy school with a 2.8 GPA. I skipped most classes because it was old guys teaching old stuff. Instead I learned how to identify challenges and solve them with critical thinking – a far more universal skill. Now I’m killing it at a prominent space industry distruptor, whose name I don’t care to mention. Prior to that I was at two successful startups in SV who are at the core of technology you use dozens of times per day.

    Some jobs [most in finance probably] require people who can follow instructions. In which case, grades might be a good indicator of how well a person conforms and performs to standards. Other jobs, like those that are paving new ground for humanity, require people to invent things that can’t be graded on anything other than success. In which case, deviations from the norm combined with raw talent are probably a better indicator of success.

    As a fellow above-average person I propose a change to bullet (1):

    “A person who is assertive and can develop skills that deliver value to and assure success within his/her environment.”

    Email/web/full name excluded for the sake of my employer(s)

  188. Hello! I have been reading this website for awhile but this is my first post! :) I think I’m on par for my age. 33, 350k net worth (290k in 401k and Roth IRA and 60k in pension) I plan on leaving my job due to military transfer in a few years and will be rolling my pension into an IRA since who knows if it will be there in 30+ years. My husband has another 150k in his 401k and Roth. We are working on early retirement. He has 8 years left in the military and I’d love for him to be able to relax after that. He is about to leave for his 5th deployment and we want to enjoy life after the military. Early retirement can be done with a little hard work and financial knowledge! I started work with a telecommunications company at age 19 and went to college while working. It was not easy but it gave me the ability to begin saving early (started my Roth at 19 and always contributed the max, contributed around 10% to 401k in beginning but just started maxing out a few years ago) I was fortunate enough for have my employer help with tuition reimbursement of 3k per year but I payed the rest myself as I went and graduated with no student loans. We have no car payments, only a mortgage. But our goal is to pay that off before he retires from the military in 8 years. No kids (it’s a little hard to do when he is constantly gone) but hopefully that will happen in a year or so. I also credit no children with the ability to save, although some people would have spent that money on nicer cars, homes, etc. This is not to brag but give my story and how I made it happen! )

  189. What an incredible bunch of drivel.

    I have a HIGH SCHOOL DIPLOMA (much like BILL GATES), and have a net worth of $2,000,000. I invested in real estate that I bought outright (NO MORTGAGES), have a steady rental income of $15,000 per month and an appreciating portfolio.

  190. I find your articles intriguing. Thanks for helping me think about the future. I’m 40 years old and worked for an HR Outsourcing firm for 14 years consulting on and working with DC and DB plans. I spoke with many clients and their employees and thought it was so sad so many 50+ year olds didn’t even have $70K or $80K in their 401(k) plans; these were also employees who were making decent money- $60K+/year. I always remember my Dad telling me to save as much as early as I can in my 401(k) plan. I feel that was revolutionary coming from an immigrant from Lithuania who never even finished middle school. I’m proud him and my Mom saved a decent amount for retirement. Unfortunately they have both passed away but left me with some good saving habits.

    I’ve saved around $320K in my 401(k) plan so far and have another $50K in my old ESOP. My wife is a year younger and has $130K. I feel comfortable where we are, even though it’s low according to your “what should you have saved by XX chart.” I feel your chart is the ideal amount to save but not very realistic for many because of low earning potential out of school and debt. I was fortunate and saved a decent amount living at home but I was only making $26K out of school.

    Regarding grades, my thought is the most important part is to graduate. I had a high 2 GPA from a state school in IL. I feel many more employers now ask for and take into consideration a candidate’s GPA, but I feel it doesn’t directly correlate to high job performance. The same goes with graduate degrees, especially when a candidate goes straight from their bachelors to their masters. I always recommend gaining true work experience before going back to school. The job market is saturated with many grad degrees with little experience. I still value experience but it’s unfortunate many just look at grades and degrees. As you’ve said and others have commented, it’s important to look at the whole person when assessing candidates.

    My current role is an HR leader in health care making decent living financially (I know that’s relative though).

    Thanks again.
    EZ

  191. I have to imagine most of the people on here are full of it. How are you 24 with a net worth of $100k? Or these guys that are in their 30s saying they have $500k.. You have to all come from money, there’s just no way these numbers are even possible unless you’re making $250k a year.

    My wife and I started bringing in about $110k a year after taxes starting 2 years ago (I’m 30)
    our monthly bills come out to about $7,000 so that leaves us with $26,000 a year. When you figure nights out, gifts, extra junk, that leaves me with about $15,000 to put away each year. I currently have a net worth of about $50k, with $25k in my investments. (would have been more if I didn’t have to pay for an engagement ring and part of a wedding last year) Even if I continue to put $15,000 a year away, and average 20% returns I’ll still have under $175k by the time I’m 35… someone please tell me what I’m doing wrong? FYI I’m doing way better than most people I know. I do know one guy that has been maxing out his 401k since he was like 22 and has about $65k in there, but he still lives at home with his parents at age 29!

    1. Eric, it’s glaringly obvious what you’re doing wrong – “our monthly bills come out to about $7,000”

      I can’t even imagine how your monthly spending is that high. Presumably there’s some major student loan debt in there – but even so, those are some high expenses! You don’t mention children so I assume it’s just the two of you.

      My wife and I are also 30, and make a bit more than you; however, we’re able to increase our net worth by nearly 50% of our incomes each year (mostly by saving…partly through asset appreciation) and give away about 25% of our income. Our basic spending each month is well under half of yours, even with a baby.

    2. You need to track where your money goes. An average American household brings home less than half of what you and your wife make, you definitely can find rooms to trim your expenses. When I was your age my husband and I made about what you make. We lived in a one bedroom apartment, ate at home most of the time, walked the park as a recreation, did staycations instead of vacations, invite friends over instead of going out (invest in a good margarita machine). In two years we saved $100k, roughly half the take home and didn’t even feel like we didn’t have fun. Watching our nest eggs grow is fun.

      1. Tracking where your money goes is EXACTLY what everybody should do! How many times have we withdrawn money from the ATM machine and then several days later we are wondering WHERE IT ALL WENT?! Now imagine if we don’t track our net worth and expenses, then that’s a disaster.

        I recommend everybody sign up for Personal Capital, a free financial tools program that tracks your net worth for you, sends you an e-mail once a week with the latest net worth amount, and highlights your portfolio performance. You can manage your expenses and income and analyze your portfolios for excessive fees too. They’ve got their software as an app for the iPhone or Android too.

        One we start knowing where our money is going, we can start optimizing our wealth. You saving $100,000 is awesome in two years, especially since it’s half your take home. Well done!

    3. Adam Miller

      I made my money by living small in my twenties. When I graduated college, I used a VA loan to buy a triplex and lived in the middle crappy unit while I fixed it up and lived there essentially rent free. Once it was fixed up, I used the money I saved to buy another triplex and did the same thing. I bought another triplex and lived in the crappy unit while I fixed it up. At that point, I had $1000 in cash flow with a free place to live and I was 24 years old. I am 36 now and own a B&B, and own 30 units with a net worth about $650,000. It all started by living small when I was young. Would I be willing to live like that now? Hell no!! That is why I did it when I was 22 and used to the college lifestyle.

      1. Wow, 30 units is a lot! Where do you own these properties? In SF, one unit would be at least $600,000, and a one bedroom, maybe.

        You are exactly right about doing this stuff in our 20s, b/c we won’t want to hustle as much when we are older.

    4. Not full of it, but definitely more frugal… Whatever you are doing to have a monthly budget of 7k means you haven’t yet recognized the difference between necessity and personal choice.
      I started out of university with a salary of 30k, and prioritized putting the max in my 401k that I was allowed. I am now mid-30s and still make less than 6 figures a year (some of the sciences really don’t pay all that great!), but I have maxed out my 401k every year that I’ve had one (there were two years where my employer didn’t have one), and have invested carefully and consistently. I have lived in a tiny studio apartment for more than 12 years in order to save up enough cash to buy a home. While I don’t live in SF, I do in another high cost of living area in California where even a fixer upper starter home will run you around 500k. Not coming from a family with a ton of money, I wasn’t yet in a position to risk it all and purchase when the market here began to skyrocket back in 2001. Instead, I opted for sacrifice and a little extra patience while continuing to try to live like a starving college student. Family and friends have heckled me for years, but I finally got my break earlier this year when I managed to land a duplex in a good neighborhood in town as a result of having invested the difference I saved between living in luxury for the past 12 years (having a larger apartment) or scrimping a bit (living in my shack and sucking it up). Even after buying the property, I have 300k in my 401k, around 60k in stocks and bonds, and 20k in my savings/checking. The duplex came with tenants that get to finish out their leases, so I am still just renting a room in town (which definitely sucks), but I am saving up even more money in the meantime. Net worth clocks in at about 630k. Monthly expenses = about $1200. I worked to pay my own way through school (UC) and came out with, while perhaps not the GPA I wanted, 0 debt. I worked my butt off to do it, and I still do today. I don’t work at my ‘dream job’ – and I don’t make oodles of dough – but my job has survived the economic downturn and has provided me with a roof over my head, groceries and enough extra money to save for retirement and to indulge in my various hobbies (within reason). I have only owned 2 cars – both bought used and with cash (I splurged last year and upgraded from my 97 corolla to an 08 Honda fit). I eat out, but usually for breakfast rather than dinner, and while I love to travel, I usually only manage to take one big trip a year, and I always budget for it in advance. I don’t try to keep up with the Joneses or my more affluent friends. Those that don’t respect or understand that I can’t always eat out at the 5 star restaurant, take the cruise to Mexico, or hop a flight to go skiing in Colorado with them and still maintain my financial solvency/independence aren’t really friends (or prospective spouses/partners!)… and I learned early on to eventually distance myself from them. When I am tempted to waver from my long-term plan I just remembering/thinking about where I want to be when I am my parents’ ages. I have seen how their individual work ethics, investment strategies, personal life decisions (divorce, home purchases, relocations for jobs/homes – and timing of same) and plain old dumb luck (good and bad) have impacted them – often for the worse. Who knows if I’ll be able to ever retire? I don’t. Not sure I’ll want to anyway. BUT – I do hope to have the duplex paid off by the time I’m 55… and to move up a little bit from my backpacker’s budget when I travel. After that, who knows!

    5. 7000 in monthly payments? Wow. That is crazy. Mine are 2200 on a tight budget, and 4200 if I allow for additional payments on the house, extra to savings, and extra spending for personal endeavors. 7000 is an extravagant lifestyle even for New York or SF. Seriously. And if you are those places you would be making way more than an extra 25k a year. And that is two people. Me think you need an honest reassessment of your financial life.

    6. G-Hard nuts

      If he was maxing out his 401K for 7 straight years, his contributions would have been way more than $69,000… let alone all of his capital gains realized in that period. What has been the average annual returns in the past 7 years… conservatively at LEAST 10%.

      I’d imagine he’d be closer to 150k than 69k. Just sayin.

  192. I don’t believe grades should matter. I kept a 4.0 GPA and didn’t bother finishing college when I realized that employers don’t really care. I taught myself finance and did better than the people in grad school. Then again, I love playing with numbers so finance and accounting came with ease. No employer has ever asked me for my GPA and when they see I didn’t finish college and ask why, I am honest about it. I was able to sell myself, without the added padding. My current salary is six figures. My friends who went on to grad school don’t even make close to what I do and they have major debt still from school.

  193. It’s a good post. Essentially what your financial life *could be* if you have batted 1.000. At 35 I’m $100k behind the $418k bogey, due to some unlucky events (divorce), some lucky events (buying a foreclosed property at a $50k discount to fair value), and typical early 20s lifestyling. But I don’t consider the $418k completely unfair.

    I’m with the author that grades often do matter. I’m shocked Google doesn’t have minimums, unless you’re a coding unicorn or data scientist PhD. On Wall Street, GPA minimums are the norm even for experienced hires at most mutual funds, hedge funds, sell side.

  194. Why is the delusional belief that grades matter needed to be considered above average. There is no significant correlation between good grades and higher salaries. When I completed my degree in Physics I had a 2.8 and had several job offers at graduation including Google where I ended up deciding to work.

    Going to college is important. Choosing a major employers respect is important. Choosing classes that are challenging and relevant to your career goals is important. Grades do not matter at all. Nobody has ever asked me my GPA since I graduated. Employers do not care.

    If anything focusing on grades encourages people to take easier classes and less classes per term. Only taking on as much as you can do perfectly may be a good way to keep your GPA up in school, but once you graduate you will be unable to adapt to the real world where that just isn’t practical.

    1. Impressive you got into Google with. 2.8 GPA. Where did you go and how did you get your foot in the door? Of the googles I’ve asked, several have said they have a minimum GPA cut off,

    2. To me, grades do matter. I work at a Fortune 500 company and when I interview people, I do look at their grades, but it’s only just one aspect of a person and would never hire on grades alone.

      Why does a good GPA matter? It shows to me that the person was disciplined in getting their assignments done, on time, and did a good job to deserve the grade they were given. If I had to interview a person with a 2.8 GPA right out of school, they better be damn great in the other areas I look at.

      1. I agree completely. Good grades to me help signal good work ethic and Multi-tasking skills potentially.

        All else being equal, of course if rather have the person with a 3.8 vs a 2.8!

        1. GPA in Science degree are generally overlooked in the industry… (have a 2.8 GPA in physics who have some understanding of advanced Calculus, optics, and eletronics are at far better position then folks who has a 4.0 GPA in humanities (which go back to you said “a degree that employers respected”). With good experience, a 2.8 phyical science or math graduate shouldn’t have too much trouble getting a job in a great company (but consider that they may not get into grad school which lower their chance of getting promoted).

          1. I don’t know about that Ivan. If someone got a 2.8, that’s a C+ average. There must have been some heavy, heavy partying, irresponsibility, lack of focus or something else going on as a result.

            If you were an employer, would you risk it over a candidate with a 3.3, all things being equal? There are tons of 3.0+ students out there looking for a job.

            1. Grades don't matter

              I’m going to disagree on this, to the extent of my experiences. I work for a fortune 250 company, and as a hiring manager have interviewed hundreds of candidates over the past 15 years. I put much more value on those that contributed to paying for their education and got a “C” average than one who got a 3.0+ but never actually had to work and whose education was paid for by parents. “Partying” is a part of most grads experience, but understanding work ethic is not necessarily understood by straight A students. Have never asked or cared during an interview…and upon post reflection have seen that our most successful employees not only had a sub 3.0 average, they are also amongst the hardest working and successful employees. That said..there are also those with above and below 3.0 that have failed… In the end, it’s about the whole person, their experience, and most importantly about their drive that determines their eventual success or failure.

          2. Professions and grades are not related to each other so I’m not sure why you’d mix up the two.

            Someone with a BA is most likely not looking for a job that requires a BS degree and vice versa. That’s downright foolish when the job says a B.S. degree required to do the job.

            We already know that people with STEM degrees on average earn more than those with non-STEM degrees and that there is a higher demand for those with STEM degrees than non-STEM.

            What I’m saying is when I’m interviewing a bunch of candidates for a particular job, they are usually candidates with the similar specializations/skills. for example, a bunch of chip designers. There’s not going to be a professional journalist, librarian, or teacher in those list of candidates when I’m comparing GPAs.

            1. Adam Miller

              Financial Sameria, it sounds like you are more familiar with lower level colleges. At top schools, a 2.8 GPA in an engineering track or Physics is pretty good. I am sure if he chose Physics at a top university, he wasn’t interested in getting as much partying in as possible.

              1. If you think William and Mary and Berkeley are lower level colleges, then yes.

                But nobody with under a 3.0, more like under a 3.5 would even get a response at Goldman Sachs, where I started. The same went for places like McKinsey, Bain, private equity shops etc.

                Why would a company bother interviewing a 2.8 in engineering when they have tons of 3.8s in engineering?

                Where did you go to school, what was your GPA and what are you doing now?

            2. @Financial Samurai: I had a 2.8 GPA in EE from a respected engineering school and had no problem getting offers. I was asked about it during interviews but I could show that I had a more practical grasp on problem solving than theoretical during the interviews – that’s the type of job I was applying for and the type of job I got. I had a physics professor once who said “it’s now what you know, rather its about knowing where to find it”… words I live by.

              It depends on so many things beyond just GPA. Saying “all things being equal” is meaningless because no two people are the same, nor are all job requirements dependent on theory or book learning.

              Having said that, I’d also like to say thank you for such an excellent article. It really helped me to understand where I should be at my age and gave me some peace of mind.

              1. No problem Lockon. Glad you were able to get a good offer with a 2.8 GPA. When you’re in a hiring position, if not already, you will probably also give those with similar GPAs more of a chance, and that’s good.

                Glad you found the article useful!

        2. I had an 2.80 GPA in Electrical Engineering. I also worked my way through college working 30-40 hours a week. Compare me to someone who got a 3.8 is that they probably did not work and had enough time to study where I did not. Also most were born with a silver spoon in their mouth. Grades do not necessarily point to intelligence or worth ethic. I am in a position to hire engineers and techs and I can tell you I could care less about grades.

          1. I think we tend to pivot towards what we know. If we didn’t do well, then we are more forgiving of those who also didn’t do as well.

            Good you are giving other 2.8 GPAs a chance! The question is, would you let your kids get below a 3.0 GPA?

            1. I help to hire and direct talent. I think, and agree with the posters that engineering (my discipline) is the misnomer. I lead my team, recommend whom we hire and don’t really consider grades. We aren’t looking at people for what a talking head nominated as their worth on a 4.0 scale – we want proactive problem solvers who can do the work we give them.

              I would take a 2.8 in Physics and weigh that person equally the same as any other candidate. In IT we are looking for talent. Having good grades is sufficient but not necessary to explain someone is talented.

            2. I 2nd Rob and add that grades are only a small part especially in Engineering. What you learn in school is only a fraction of what makes a person succesful. The smartest person in the world is useless if they can not work with people and cannot explain their thoughts clearly.

              I would take work ethic and can do attitude anytime over somebody with grades.

            3. You need to do your homework on the average GPAs at schools like Berkeley. The technical degrees tend to have much lower GPAs (there are very few 3.8s with everything graded on a curve). These same students had very high GPAs entering college. I could understand if you have a finance degree, then the average GPA is going to be (and needs to be) higher.

              Where did you go to school: Georgia Tech
              What was your GPA: 2.9
              What are you doing now? CFO

            4. Grade point is one of the few measures of success an interviewer has of a person who is just graduating college if that graduate has no other pertinent experience that applies.

              That said, companies who use grade point as their main criteria for hiring are missing the boat big time IME. I’ve been hiring and working with technical types (mostly engineers) for over 30 years now. Some of the best “problem solvers” i’ve hired and worked with were not 4 points.

              4 pointers tend to be good at theory that is already printed in a book somewhere. They usually fall flat on their face when they have to manipulate the formulae and/or the problem solving method beyond what they’ve memorized in a book. Which happens all the time in engineering fields.

              Of course i’m generalizing here as i’ve also dealt with 4 pointers that were VERY good at application as well. It’s just been my experience that folks with lower grade points tend to be more open to the possiblity that they are not always right and tend seek out other, better solutions.

              High grade point many times mean larger ego. Much larger! Which is a huge problem in technical fields.

            5. Actually, technical degrees tend to have lower graduating GPAs than their humanities and social science counterparts. I speak from this personally as an ME grad and as a tutor. The engineering programs usually are at least 130+ units programs to be completed in 4 years as opposed to other degrees. Chemical Engineering may be a 150 unit program and kids are expected to graduate in 4 years as well. The school I went to, albeit an average college, has plenty of 1-unit lab courses for engineers which really ended up being 3-6 hours of lab/lecture per week.

              Albeit dated, here are some results from a good college:
              https://talk.collegeconfidential.com/uc-transfers/900945-average-gpa-of-graduating-students-by-major.html

              The “average” graduating GPA for STEM is in the range 2.7-3.2 and about 3-4 for social sciences and business, and the top of the ladder is almost exclusively linguistics.

              I’m so glad that the financial and tech titans of the world aren’t made of up of linguists since a 4.0 is always better than a 2.8 GPA ceteris paribus.

      2. I too have conducted many interviews as an executive and have not one time discussed GPA’s during an interview. Its important to pass to obtain a degree, however, some do not test well and is not a good representation of a persons skills. Many tests are designed to have only one correct answer however there is a runner up with a minor discrepancy that determines the difference in a correct answer. So, it may better test some attention to detail but does not define a persons ability. Sure there are many opinions on the topic and quite frankly there is no right answer. The guy who made it into Google may have had to take some sort of engineering test at Google as part of the interview process so they could assess his skills which is a much more effective method than testing for correct answers….

      3. As a business owner and also someone who’s worked in pretty high visibility positions, I know that grades don’t mean much. I understand that some people place more value on them than others, but it really is all about who you know and how well you know your stuff.

        I beat out people with higher degrees and grades than me basically every single time I interviewed for a job because I was better than them. I don’t say that to be arrogant, but it was just true. I made it a point to do my own thing in school, and, in fact, just stopped going because I didn’t feel I was learning anything.

        Is my situation common? Perhaps not. But attitude and skill mean more to most employers than a piece of paper. Granted, there are jobs that I would want someone to have gotten good grades and worked diligently (a doctor, or tax accountant perhaps), but in general, I don’t think as many employers as people think really care about grades at all. It’s about how you carry yourself, how well you can demonstrate your knowledge of the applied subject matter, how well you can communicate your skills, and who you know.

        If the paradigm that grades and educational institution matter were true, there’s no conceivable reason why I should have beaten out people with masters degrees when I didn’t even have a bachelors degree. It’s about knowledge and confidence above most else. Fortunately, I only answer to myself as a boss now. So I make the rules. But if I were to go out into the “regular” job market again, I have no doubt I’d beat out most college grads because I have more experience and skill than they do…and it shows. I won’t lie, I go into an interviews with confidence. I’m not intimidated by interviewers. But again, I’ve been to war too, so I guess that prepares you for anything too.

    3. I agree with Joeseph, grades do not matter. There is a known correlation between high gpa and life time W2… Where the same person who received a mid level gpa due to working full time during college while volunteering their time at big brothers big sisters, and starting their own company is clearly someone I’d rather hire/partner with/be friends with/trust. At my company gpa is the last thing we ask an applicant and only if we don’t find enough other impressive life experiences. Everyone is different, to stereotype is to overgeneralize, however guys like Joeseph with a 2.8 typically are more well read, have higher work ethic, are all around more socially adept, and think much more creatively, than their 3.8 gpa counterparts. This is a reflection of the work theory popularized and proved by Captain Christopher Lee who postulated the idea of heads down time vs heads up time. If anyone spends all their time buried in the books, they will do well with gpa but miss so much of life around them, and vice vs. 2.8 gpa’s make better workers, friends, entrepreneurs, inventors, and investors… On another note, I’d take the bet that the graduating class of Any state college vs any Ivy League school has higher mean net worth per student over their lifetime.

      1. If you’re the CEO of your company and happier with hiring 2.8 GPA candidates that is great. I’d just rather own and invest in a company that hires 3.8 GPA candidates no matter where they went to school. Work ethic cannot be overemphasized.

        1. Anticlimacus

          A big 4 accounting firm won’t even look at someone with a GPA lower than a 3.0. I worked for one for 5+ years and was involved with recruiting during my employment. A good GPA is vitally important in that field.

          1. I knew someone who got a job at Deloitte with a 2.6GPA. Her major was Aerospace Engineering. Sorry but Engineering and Business aren’t in the same realm. People who couldn’t hack it in Engineering went to the Business school.

            1. Yikes, no wonder why Deloitte is having trouble competing in strategy consulting against McKinsey, Bain, BCG where they would never hire someone with that low of a GPA. 2.6 GPA out of 4.0 is literally kicking back and not coming into class.

              So many of my classmates at Bschool were engineers because they were stuck in their jobs and wanted to climb, but couldn’t bc they were pigeon holed.

            2. I’m not sure where Samurai is getting their information on Deloitte struggling with the likes of Bain, McKinsey, etc. Haven’t they been ranked #1 global consulting firm by Kennedy for aggregate revenue for the last 4-5 years in a row? Anyway, I think Spaztastic brings up a good point…a degree in Aerospace Engineering is a lot different than a BS in Markting etc.

    4. I don’t agree. I graduated summa cum laude in geophysics and I never once used my degree. What is did take away from college was fortitude. The fortitude to graduate with a 3.96 and a senior research paper that could have been published, was a great accomplishment. It showed me that I am a capable human being and that I can tackle anything I chose when I apply myself. That is invaluable in business, personal life, and all endeavors. You have to be kidding me if you don’t think reputable firms whose salaries are commensurate to success do not look at GPA and honorary decrees like summa cum laude as a basis for hiring. Trust me when I tell you, that when I see honors mentions I immediately take notice. I know how hard I had to work to make that happen, and no one escapes the effort when achieving honorary mention from a top IT school in this nation. It is a badge of grueling mental endurance. It is a worthy one. It is noticed.

  195. Hello,

    I’m 29.5 years of age. I’ve been working for 6 years. My parents helped me pay for 2 years of college I paid for the last 3 years. I graduated with a total of 27K USD in debt. I got my first job making $31,200 USD after tax. I worked there for 1 year 2 months before I got laid off early 2010(during the recession, I was working in oil and gas). My first year of working I lived at home with my mother for 2 years to save extra cash and drove a 1995 toyota corolla that was fully paid off. The first year of working I focused on saving every dollar possible. I was able to stay on a budget of around $100 USD per week for food and gas. I didn’t eat out for lunch and ate before meeting up friends at happy hour. After I was laid off I had about 25K in Cash and stocks. Luckily I started making money as the market was crashing so I jumped into the market at the bottom.

    I have been unemployed since. I first liquidated my stock account and started an online retailer that failed. I lost approx. $3,000 USD and about 5 months of time. Then I started a food business that didnt take off until early 2011. This business I kept for 2 years and solid it early 2013. After I sold the business I had approx $150,000 K in cash. I sold the 2nd business as I was starting a 3rd business(brick and mortar retail). It has now been a little over a year and I currently have about $125,000 USD in the stock market(managed by a financial advisor) and $75,000 USD in cash, no home equity. By 30 which is only 5 months away I should be worth close to $275,000 USD(business worth not included). I know I’m ahead but I still feel behind. I am currently looking to start a new business or looking to get into real estate. Any tips?

    None of my friends want to open up about their personal finances. Its frustrating!! Why is it so taboo to talk about net worth?

    note: I didnt start paying off college loans until last year because the interest was below 3%. I also found it difficult to get a business loan so instead of paying off college debt I decided to use the money to grow my businesses that luckily returned over 3%.

    I use a simple excel sheet to track my net worth. I update it every week. I have tried mint but its not too accurate on labeling different purchases.

    Tony

    1. Great story Tony about starting at the bottom, taking risks, and working your way up! You’ve come to the right place if you enjoy talking about personal finances.

      Your friends are probably a little embarrassed about their personal finances, hence why they don’t want to discuss.

      I highly recommend signing up for Personal Capital to track your net worth. They are a free online tool which not only tracks your net worth and sends you a weekly e-mail on how it’s changed with some latest news on the markets, it also analyzes your investments for excessive fees and helps you keep track of your net worth. I found $1,700 a YEAR in investment fees I had no idea I was paying with their free tool!

      I used to do Excel once a month for 10 years until I found them. It’s a great tool and a no brainer to use technology to help in growing our wealth.

      Good to have you around and keep on saving!

      Sam

    2. You should be congratulated for focusing on net worth at such a young age. It is an interesting metric to factor net worth/dollar of income earned, which keeps you focused on both sides of the equation. My experience tells me you are light years ahead of your friends, which will pay huge dividends in terms of overall security later in life. Good job!!

    3. Shawn Miller

      Tony – I think you are doing great and I applaud your entrepenurial spirit in light of challenging economic times. I speak with some credibility as I do financial counseling for the poor. I encourage you to get your debt – school and business – paid down or paid off completely. Once you are debt free you will not believe the no-stress, financial freedom you will have. One book that has really helped me is Dave Ramsey’s “Total Money Makeover”. I do not work for Dave or his organization so am not biased. I followed the process in the book and over several years got completely out of debt – even mortgage debt and am building net worth as I get closer to retirement (I’m 52). But anyway – just wanted to encourage you – you are doing great. Keep under-spending and over-achieving! :)

  196. Above average black

    I’m sort of unique in that i’m an above average black male.

    Income about 130k

    38 yrs old

    Never maxed out 401k. I’ve always pretty much done only enough to meet company match. Wanted my savings to be more evenly distributed therefore always saved more non retirement than retirement. I always figured I may have more pre 65 years on this earth than post 65 years. haha

    Net worth of about 512k

    33% Stock
    32% 401k and IRA
    25% Home Equity
    8% Cash
    2% Art collection

    1. I like this.

      I’m an Actuary and my wife is an Anesthesiologist and I’ve done numerous simulations which demonstrate that too much 401(k) money is a very real thing. I’ve consistently been above the upper end of your after tax ranges.

      It is demonstrable that blindly contributing 17.5 to a 401(k) pre-tax is not necessarily in someone’s best interest, in particular for very young individuals with long investment horizons that face numerous tax legislation changes and possibility of death and large penalties on distribution to beneficiaries. Of course, the mutual funds would appreciate all they can get in expense fees and if you are strictly trying to increase your mint.com net worth number for bragging rights, it is fastest to do this pre-tax.

  197. Don Hilario

    FS,
    TGIF!
    nice post- becoming a fan. and kudos to you reaching financial independence earlier than most.

    you’ve managed to create an atmosphere where its common to disclose some financial info- okay, i’ll play the game.

    here are some of our long-term goals:
    Comfy Retirement – My wife and I are maximizing our 401k. We plan to do so for 25 years earning 7% (adjusted for inflation) – not including the company match or increase in annual limits, the final value ought to do the trick (where we can simply live off the annual interest not including SS# (if any))

    $1M Goal in liquid assets- it looks like we won’t break our 1st Million until 7-10 years from now (regarding our saving habits and req RoR) <– Our challenge is to continue to save the same amount, if not more, when we start to have a family. The cost of raising a kid is (gulp) not cheap, and we'll shoot for a hat trick – 3 kids is our capped # (oh gawd).

    Our only liability is our mortgage which is 12% of our net income, though we refinanced recently and pay more than what the monthly amount is to help bring the principal down.

    Aside from increases in income, proactive budgeting, and our best efforts to remain balance-sheet affluent, any thoughts on how Gen X/Y ought to maximize their cash flow without compromising some of our major life goals? (raising/having a family; buying a new home; actually enjoying some of our income instead of feeling like we're always saving- 41% of our take home is a lonely fight).

    I call it a "lonely fight" b/c ever since my wife and I got married we just feel like we're 'alone' in this fight to reach financial independence like you and the like.

    we struggle 'mentally' to save while our peers have other sources of income (ahem ahem, still relying on their parents despite finishing college <– I know I'll get criticized for saying that, but hey, its how I feel). My wife and I take pride placing the onus of financial responsibility with us and only us.

    In the meantime, our peers are quicker to spend their money on cars and homes (they can't afford). Bottom line, its frustrating. Sorry, I deviated from topic.

    Seems to me, so long as you continue to earn more would be the first and only solution — but that too can get old don't you think?

    thanks in advance for your thoughts,
    DDH

  198. EarlyRetirementGuy

    Wow, I must be your ‘average’ Guy ;)

    Started work at 23, bought a house at 26.. the only difference is the tax-free retirement savings accounts and how they work here in the UK.

    Total NW of just over $70k after 4 years of work so I’m a little behind on the target chart but not miles off.

  199. Pretty good site. I, too am, a bit skeptical about some of the numbers people quote here, but I am pretty sure that a lot of folks here were more disciplined or more lucky than me.
    For me, all these posts from people who have higher net worth than mine (true or not) just inspires me to set more aggressive goals for myself. Would love to get thoughts on how to do better.
    I am 39, married, no kids (planning to have one soon) and an immigrant. Engg. degree + MBA – no parent help. I have had various salary ranges in the US:
    – $50K for first 5 yrs
    – $75K for next 4 yrs
    – $100K for next 3 yrs
    – $160K currently for ~3 yrs (new employer is a Bank)

    Here is the breakdown of my Net Worth ~480K, which I believe is low for someone my age and current salary:
    * Cash: $40K
    * Stocks: $95K (pre-tax)
    * 401K: $200K (started maximizing only 3 years ago, contributed ~6% before that. New employer match is 7.5%)
    * HEquity:$90K
    * Other Home: $70K
    Minus Debt: Car loan of $15K

    Note that I paid off ~$130K in student loan debts thanks to an expensive Ivy League MBA, which is almost break-even from a salary jump/investment viewpoint.

    My wife works and makes ~$150K, and has ~$150K in 401K but still has ~$60K in student loan debts and is mostly using her excess income to aggressively pay that down. We both do love to travel (1-2 international, 1-2 domestic trips /yr), have nice cars, eat out quite often – and are not likely to change our lifestyle drastically. I do maintain my budget fairly reasonably. My wife, not so much, and we keep separate accounts for the most part.

    So this is as genuine of a post as it gets, for all the skeptics who want to compare and benchmark for what it’s worth.

    1. Welcome to my site Ab, and thanks for sharing!

      Could you share some of the reasons why you didn’t start maxing out your 401k before the age of 36 given you were making at least $75,000?

  200. I would count investment properties as assets in a net worth calculation, because they are generating income, and I could sell them and realize a cash gain. But if I sell my primary residence, that money will then go to rent or to another house purchase. I can’t really “use” that money for retirement.

  201. My family is below average based on these calculations, but by lifestyle choice (even though we meet the ten definition points listed above). My husband, at 35, works on average 70-80 hours a week at a non-profit (yearly salary of $37k) and I am a stay-at-home mom to 2 young children (formerly worked as an engineer, with a master’s degree, which is how we managed to save as much as we have). So, I think we have a difference in priorities compared to many of the individuals on this board. We manage to max out our Roths each year, as well as put enough into my husband’s 403B to max out the employer match. So, we are not close to the numbers presented here, but I think we do pretty well all things considered. We have just over $200k in net worth, mostly in mutual funds. We’re also on track to retire by age 65, maintaining our current lifestyle. I say that only to encourage others on the board who may feel “behind”. I think it’s all relative…we choose to live with less, and even though we live frugally and save all that we can, we are still nowhere near the recommended numbers here. Regardless, I was wondering if home equity is supposed to be included in one’s net worth calculation, as shown above. We were hit hard by the housing market crash, and even though we supposedly had over $100k of equity in our home (previously valued over $200k, mortgage of $100k), we still had to bring $20k to the table when we sold several years after the crash…in any case, I have never included our home equity when calculating our net worth. What are your thoughts on this?

    1. Home equity can be calculated into your net worth. It’s the same thing as your mutual funds, if the market crashes, your 200k might be worth half of it or even less.

      1. Yes, but it’s not liquid like a mutual fund. I never really “see” that money. Even if I sell it, I would have to start paying for rent somewhere else, so I wouldn’t actually realize that gain. When I retire, my home equity isn’t something that I can spend to live off of. Unless, of course, I am planning on selling to downsize, then I would be able to pocket the difference between the sales price of the existing home and the new home purchase price.

  202. I see a lot of people doubt you can make a decent amount of money and be relatively young. I am not from a wealthy family and yet I made it just fine. At 34 I am pretty well off and that was due to a lot of HARD work. If you really want something you will find a way to get there. Take it from this single parent who became financially independent in five years without a dime of child support. I still do work because an opportunity presented itself that I just had to take, it was directly in line with what I wanted to do with my life and I thoroughly enjoy what I do. Save, invest (in the market and in yourself) and develop some kind of discipline.

    Net worth 7 figures :)

  203. I’m 27 years old, work in the financial services industry making about $70K a year. I have $120K in home equity, $37K in stocks, $27K in 401K (contributing 10% with 6% match), $4K in cash just for expenses. Only debt right now is a car that I’m paying down, about $14K. I’m frugal and don’t need material things at all to be happy, just give me my kindle with my books and I’m set. Any suggestions? I think I just need to find a way to make more money! Let the applications begin.

  204. I am 59 YO with 896K in 401K/IRA and 65K in pensions. I have 516K equity in my move that is worth 600K. I figure my net worth is $1.3M- how does this line up with the above average?

  205. Catherine Jean Rose

    Great article. I’m 40 and my husband is 44. He lost his job one year ago and started his own business – which he loves – but now makes about half of his former salary.

    Our home is valued at $350,000. Neighbors (comparable) just sold theirs for $372,000. We owe $70,000 and plan to pay off entirely within two years. I’d like to sell – move into a doublewide – and get my cash out, but the husband and three kids love it here..

    Other than that we drive a 10 year old mini-van and 10 year old truck (both paid for). No credit card/student loan debt or any other nonsense like that.

    So, according to this information I surpass the “average” Joe my age with $280,000 home equity.

    However, Retirement accounts are only at $330,000

    Cash, DRiPs, savings bonds, 529 plans, and Brokerage accounts total $120,000

    Grand total of $730,000 net worth.

    Even though my husband lost his job and employer matching 401k – we both contribute the max to our Roth IRA’s ($5500 each). I also have a pension, and contribute an additional $9600 annually to a 403b.

    I can’t believe some of the people wanting 10million or more to be happy! I don’t want to work past 50 or 55. My husband is already semi-retired and loving it. I guess the question for each of us is when is “enough” enough? With no mortgage, I can live comfortably on about $30,000 a year – but that’s me – low maintenance and frugal.

    1. Gotta love low maintenance and frugal people. I experienced two years of early retirement and I must say, you need much less than you think to be happy in retirement.

      Save on!

  206. This article is bs about saving $17,500 a year into 401k for people who just got out of college.

    An average American makes $45k a year.
    If you were to put $17.5k into the 401k plan, that leaves you $27.5k before tax. After tax, the take home is $21k thats $1,700 a month.

    How could you survive on a $1,700 a month with the most basic requirements below?

    Rent: $800
    Food: $300
    Gas: $150
    Phone: $50
    Internet: $50
    Student loan: $150
    Car insurance: $100
    Utilities: $150
    Entertainment: $200
    Car maintenance: $100
    Household items such as toilet paper, toothpaste, shampoo, clothing, …$200

    You also need to get a life by having friends, families, vacations, dating,…

    This article is too bs

  207. Feeling Poor

    I’m 42 years old and feel pretty good about myself until I read this site. I have a 100k year job (plus 20k or so in bonuses) but am a bit behind on the 401k balance. A lot of that has to do with aggressively paying on my house because it makes me feel good to have a a mortgage free house.

    My wife who isn’t a saver makes considerably less: around 40k.

    Our house is easily worth 300k with no mortgage.
    We just paid off a condo worth around 130k (for a college residence–I intend to try to rent it out afterwards, or sell it).
    350k in 401k (I’ve recently bumped up my contributions to start maxing it out)
    Around 68K in Roth IRAs
    Around 80k in 529 plans
    Around 50k in an e-trade type of after tax account–this is where I want to start aggressively building up passive income investments, with dividend stocks and REITS.
    Around 30k in cash savings.
    Both of our jobs currently have defined benefit pension plans in place, both of which we are vested in–I don’t put a dollar figure on those but figure those will provide 3k to 4k in retirement income when we retire, depending upon when we retire and then when we choose to draw it.

    I generally don’t count 529 plans in my net worth. Without those Quicken is telling me I’m right at 950k . . so approaching one million. I’ve probably been too conservative and skittish when it comes to 401k savings rates and investment choices.

    Which ought to be pretty good. But this site makes me feel poor.

    The upshot: I have no mortgage so maybe I can double down on the retirement savings.

    What do you think?

    1. I don’t think you should feel “poor” :-)

      You deserve credit for how well you’ve done, and you seem to have potential to save even more. When I read many of these posts, I feel motivated and inspired to see how I can improve.

      Be inspired.

  208. I consider myself above average. I started out of college with a good IT consulting job making $42k in 1998. Consistently have made 10% per year raises until now. I took your numbers and one would have to save 26% of pre-tax income and make 7% yearly on that to make it work. Thats fairly aggresive I would think. I would put myself in the top 20% of my peers from an income standpoint based on what I know. Perhaps “Above Average” isnt the right description. I would call your numbers probably a top 10% or top 5% scenario.

  209. Penny Smart?

    Looking for a little guidance and insight from fellow posters on FS, as I have been impressed by the profound insight that has been offered. I am a recently turned 36 y/o married male, with a 220,000 fluctuating income in a sales positions. I have been fortunate that I have been in a relatively high income sales capacity since 26, however, the type of sales I am involved in is more of young man’s game than the middle age that looms in front of me.
    My family’s net worth is as follows:
    -Home is worth approx. $386,000- which we have paid off in full.
    -Retirement is approx. $321,000-I max out every year, but do not have a company match ( yeah working for a start-up)
    -Index Funds-$17,500 via vanguard
    -529 plan: 22,000 for our 18 month old, and we have #2 due early August.
    -Cash: 161,000 in various accounts due to real estate LLC’s
    -Real Estate LLC #1: 2 properties combined value 290,000 that generate 2350.00 a month, I am a member of the LLC with 50% share.
    -Real Estate LLC #2: 2 propreties combined value $280,000 and we owe $43,000. I am a member of a LLC, the properties generate 1925.00 a month. We have approx. 800.00 a month in combined mortgages.

    Through in a few ancillary items ( an e-trade account, wifes wedding ring, and 2 mid 2000 family sedans), and our total net worth is $1.2 million (depending on the markets, etc).

    My game plan was to buy 1-2 100,000 properties a year that would generate at least $1000,00 a month income. However, the property market in the Denver metro has gone nuts, and has most likely made this a pipe dream.

    I like my job, but recognize that it is:
    1. Volatile-you are only as good as your last quarter.
    2. to some degree I have hit a ceiling.
    3. As one would expect for the income, it monopolizes my time. With an expanding family, I would like to “live life a little more.”

    I am highly disciplined, and have been able to follow a budget the last few years. As you can tell, I am debt adverse. What would be some strategies other readers of Financial Samurai might employ at this point to increase net worth and also create cash producing assets for the elusive passive income we all crave?

    Thoughts, as the real estate boom, has forced me to look for other avenues?

    1. wallstreet25

      You are kind of rich, so my advice to you is to get an advisor. why? easy, because if you dont hire ppl like my boss, then why would my boss hire people like me. Then if I dont get paid, then i dont get educated. Additionally, you seem pretty sophisticated with your llcs. go to barron’s find a legit one you like in the top bsds of the state. Most of them only go for ppl with a mill though meaning you are going to have to liquidate your stuff to even be considered, but juss sell them on your baller salary. Make sure their fees are reasonable at 1%. Anything more, i’d look elsewhere, they are likely charging you higher because they think your account is too small for them in which case find another. Having said that here is some short advice about real estate macro wise:

      real estate prices are more stable especially ones that are not publicly traded like yours. You are also renting out these assets, so it is not like your cash flow is negative. If I were you, and I had your expertise in real estate, I would stick to it. Its a more stable game (excluding the last decade, this shit was just bubblicious). You seem to be a worrier who likes to make active decisions. So i advice you to continue what you are doing. Your Real estate is pretty concentrated though, which is a big concern. I like the idea of having multiple 100k real estate assets, dats kind of diversified if you have a mill. Additionally you could buy reits, but they are almost equivalent in volatility to equity markets. I’m going to guess your sales job is correlated to equity markets, so your diversification to real assets is a huge positive, since everyone needs shelter. You are right to have concern though as I am for sure that real estate is going back to its regular crap 3% nominal returns in no time. I dont care how fast the economy picks up, rates will rise with it, and it will hold house prices from goin up, but I doubt it will go down as well since it is a renting asset that you can raise rents from. So as people become richer via higher wages, you can juss collect it through higher rent. Lastly these renters are cash starved and their credit may not close that deal. At the same time, interest rates will rise making their payments higher while banks gobble up their higher income. Meaning: they aint going to buy a home anytime soon meaning your rent income is safe.

      In any case, i have no idea about denver specifically, but if you are concerned, then you need to start divesting slowly. Try to get get good prices you dont have to get out right away. Federal reserve will not notch them rates until next year (this is consensus, i think), additionally they are only targeting short term rates, not long term rates, we could end up with a flatter yield curve, meaning short term rates equal long term rates. If you worry this much about the real estate market, then you are not going to be happy with equity markets. That being said equity markets have the highest rate of return at ~10%. Not gonna get a cap rate like that. Anyways good luck! I personally dont think I can hit your number at your age so mad props.

  210. Just so you understand if you have met these numbers you are an absolute financial superstar. I mean you are really doing great. Lightyears ahead of most of the country.

    Let’s look at the 2010 data – the median household retirement account balance for workers aged 55 to 64 was $12,000. A third of households had no retirement savings at all! (“401Ks are a disaster” USA Today 3 April 2013.) 75% of Americans nearing retirement age had less than $30,000 in their retirement accounts, which Forbes called “the greatest retirement crisis in American history.

    If you are 30 and you have $250K you are seriously crushing it. I just say this because if you are not at these levels don’t beat yourself up. I got crushed by the stock market collapse, and then again by the real estate collapse and then had to take care of a sick family member. These numbers are a great goal but unless you have your own successful business or a six-figure job that you planning on committing 30 years to I’m afraid it’s not going to happen.

  211. Good to see some numbers to compare my net worth with. I am 36 yrs old, have an engineering degree from a top school. I am married, but my wife is still in school and hasn’t started working yet. My numbers are as follows:

    House equity: $400K-450K
    Various retirement accounts(IRAs, 401Ks, etc.): 385K
    Regular investment: 105K
    Savings bonds: 25K
    Savings account: 77K
    Jewelry, gold, etc.: 25K

    Looks like I just crossed my first million in last few months…hopefully, it’ll grow much faster once my wife also starts working.

  212. What is odd is when people comment about ‘being on track’ and then stating they have 1.4 million dollars in net worth. My question is, on track for what, you should already be retired!

  213. FanacialS,

    I dont really want to retire anyways ( but I want to feel retired when I am 35 yr old) by then I want to have properties paid off that paid for everything in case I dont the same income now.

  214. Great table, but slightly misleading title.

    “Above average” implies anything above the mean or median net worth for the age bracket.

    I’m willing to bet the lower range is the top 10% for the age group and the upper range is the top 1%.

    Why? Aside from certain engineering fields, ibd + trading, and high end consulting, very few jobs make more than 70k pre tax after college.

    Add on to that the debt load upon graduation. I graduated from a “need blind” school with 80% of tuition + board covered by need based financial aid since my parents are “poor” at 70k annual income and still ended up with 20k in debt after graduation (net 15k of summer internship money and 30k from parents). Not many people am as lucky as I was with finaid or being an only child with supportive parents.

    In particular the first 8 years if your chart are very heavily tilted towards the top earners. After Bschool or med school I could see a lot more people definitely catching up to the above average definition. But even that debt for tuition isn’t built in at all. Even the would be entrepreneurs arnt striking it rich in the first 4 years.

    To those who’ve commented here: congrats! Virtually everyone’s way ahead of the curve and can probably get a college building named after then by the time they die.

    Even if your slightly below the curve your probably way above the actual average.

  215. Hi Sam,

    One thing to note about 401(k) contributions…..if one is considered “above average” then it also stands to reason that same person may be treated as a Highly Compensated Employee (HCE), in which case you may not be permitted to make the maximum $17,500 401(k) contribution. I find myself in this situation. Would you suggest contributing more to after-tax accounts to make up for the shortfall?

    I am 32, my wife is 28 and we have around $128k in my 401(k), $45k in wife’s solo 401(k), $22k in SEP/back door Roth, $85k in taxable accts. and around $150k in cash equiv. (we are making a down payment on our first home soon). Our vehicles and her wedding ring are valued at $30k for a total net worth around $460k.

    Seems we’re on track now but our income fluctuates substantially year to year and we are expecting our first child in 1 month!!

  216. This is a great site! I came across a few articles in the past couple of months when I was doing research on investment properties, personal finance, etc.

    I am 28 years old and have been working full-time for 6 years (salary range $70-105k) and worked part-time throughout high school and college. I lived at home for two years after college to pay off student loans (only had $15k in student loans) and saved over 50% after taxes. I did inherit about $30k in my early 20s which I saved for my first investment property. I currently own a couple of investment properties. My numbers are in the above average net worth:

    Category Amount
    401k $54,233.00
    Cash/Stocks $94,426.50
    Property Equity $151,610.00
    Total $300,269.50

    I didn’t max out my 401k because I’m always saving for down payment for investment properties. I’m considering purchasing another investment property but have to come up with 25% down payment for an investment property mortgage. I don’t want to sell my stocks and always keep at least 6 months of living expenses in cash. Do you think it makes sense to take out a loan against my 401k for an investment property?

    1. Very impressive, YY. You are doing so well for someone so young.

      I’m no expert, and have made plenty of financial mistakes – so please take this as an opinion and perspective to consider: Only borrow against the 401k for an absolute emergency.

      I think it’s OK to slow down a bit… first max your retirement savings, eliminate all debt, and then save enough to buy more properties with full cash offers. You seem to be very good at real estate.

  217. Great website. Thank you.
    Have been a single mom w/ no financial support from ex for 12 yrs- have a 14 yr old. (Lost half my 401k to him and got half of zero in return so basically had to start over.)
    My current stats:
    Age 52
    Earn: $50,000. yr
    Save 21% to 401k and Roth plus 9.9% company match (balance $235,000)
    $30,000 in Savings and Checking acct.
    Home value: $325,000. – owe $84,000.
    Am I doing enough? Not sure what else I can do, I think I am already doing my best. Any thoughts? Thx.

    1. Hi Margaret,

      Given your circumstances, I think you are doing GREAT! Keep up the good work. Excellent home equity, good savings rates. I would try inching up your savings percentage 1% at a time until it starts to hurt. The pain will go away eventually, and you can try saving more.

      Best to you!

      Sam

      1. Thanks Sam,
        I try to be a mom, first and foremost. I struggle w/ the balance of live for today, but save for tomorrow. (I am a workaholic)
        The 9.9% match is brand new only after my employer froze our pensions 2 yrs ago. Everything I have, I’ve earned the hard way.
        We did just get a one dollar an hour raise so I did raise the 401k 1% to the current 21%. Sometimes I think I am working just to fund my retirement so know what you mean about the pain, but I’ve done it.
        I do try to take a vacation every year to show my son the world-my reward for being a penny pinching, frugal single mom.
        My mortgage interest rate is 2.75% so happy about that.
        Thanks again for your positive words! :)

    2. Margaret
      you are managing your expenses and savings in a very smart and reasonable way. Inspiring.

      I think you net-worth is on track to exceed $1m before you are in your mid-60s.

      For your income, what is the best-case, worst-case, and most-likely over the next 15 years?

      1. Hi Thomas,
        Thank you for your encouraging words!
        Was out 4 mos last year due to work related injury and surgery so only earned $43,000. (plus some tax free work comp wages) Really missed out on the employer match and my own contribution during this time.
        This year on track for around $60,000.- if I keep up all my overtime.
        Not much room for raises, a percent here and there but I am ‘topped’ out.
        I have 26 years seniority so ‘safe’ as can be in today’s environment.
        Worst: Taking another pay cut as I have done twice in 12 years.
        Best: Getting some of it back.
        Most likely: Pretty much the same as I’ve been earning…
        Thank you again. Good to see I’m doing ok.

        1. Hi Margaret,
          Ok, back to your original question – about ideas on what more could be done.

          From your summary, about half of your net worth is in your home’s equity. Homes can be emotional, so I understand if this idea won’t fly, but I’ll put it out there for you to consider.

          If you were to sell your house, and buy a place for around $190k cash, you would be debt-free and double your liquid cash savings. You could then save even more at work, and you wouldn’t have mortgage payments.

          I am thinking along the same lines, since we also have a lot of net worth locked up in our house. In a few years, we will also consider selling and buying something for cash.

          Keep up the great work.

          1. Thanks for reply Thomas,
            Sorry out of town working. Do not have laptop, smartphone, Ipad, Ipod, etc..
            I kept the home after my divorce for a stable home environment for my son-rented out 2 rooms to cover 1st and 2nd mortgages and get out of divorce debt. Ex has moved 5 times.
            Just looked up the internet value (hmmm?) and says my home is $405,000. I live in CA so homes expensive and condo’s almost as much so not sure about down sizing. Emotional attachment yes but something to think about.
            I’ve rented a room out for over 10 yrs, same man that I forget about that income but it does help. His rent has paid for my vacations, home improvements and car payments over the years. I do give up privacy though.
            I asked my original question about doing enough as I always feel I am behind the ‘8 ball’ in trying to catch up after my divorce and what I lost- and now being 13 yrs from retirement. I think I will have to work at least to that age to accomplish my retirement goals.

            1. You are on track to be a millionaire before 60. I think you are managing your finances well, and you are smart to seek opinions and ideas for improvement.

              I would continue to reduce debt and build savings.

              Like Sam said in this post, look into your annual fees for your funds. Ours were high, for funds that were not even outperforming the S&P500.

    3. wallstreet25

      mad respect. you are basically in same position as my mom so here are a few tips. read your info and your home equity balance is good, really good cash reserves (maybe a lil too much), but your retirement is a bit low @235. Based on this, you shouldnt even contribute to anything roth related. You are most likely better off pre tax 401k investments and prolly want to focus on that until it reaches a million since you are prolly in the 15% to 25% marginal tax rate. At 21% contribution of salary thats ~12k/year. Assuming you are all in equity now, you’ll prolly hit millionare status at 65. Bottom line ditch the roth.

      Another question is what type of mortgage is this. 30-year fixed, 15-year fixed, or is this a 5/1 ARM. At that balance, and at those rates, I would assume you are in an ARM, if so, move it to fixed. These are prolly the lowest rates we will see in decades to come. having anything adjustable is silly, unless you plan on selling your house in the next 3 to 5 years. So bottom line get a 30-year fixed mortgage at the same balance if you want to be conservative.

      Now here is an optional portion. If I were you, with a steady job with seniority privelege, i’d classify you in the safe zone in terms of having a job in a market downturn which means you can take some risk, now add that you have financial sophistication and are willing to take risk. How to go about it? I’d monetize the house through a refinance, take that money and invest it in the market. You get a tax deductible plus you get the return on the market. You dont have to do this though, you are fine like that especially @2.75 interest rates.

      1. Thanks Wallstreet25 for the reply!
        My 2.75% is fixed for a 15 yr mortgage- have about 12-13 yrs left on that. (I did a no fee re-fi a couple years ago.)
        Did look at my 401k- have 9% in 401k and 12% in Roth. I am in the 15% tax bracket w/ all my deductions.
        I do realize my increased Roth is adding to my gross and possible move TO a higher tax bracket.
        Are you telling me to contribute only to 401k, not any to Roth because of my tax bracket?
        I was told to slowly start converting my 401k contribution to Roth the older and closer I get to retirement which I started doing hence the now 9/12 split vs. the 15/6 I had before. (Sorry if I ask a dumb question.)Thanks.

        1. wallstreet25

          1st of lucky you. that mortgage you got 2 yrs ago was prolly 2012 when rates hit their all time low. I’d keep the mortgage.
          2nd, If your marginal tax rate is 15%, you can choose either. But that’s good that you notice that your bracket increases when you contribute to a roth vs trad. Bottomline, avoid the 25% tax bracket by increasing trad contributions as needed.

          As a general rule of thumb, you put money into roth when you are at a low marginal tax rate, or if you have a large tax deferred account (a 401k) already. But low marginal tax rates take priority.

          personally i would never use a roth. i like to offset my income. i prefer to pay taxes later. I also prefer to share the risk with the taxing authority. Lastly, its pretty easy to keep investment taxes to a minimum even in a taxable acct. So a roth juss does not do it for me. But i see why others see the benefits.

            1. Good article Sam!
              My original mortgage was adjustable and about 5-7% w/ a cap of 11%, but oh so up and down and stressed me for 10 years. I no fee re-fied to 3.25%, twice bought down the margin (for 2 x $500.) to get me where I am today. Very happy now!
              My ex is paying almost 2.5 times my mortgage (w/ insur and escrow). He never bought w/ all the money I had to give him. Not sure where all the money went, but he has continued to rent (a very nice house in a pretty nice neighborhood) cuz he cannot come up w/ the 20% down payment so understand what you meant in the above article link.
              Best of luck to you!!!
              Good luck w/

          1. Hi Wallstreet25!
            You all really make me think (a good thing..)
            I went back and looked at my 401k account. $200,000. in Traditional, and $30,000. in Roth plus $6,000. from company match and bonuses. (Have another $8,000. in another acct) I did not realize this was my split. I did start Roth when it was first offered though.
            As far as my taxable amount and looking at the 2014 tax table. I am well under the $49,400. My taxable was $33,000. in 2012 and $25,000. in 2013 due to my work comp injury and time off work. So far year to date I have $24,000. taxable income so think I am ok still w/ all my deductions.
            This was a big reminder to keep an eye on my 15% tax bracket.
            I ‘should’ be receiving during retirement (at current rate and working to (uugh) 65) about the same income I am earning now.
            Thanks for keeping me on my toes!!

  218. Hmm, I though I was doing extremely well! Maybe I am..
    Also, I am guessing that most people ( who make less) feel afraid to comment after each person is making 100k or 500k a year.

    My wife and I have a business that is growing each year.

    Equity on the house is probably close to $160k
    cash on hand $80+
    cash on hand in business accounts $50k
    Merchandise on hand (business) : about 120k that can easily turn into cash
    I wouldn’t call the business actual money since it has to be sold first… but I probably have more than 500k there… but without counting business value.
    then total NW should be around $410k

    We are 26 and 25 yr old. I don’t know anyone my age making more than 100k a year … that’s why I think ( smaller city) we are doing really well in our area.

    We probably start making $500k+ a year on 2015 if business keeps growing.
    Right now, I know that we can easily get to 2-3 million NW… But, when I get to 35 I want to slow down.. I want to buy two rental properties this year, My idea is to be a landlord and not have a business at all ( to stressful we work 80 hrs a week easily, and the times we work 20 hrs, I look like teller marketer getting calls from employees 10 hr a day.. )
    Goal: have 20 houses paid off… maybe when I get to 35-40 yr old. ( so is not much when you think about it, it be around 2.5 million dollars invested)

    1. Your figures do look good. And if you stay on your path, there’s no doubt you’ll gain financial independence before 50.

      Everything is relative in personal finance after all. Good luck!

  219. Wallstreet25

    I am over high end for my age. Been maxing out since 22 in 401k cuz I get taxed a lot and do Roth IRA to diversify tax risk and cuz I can’t do trad Ira. No plans to buy a home. I am in the top 10 percent of earners. Came from middle class immigrant background. Full ride scholarship and I am a level 3 cfa candidate. Series 7 and 66. Now some education, home equity real returns is about 0 using shillers data that is over 100 yrs old. People in it made money due to the bubble that started in 90s and a ton of leverage. Equity real returns is about 7 percent using same data or 10 percent nominally. Now I am juss surprised that the people who have money under 40 keep so much in cash.Having said that the economic cycle is prolly in the back end and I would not lever up from your allocation. But the idea that you successful people kept so much cash with no liquidity expectations is retarded to me. I suggest getting an advisor to tell you what to do cuz frankly you may be rich but you have no idea what you are doing. Lastly, don’t time the market. No one can. I saw people up top who ditched the market completely because of a 30 percent gain. Right mind set, you derisk when it’s going up, but still retarded, you never leave the market altogether. Having said that great site.

    1. If you can survive on Wall Street for 10 years, you will have it made, even in today’s somewhat compressed compensation environment. I did 13 years and got out to work on my online media business full time. Survive and you will be rewarded!

  220. I fit the “Above Average Person” definition but I tell you my equity, savings, and overall net worth are WAY WAY WAY below average. Because it’s negative. I managed to pay off my tiny student loan quickly but I started saving for retirement a bit late. But the biggest factor was that I bought my home right before the crash and now I’m $43k underwater :(
    I keep pushing forward though and I hope that one day I can be on the low end of your above average estimates!

  221. Its nice to see how others are doing (if for no reason other than as additional reference points), some appear to be doing better/worse than I am. Some of the posts do not appear economically feasible, but maybe a little luck was a part of the equation.

    My numbers appear relatively close to the above benchmark, income/net worth:
    24: $59,000 / $32,488
    25: $63,000 / $64,584
    26: $72,219 / $89,830
    27: $104,275 / $141,245
    28: $140,166 /  $185,969
    29: $224,150 / $277,220
    30: $265,731 / $447,443
    31: $246,295 / $571,356
     
    Projected Net Worth (assuming saving 50% of projected gross earnings, 1% interest on cash, 6% gains on investment portfolio and 2% appreciation of rental property that will be mortgage free in 2016):
    35: $1,093,712
    40: $1,977,062
    45: $3,289,926
    50: $4,751,967
     
    The single greatest blessing in this long journey towards financial independence was my willingness to take a leap of faith and accept a job opportunity overseas (this accounts for the large jump in income when I was 29). I now work in a country with no income taxes, and after considering all the US tax deductions/credits I only pay US federal income taxes on amounts I earn over ~$160K. This has led to a situation where I can still save over 50% of my gross income, while not only living for the future (e.g. my wife and I take ~4 international trips a year now, we try not to spend too much on material things but find it sensible to ensure exposure to the many amazing things the world has to offer).

    1. Nice projections, and glad you’re doing well. Where overseas are you?

      I’m a consultant for Personal Capital and have been using their free software for two and a half years now. When I believe in a no-brainer, I’ll highlight it in relevant articles about investing, savings, and retirement. You’ve got to be proud of what you do.

      Mint is great for budgeting. Personal Capital is focused on the mass affluent who have over $100K liquid to invest. PC has a good cash flow tool like Mint.com, but they’ve also got great risk and fees tools.

      1. I currently live in Dubai, a place i would never have thought i would end up. But it’s a great hub (spend about 30% of the year traveling for work and leisure).

        I think Personal Capital makes sense as an aggregator when investments are spread across various institutions, but i have close to 250K in various investment accounts that are all with Vanguard, and they have portfolio analytic tools that provide data like fee analysis and risk exposure. We use mint solely to monitor our expenses vs our budget (which when married is a huge factor in maintaining financial order).

  222. Sammy My Boy — Your points #6 through #10 seem to all be grounded in having a positive mindset. What are your favorite books on this topic, if you have any?

  223. I call BS… on Jim

    And I will add, My wife is an Aerospace Engineer (P.Eng, 17+yrs) specializing in Propulsion Systems for spacecraft, now more to the Program Management of technical resources… I was an R&D Engineer (P.Eng 15+yrs) specializing in Quality / Reliability with Stanley Black & Decker… I’m just say’in but I know many who work throughout the world in many global industries in highly specialized industries, some of whom own their own companies… again I call BS. At 42/41 our NW is 1.4M, and we are pretty conservative with our conventional investments (self directed retirement funds, non-registered stock accounts and 2 owned properties (home and recreational). At 1.4M NW we are probably in the top 5-10% of households at our age… So Jim, if you feel it necessary to just type, many of us on these sites would rather you do it somewhere else…

    To JamesM – chill man… My wife and I both were not privileged, but worked hard to achieve what we have achieved. Yes, some have a helping hand, and well, what’s wrong with that? we both wish we had… Unfortunately I can remember trying to balance my 3 part-time jobs with passing 1st year exams… That’s probably why it took me a couple of extra years to get through…

    As to other commenters in this thread especially BM, Sam’s NW guidelines are pretty accurate for those I associate with, who have University degrees (I’m Canadian), or who own their own small businesses The key to financial success, live on less than you have coming in, and learn how to invest the rest. Every goal is achievable with a realistic plan, and the right education – Cheers.

  224. These numbers are only possible with a far above average paying job beginning at age 22. And no student loans, car loans, or spousal debt.

    I’m age 25 and just began working after finishing my masters degree in a feild that pays above average. My student loans are near the average and are all from undergrad since I earned a full scholarship for my graduate degree. I still owe some on a modest used car I bought out of need in graduate school. Through loans work and scholarships I paid about 80% of my education costs and my parents helped with the other 20%.

    The numbers from age 22-30 make sense for someone who got their bachelors in petroleum engineering and makes 90k out of school.

    I would say a good above average measure would be 15k or less in total debt (combined student and car loans), makes $60,000 a year starting out (mostly engineers; average BS starting salary in most feilds is 30-40,000, so 60k is very good). If this person is an above average saver they may reduce expenses to 70% of take home and save the other 30% about 15,000/yr for retirement funds and debt payment. In 5 years assuming some invesent returns and salary growth and they buy a $10,000 used car in this time, I think a networth of about $100,000 is to be expected.

    It is from this lint I believe froth accells as there is 5 years of career specialization to leverage raise work compensation and now a substantial amount allowing for business startup capital or home and real estate investment.

    Since I’ve been working the last 6 or so months I’ve about cut my negative networth in half but it’ll be about a year before I really have a stable positive networth. It may be even longer if you factor in getting married and shared student loan and vehicle debt, or that could possibly speed things up by sharing living costs.

    I think the early wealth progression theorized in this article is too rapid even for above average (they are more like birth rights, having zero debt, low expenses, and a completed education and earning a high income by age 22… Very very rare), and the wealth growth in later years too slow but also more realistic.

    I’ve set some aggressive goals for myself regarding wealth building and expect to at least double these figures God be willing.

    Reading about others success gives me motivation to keep working hard to become financially independent. I just want to build enough wealth that I won’t be dependent on an employer or the government.

    I agree with another poster some
    of the success touted in these comments is hard to believe. I’m sure there are the rare successes out there, but they are indeed rare.

    Home owning is not the investment it once was and people are a lot more transient than they once were so buying and selling a home every 5 years and the associated costs make renting more desirable, but home owning in the long run is still probably the better choice in most cases if one has the means.

    Fortunatley, wealth building for the above average has become easier than it was a generation ago.

    1. BM,

      It’s great you’ve got a good attitude on your hands. I would say if one can start earning $50,000/year +/- $5,000 out of college, then one can achieve these figures with normal raises, promotions, and aggressive savings habits.

      There’s more difficulty achieving these charts the first 10 years, then the rest of the years. With six months of work experience under your belt, you should look at these charts as a guideline. I think you will SURPRISE yourself at how much you can build.

      Good luck! Sam

      1. I got my first real job at age 22 and it only paid $32,000/yr. I don’t have an engineering or business degree, just a BA from a liberal arts college, so I was never going to start out with a huge salary. But that doesn’t mean that I didn’t excel at my job, get raises/promotions and eventually make over $100k/yr before I turned 30. I didn’t start a successful business like many others here, so I’m not a millionaire, but I still consider myself an above average saver and investor since I’m ahead of the charts above. To those who doubt Sam and other success stories, maybe you should reevaluate your own lives and choices instead of assuming everyone else is lying, exaggerating, born with money, etc.

    2. “These numbers are only possible with a far above average paying job beginning at age 22. And no student loans, car loans, or spousal debt.”

      There are lots of ways to make these numbers work, and lots of people who make them work. I graduated in 2006 with student loans, and bought a brand new car immediately (in hindsight not the wisest choice). I started out making $40k a year and with regular raises I hit the 6-figure salary mark just last month. My wife makes much less. We both make good salaries, but not “far above average”. However, our net worth is nearly double the upper end of the range for our age. How? By living fairly modestly (having a good sense of what does and doesn’t add value to our lives), spending well below our means, saving and investing constantly, including all sorts of unusual investments, and most importantly, giving generously out of a recognition that we have been blessed with abundance.

  225. @sarah

    To your 401k question, if you include contribute anything to a retirement plan (just to get employee match) as you suggest, and make good money, you will be limited and usually not allowed to take any deductions for a traditional ira (no benefit) and be disallowed from contributing to a roth. Therefore your better off maxing your 401k if employee matches. Mine doesn’t, so I max out ira for wife and myself and invest myself.

  226. Hey Jim Morrison, (nice name by the way!)

    Don’t be a hater! People read these blogs to learn not put people down! Perhaps maybe learning something will help you increase your net worth! Putting people down for achieving financial independence early is beyond stupid! Grow the hell up!

    People are strange! (get it?)

  227. Thank you for the pointer about Personal Capital. It is a great site and app, too.

    We did the fee analysis and were surprised at how much it came out to be. I think this single change could bring retirement in closer by one year. I had been lazy about tracking these fees, and that was an expensive mistake.

  228. James Morrison

    Here is a statistic for you kids . . .

    I would say 80-90% of you are LYING!! The author included.

    Now if even half of these are true then it was CLEARLY a case of “mommy and daddy are rich and gave me everything.”

    DON’T KEEP LYING TO YOURSELVES!!

    I have multiple friends whose families have net worth in the millions and they have good jobs right out of college and aren’t even CLOSE to these numbers.

    It seems like you just made this up to make yourself feel better. I would highly doubt if you are making that much you would even bother to write an article like this. . .

    This is obvious. . .

    You people are in reality, just trying to make yourselves feel better.

    It’s true, really reality check yourselves and maybe you’ll see that living in a fantasy world is NOT the same as a basis in reality.

    Trust me, and I am in the top end of your “average.”

    BUT I HAD ZERO HELP FROM FAMILY ZERO!!!

    NO ONE HERE CAN SAY THE SAME!!!

    1. Thanks for your kind comment.

      Can you share where your anger is coming from, even as you say “I am in the top end of your average”? Are you saying that it’s OK for you to be in the range, but not everyone else? If so, why do you think you are more special?

      There’s a lot more money out there than people think. People are just practicing the Stealth Wealth Movement (link).

      1. James Morrison

        Sarcasm noted, thanks for trying to “act like the bigger person” by deflecting the negativity with a “positive” comment, textbook psychology.

        I am just saying most of these posters are lying about their TRUE LIQUID net worth, home equity is not stable as we all have seen from the last decade and the same is true for stocks. But of course this is common knowledge for all of you “20s millionaires.”

        ETFs, mutual funds, bonds and other supposedly “stable” investments are at an all time low return, and unless you have at least a cumulative 1 million in one of these type of accounts accounts, after taxes, you make little to no meaningful money. (Still better then nothing.)

        I am just saying that if even half of these stories are true there was OBVIOUSLY A HELP FROM THE PARENTAL SIDE OF THEIR LIFE and I would guess that zero to no one came from “nothing.” Yet everyone of these “success” stories, no true logistics are mentioned, just random numbers.

        If these stories are indeed accurate then your “net worth of the above average person” should read “the net worth of daddy and mommies money helped me.”

        As I stated previously, all of my friends whose parents I would consider “well off,” aka 2+ million in worth still graduate with debt, even if it is just a little bit, and MOST of them immediately continue the lifestyle their parents success afforded them their entire lives, meaning your “goals” are pretty much unreachable unless you started out with a substantial nest egg right out of college and forgo having children until your 30s or later.

        I was looking for a real article with some depth and strategy and instead I find a generic “shift your assets from A>B>C (early in life) to C>B>A (late in life).

        This just feels like a jack off thread where people can come to sniff their own excrement and try and make others, who might actually be looking for some real guidance, feel bad.

        Articles like these are pretty worthless, and I would have not been angered at all if I was not just looking for something you can learn from common sense.

        Like I said, the fact that you still try and maintain an active posting thread in such a retarded article I would guess that your TRUE net worth isn’t even over 200k and your age is much older then you imply.

        If I am wrong then go ahead and feel good about yourself, but I seriously doubt your current job writing “feel good about lying to yourself” threads pays the bills, let alone allowing you to build any kind of meaningful wealth.

        1. Can you share with us where your anger is coming from? I’m sincerely curious as to how this post is making you so upset. Perhaps you’d like to share your story in a guest post (minus the cuss words).

          If it makes you happy if I say what my true net worth isn’t even close to 200K, and I’m older, then that’s fine. But please, tell me where all the angst is coming from.

          I think you’ll enjoy this post, “How To Build Passive Income For Financial Independence” (link)

          You’ll also like this post, “How Does It Feel To Be Financially Independent?” (link)

          I’d love to hear your perspective in a comment from each specific post.

      2. Weird how this guy is in your net worth range, yet is so upset Sam. Must be some 20-something year old who is really insecure with his life.

        James, and what’s wrong with parental help? You can’t fight reality. If you are destined to serve people who are wealthier than you, then just be comfortable with your situation in life.

        I’m 37 years old and have a net worth of $2.8 million. My parents paid for my public school college. The rest, I made myself.

    2. Hey, I am 34 and have a net worth of 8.2mm, not sure what makes you so skeptical of people on here. It’s nice to have a forum to share this information anonymously since it’s such a taboo subject in real life. Good luck and stay positive!

  229. Why are you maxing out your 401(k)? It seems like quite a bit of money to put in a set plan designated by your company. Especially when you will be unable to use it until you retire. Wouldn’t it be better to contribute up to the matching maximum and put the rest , up to10% of salary, into a roth or traditional ira?

    I’m 23 paid for college through federal loans and a moderate college fund. Still have student loans of about 20k but the rates are so low its not worth it to pay them off in full. Net worth is about 10k and I’ve been working almost a year. Half is in cash and half is in index funds and retirement accounts. Most of my money goes to rent living in a large city but there isn’t a way around that. Buying is actually more expensive than here once you consider interest, hoa fees, insurance, maintenance.

    1. There are ways to access your 401k before retirement age penalty free if necessary. Look into rule 72(t) distributions. You can also avoid penalties if you retire at 55 (rule of 55). Both of these strategies involve strict restrictions. Consult your financial advisor.

  230. This is a great site.
    I’m a 50 year old, recent divorcee, who is a low wage earner to an ex who is a high wage earner.

    Even after the divorce settlement, I am way behind, especially since I was out of the work force for almost 10 years; and am basically starting my career over.

    At least this gives me a starting point to gauge my progress.

    Thanks,

  231. Interesting website. Good to hear where people stand.
    Im 24, currently around 100k net worth all in cash besides mode of transportation (paid for)
    no debts whatsoever, looking to put some money in an index fund. thinking vangaurd.
    Any suggestions for investments to offset inflation?

  232. I love places like this, and the comments that come in. People love to brag and spin tall tales in the comment sections. My fav might be the first guy (Jim?) This guy goes on about his millions, but writes like a 3rd grade dropout. LOL.

  233. George Goetz

    I would not count home equity as part of net worth unless it is rental property that generates an income.

  234. This is sort of a funny article in my eyes. There are so many variables. 1. How many 26, 27 year olds are maxing out their 401K’s when they have Student Loans, Rent or a mortgage to pay, and then factor in babies? None that I know of. I am 35 and am STILL unable to max my 401k.

    Also, the chart on homeownership and equity is laughable. Has the author not seen the housing market decline? My house which I bought for 250k in 2007, now 7 years later it worth a Paltry 200k. And those numbers dont add up. I refinanced once and I still owe 240k.

    I have a college degree, never been unemployed, and neither has my wife, who has 2 Masters Degrees. Low end on home equity is in the negatives. High end equity right now would maybe be your low end numbers. This is at least with what I see from myself, and my 35 year old friends. Unless you want to factor the one friend who is a 1%’er. Then yes, your assumptions would be right, except that at 35, he is worth $20 Million.

    1. Maybe we just have different friends? I would say 80% of the 26-27 year olds I knew growing up and those I know today are maxing out their 401k.

      I am also well aware of a very large nationwide housing recovery since 2012.

      Where do you live and how much do you and your wife make?

    2. My 401k has been maxed out since I got my first serious job at 19. I’m now 44 and I have $677k in my 401k.

  235. Very well written paper with solid math & statistics. Thanks for posting it. I will be sending this on to many others…

  236. My main problem with this is the assumption of no student loan debt for the “above average” person. This seems more like the “had rich parents” person. I had a half tuition scholarship and worked part-time throughout college. However, my part-time wages only covered my housing and food – and that was a huge stretch that included additional money saved up over summers and in high school. Parents also contributed a lot towards college, but I graduated with around $35,000 in student loans. Add my car loan on top of that, and my net worth after graduating started out at a little below -40,000. I would guess that this is fairly normal.

    Of course, there are other variables at play. Cost of living in the city where you attended college, for one thing, as well as whether or not you attended a state school or a private university. However, even for the above average person, I don’t think starting out at 0 net worth is average.

  237. Sam, glad I found your site. I did a google search for “45 year old average net worth”. I get kind of depressed reading some of the posts above for someone my age (45). I only make 100K, sometimes a bit more with bonuses. I’m married with a kid and we only have one income now. I am on track only because I’ve inherited some money.

    Retirement accounts $620K, Cash and stocks $259K, Real Estate $570K equity. That puts my net worth about $1.4M

    I’ve been using SigFig and Mint, but am interested in Personal Capital. I will give that a try.

    Thanks!

    1. Hi J,

      $1.4 million is nothing to scoff at at all! For someone 45, my chart is around $900,000 for the above average person’s net worth. How is it that you are depressed?

      Sam

  238. hi guys, glad i found this website.

    i am like reading others experiences especially ones which show me where i am behind. i need to up my savings after putting 105k in an investment in 2012. though i have started maxing out my 401k recently i also am avid real-estate investor and feel like this is where my wealth will really stand out. i have an estimated 360k in equity over two properties which net about 40k in income. i think i can improve the performance to get that number up substantially. i am hoping to surpass my income with passive income in 5 yrs.

    1. I was going to ask the same thing. Almost all my net worth is tied to my business, which I know is a little too risky, but it is what it took to build a multi-million $ company with very little debt.

      Now at 38, I am trying to diversify with real-estate and savings.

  239. Reading all the comments of all these rich people is really depressing. I am 28 years old and am in a transition phase of my life. I am bringing in about $2200/month in unemployment/rental income yet have a mortgage that is a couple hundred dollars shy of that. I’m hoping to find steady employment soon to get back on track and not fall into foreclosure. I started working at 23 and my net worth is currently around $180K. I have about $100K in retirement and investments, $20K in savings, and about $60K in home equity. I thought I was doing pretty well but some people my age already have 2-3 times this amount saved. That’s amazing. I initially was very bullish about the stock market in 2009; however, after being up about 30% in one year, I got very shy and pulled almost everything out. I did but a house but after a year it is only up about 5% from what I bought it for. Definitely an economically challenging time for me but I hope to find the light soon and start saving again. Good luck to everyone!

  240. 29 yo, just stumbled on your website. This is awesome! I rarely find people to openly discuss finances with in my friends/co-workers.

    Have about $90k in 401k (started maxing it out 3 years ago), 110k in cash + stocks (mostly cash) and 125k in home equity. So I would say I’m on track with a net worth of $325k. Got married 3 years ago and wife and I maintain separate finances. She has about 200k in cash & $70k in 401k (32yo) so nw of about 270k. I’m encouraging her to move more of her cash into inflation proof investments like index funds/ETFs but havent had much luck so far.

    I’m so excited to discover this website that I think its blocking me for having too many comments under moderation ;)

  241. Very nice website, I on above average on all the categories except the pre-tax 401k, me and my wife started late on 401k savings.

    I’m 39 and my wife is 34 and our combined 401k is just over 450k (250 for me), our savings + investment (stocks) is 560k. Total net worth is 3.5M, plus 450k debt (properties). Our income on 2013 was just over 500k (still crunching final # for 2013 tax). Both of us have full time jobs with a online business.

    My experience is setting a realistic short term goals and long term goals. And when if I met my ST goals within certain time period, I increased my next set of ST goals.

    I use mint.com to monitor all my financial data and watch my budget and cash flow.

    How is mint.com compared to Personal Capital?

    My goal is to have net worth of 10MM at the age 50.

    1. Mint is good for basic budgeting. Personal Capital is good for cash flow analysis and portfolio analysis (investing). I’d give Personal Capital a shot and at least run your investment portfolios through its free Investment Checkup feature.

      A $10 million net worth would be great and a worthwhile goal. You can earn $300,000 a year from interest alone and live a pretty good life. Good luck to you!

  242. Very cool website. I’m thinking of checking out Personal Capital, just want to make sure its safe!

    I’m in the above average pool. I own a business, eventually want to be able to live off passive income, don’t think I’m too far off, but right now not trying to really grow business much, more concerned with quality of life. Right now I’m single and 34. Cash of about $90,000. IRA and brokerage accounts of $115,000. Also have 3 investment properties, where I generate about $12,000 a year in passive income (while leaving plenty for repairs and other expenses). Have a primary residence with worth about $225,000, with a mortgage of $160,000. I have no CC or auto debt. Any ideas on how to get more passive income? I like real estate but looking for other options also.

    1. Welcome to my website! Don’t forget to subscribe.

      Personal Capital is safe. The CTO founded the encryption technology used by many of the big banks online now. After 1.5 years using the free Dashboard, I decided to take a part-time consulting job there for 3 months in 2014. I’ve met over 50 people there and talk to the CEO every week.

      The other way for passive income is simply dividend stocks or munis. Just got to pick the ones appropriate for your risk tolerance.

      Sam

  243. Man, after reading all this I feel poor. I’m 31, and have been working for 8.5 years. My salary as an engineer was low for several years which finally drove me to get another job and move from my hometown. I earned $92k last year, which is pretty good for the area of the county I live in.

    I have $30k in checking, $86k in 401k (I save 15% and get a company match of 4.5%), I have about $18k in home equity on my $158k house which is financed at 4%. I have three several year old vehicles. I do owe $3k on one but the interest rate is 1.99% and I owe $12k in student loans but the interest rate is 1.625%. Any time I can borrow at less than inflation I’m going to do it.

    I recently got married after a very long engagement. My wife does not work and probably never will. I think this is a huge opportunity cost but health issues prohibit her from working.

    Being married has changed my retirement strategy 180 degrees; before I was plowing all my money into tax deferred accounts, but now our marginal rate is 15% so I am going to switch contributions to my Roth 401k.

    We don’t have big expectations – if I live in this house forever I don’t really care. If I never drive a new car, I don’t care. If in order to retire I have to sell this house and buy a decent mobile home out in the country, I don’t really care. What I am most worried about is what will happen with Medicare or how to pay for health insurance if I retire before 65. It’s worrisome so much that I am considering trying to get a Federal civil service job because they still offer retiree health benefits.

  244. I am 33 years old. I’ve working at Samsung for 9yrs so far. My cash net worth is $6.6M (USD) and $245,000 in Euros since I travel a lot. I don’t have 401K but I do have a Swiss bank account. I usually keep $2.4 Million dollar in my checking account (Capital One) My annual salary is around$546,000 after taxes. My goal is to save at least $56M until I became age of 65. I still feel like I am making less money than most of people, cause Most of my colleague saved more than $35M (USD) not include their property just pure cash.

        1. I’m the CFO of a 1.7 billion revenue consumer product company. He’s trolling. Not even our senior executives come close to that $. Margins are too low to afford that kinda money.

    1. You are a douchebag for thinking you are making a lot less than most people! are you so self-centered to not look around the world and see how people struggle day to day just to have a decent meal on their table?!?
      Your words will become your punishment… be humble you idiot!

  245. I am 44. I never know how I am doing so this is great site. I have 260 in 401k, 190 in ira, 800 + equity in my home. 115 in money market saving. Make 150,000 a year and will have a pension worth 60% of my salary at age 55. How am I doing?

  246. Enjoyed the article and will definitely explore your site. I’d like to share my experience with your readers esp the younger guys and gals.
    The thing is you can turn from a under achiever to an over achiever very quickly. In 1999 (age 39, 2 small kids) my total savings was 99K (I paid off my house by 2000). After that my net worth went parabolic. In spite of 2 major bear markets as on this date (1/2014, age 54) my liquid savings are $4.6 million. I am still working (good middle management job), but more out of interest than necessity. I credit my success to the principles of value investing. Its not so much how much you earn but how you save and invest.

  247. snarkfinance

    I know i am late, late, late in the game for commenting on this post… whatever. I am proud of my net worth and although I refuse to write specifically about it on my site, I will share ballpark figures here in the spirit of this discussion. I have been working since 2008 and had a starting salary of around $60K with $30K+ in student loan debt. Roughly five years later I have a net worth over $300K, and now make around $100K. I have lived in southern Connecticut, NYC, and Boston so all high expense areas. Strictly speaking, my net worth has climbed by over $330K in five years or around $66K per year. I am very proud of this, as at the current rate I am on track to being a millionaire in my mid-30s having never made significant income. I have still traveled, I compete nationally in snowboarding which is not an inexpensive sport, I own a 73-inch TV and a 2 year old car, and eat out once a week on average. When people state they can’t save significant amounts of money I am always baffled; when people judge my relatively frugal lifestyle I tell them their issue with it is their problem only–not mine. The benifits of my lifestyle and focused efforts on lifestyle design rather than career are bare facts, there is really no truely valid argument against them. I am shooting for a retirement (defined as not needing to work full time… I think I will always work less i lose my mind) at around my mid-30s. In all, I feel I am proof that it is possible to have a high net worth on a “modest” income (at least for my area).

  248. Joda_Pakafan

    Based on my proprietary data, the average 30 year old who is “slightly above average” has a minimum net worth of 2.1 million dollars, and by 50 has a minimum net worth of 13.8 million. The “slightly above average” retiree at 65 should have, on my metrics, a minimum net worth of 28.7 million (each spouse of course if married couple).

    I’d share the data but it is proprietary. Are my numbers too high? or are yours too conservative? Even with a 2% return a year, 10 million dollars brings in 200K, so for those saying it is hard to save I say “DO THE MATHS” – 200K a year i passive income is not chicken food!

    have a blessed day y’all!

  249. HI:

    I seem to be the only person here over 65. I have solidly double your high end net worth for a 65 year old and I intend to continue working ’til 73. It’s the new reality and headed up. In addition, there is a pension. I always made very good money, but not stupendous amounts.

    The secret is starting early and just keep on going. You need a good partner to ride the River of Life. Under 65 you should never miss a payment to your retirment plans and never take an early withdrawal or loan. Live for what makes you happy, not to compete with the neighbors. They probably have higher mortgages than you realize anyhow. The supposedly “richest” couple I knew lived high on the hog right up to their bankruptcy.

    Spend what you can actually afford – whether it’s $1 or $1 million. Don’t lie to yourself about what you have and start saving for your kids as soon as they are born. They’re going to need help more than ever. You can’t put all your eggs in one basket and do the math to see that good steady returns on investment are the best road to reasonable comfort.

    Money will not make you happy, but not having enough money to get through old age can really ruin your life and make you dependent. I’ve seen it and you don’t want it. So act young, live below your means and plan for the seemingly distant future. It’s here in a finger snap. Good Luck!

  250. Okay. I’m not on the above average track, which is perturbing, because I consider myself above average.

    36 years old. 120K in 401K, 50K in Roth IRA, 77K in personal brokerage account. Negligible student loan debt at 2%. No other debt. Person net worth is therefore $247K.

    Going through a year and a half of unemployment in 2009/2010 did not help. But that was mostly my fault. I was burnt out from being an office slave Now, I have an infant and a wife and a couple of step kids and that has been OUTRAGIOUSLY expensive.

    Trust me, if your be all end all is accumulating assets, do not, I repeat, DO NOT get married and have kids. Especially the later. But it is true that I would not change anything. But still. If I were not a serious overachiever I would be poverty stricken at this point and eligible for Obamaphone, Obamabucks, Obamacare, Obamafood, Obamahouse, etc.

      1. But I am a man, Samurai, and I already have a wife. See above. My point is that I would have an extra 100K over the past three years alone if I had not gotten married and had a baby. But I had to pay off wife’s post-divorce debts, pay her back due property taxes, pay for full time nanny for baby, buy a minivan, pay for the wedding and a nice ring, etc. Even the childbirth itself was 5K when it was all said and done- no gratis healthcare unless you fall into a demographic group I am not in. But her family is rich so it might all pay off financially speaking in 20 years. But I don’t count on any of that.

  251. Pretty good article. I like your assumptions here. There is one thing to consider that you have not addressed. And it’s a big one – TAXES!! You can not assign the same value to savings in an after tax account and a deferred tax account. One needs to consider the deferred tax liability that will be realized when distributions are taken from a 401k or similar plan. I personally assign a factor of 75% to my retirement savings when claculating my net worth.

  252. Turned 24 earlier this year and graduated nearly 2 years ago/in the work force for almost 2 full years. Just crossed the $100k net worth mark and it felt great (dipped below a bit last month from a little volatility, but just tipped over the scale again). The net worth scale is one I don’t mind having a very heavy number on!!

    Around 70/30 in investments/cash. Right now I’m investing a little less than normal so I can save up some cash and hopefully have some left over if I can find a good investment property in the next year. It sure feels good to start feeling a bit more relaxed about my financial future, but I definitely have a long way to go. I can’t wait to have enough property so I don’t have to work any more or find some job to just keep me occupied without working like a dog.

    Love the site, Sam. Glad to know there are others out there with similar goals and that I’m not the only one in my twenties who saves like a bear eats before winter.

  253. > I assume that the above average person buys a $250,000-$500,000 piece of property at 27.

    Sam,
    Why should one wait until 27 to purchase property? When you rent, you piss away your money with no exchange in equity. Especially out here in the bay area where rent is ridiculous, you’re pissing away money even faster by renting. The only thing I can think of is that there’s probably a bubble.

  254. 44, married with 2 kids. My wife and I have 800k in our Fidelity accounts, 400k in home equity,
    and own some farmland in Illinois worth around $250k. No debts, house nearly paid off. So our net work is currently around $1.45 million. I feel good about where we are but still find myself worrying about whether we’ll have enough to retire on. Yearly income is around 100k.

    I’m currently investing using the trendtimer.com software (which I recommend) and also subscribe to the Motley Fool stock advisor newsletter.

    1. Is this income passive or from your career? I’m going to assume it’s not passive since 800k couldn’t reasonably generate that much based on a safe withdrawal rate. Is your house your only debt? At your age, I would look into “slicing up the pie” a little and move into bonds for a more predictable and reliable income stream. If the cost of living isn’t too bad where you live, I’d say you could comfortably try to take on less hours as it is right now.

      I feel like you could definitely retire right now if you made some lifestyle changes and cut out the excess, but at any rate you are definitely well on your way and are almost there.

  255. Hi – for me – a scary site. I am not proud to say I am very different to the average poster here. I am 32 and spent the first 10 years after graduating with a degree in fine arts – then travelling and trying to be an artist whilst working part-time in a teaching job – extremely irresponsible – I know. Anyway, maybe in the last couple of months I have “woken up” to my situation. I will not make it professionally as an artist – I am now living in a country with no family whatsover, just holding down part-time casual employment teaching English as a second language – have $2000 in cash to my name and $30,000 in the equivalent (I think) of a 401k. I started to save 20%/month of an approx $40,000 salary just 2 months ago. I have a car which I bought in cash for $17,000 last year (another bad decision) and not much else. I am renting, sharing with one other which currently costs $775/month (26%) of current net salary. Just wondering if you have any advice for those completely out of the ballpark like me?

    1. You lived your life on your own terms and had experiences no dollar amount can buy. Remember that things work out in the end so keep following your gut.

  256. Interesting site.

    I agree with many people’s assessments that the equity in the home is hard to believe. Those with the bank of mom and dad are quite lucky. I go round and round with an individual I work with who tells me I am an idiot for investing in the Roth 401k (no matching) while he owns four properties, only one with a mortgage (his parents’ have a net worth in the 100’s of millions). Naturally, in the same field as me, only a few years ahead, he did not acquire these homes with our sub 100k/yr salary– he also spends 25k/yr just vacationing.

    I personally have been working for 3 years (25), never had any student debt due to scholarships and make about 75k at the moment. Bought an entry-level luxury car about 2 years ago (foolish I know) so that’s a big ding on me (owe 25k on it at a sub-inflation interest rate). Currently, I have about 80k in 401k/IRAs (about 25k is tax deferred, the rest is Roth). I own a 100k property I rent making around 3000/yr, but have close to zero equity at the moment. Not sure I am doing great, but I maxed the 401k and will max the IRA by EOY— plan on doing it again as long as I can. I also have a 12k unsecured loan with a sub-inflation interest rate. So my net worth is only 43k (feeling a bit insecure now)

    So back to original argument– am I missing these huge opportunities my well-born friend claims by dumping my money is tax-advantaged accounts? (We also both have pensions that will pay out about 60k/yr immediately after retirement (today’s dollars) which includes medical if we stick around for two decades or so.) At my current debt-to-income ratio I would never be approved for another mortgage at the moment, so I am not sure what I could do better with that 23k/yr than I already am.

    Kudos to anyone who guess what we do.

    1. Chad, the NASDAQ has gone up over 21% this year. I can guarantee your rich friends returns are no where near that, especially considering the 401k would be pretax money. Max your 401k, max your ROTH, trust me on this one.

  257. I’m 38, Married, 2 young kids, and currently the only earner in the household. I earn about 170K in base salary and and an avg 18K bonus (this year will be 36K though – which is nice but not the norm). Net worth after this year (waiting on a land sale to close) should be in the 600K range – with about $275K in 401k accounts, 92K in stock options, 25K in an emergency fund, about 160K in land sale proceeds, 12K in brokerage accounts, and probably 40K in home equity (figuring in a 6% realtor fee if we were to sell). We are hoping to retire early at 60 or so on the family farm (no land cost). Question is how best to invest the 160K? Thinking about doubling the emergency fund and investing the rest. Perhaps a rental property?

  258. Hello,

    Great site and information. I appreciate all that have contributed. It has really got me thinking. I would appreciate some advice on my current situtation, and future goals.

    I am 37 years old, and currently working as an expat overseas. I put myself through school using student loans, of which I have paid off. I do not have any debt right now, but also do not have any investments or real estate. I have worked hard to save around 600K, in a savings account. I regret not taking advantage of 401Ks and other investment opportunities over the years, but am hoping that it is not too late. It seems a waste that my money sits in a savings account, earning little to no interest.

    What types of investments are avaialble for someone in my position, and what do you recommend? Maybe I need to hire someone to help me invest and diversify.

    Anyway, great information and thanks for your comments.

    1. Scott, $600K in a savings account is a great nut by 37! I would diversify into real estate and dividend paying stocks. Theoretically, your $600K invested in a diversified dividend portfolio could spit out $18,000-$22,000 a year in income. Most importantly, do everything to protect your financial nut! I’d sign up for a free account with Personal Capital in order to manage your money and see where it’s going.

      Here are some other posts you might like:

      https://www.financialsamurai.com/2013/02/11/recommended-net-worth-allocation-mix-by-age-and-work-experience/
      https://www.financialsamurai.com/2013/01/28/the-proper-asset-allocation-of-stocks-and-bonds-by-age/

      I do financial consulting btw if you would like a 1X1 session. Click the link to find out more.

      Cheers,

      Sam

  259. Thank you again!
    I just found your site earlier today and my eyes are so sore from reading, I have not read an article I have not enjoyed. Most of my peeps are married with kids and are not on board with any freedom 45 plans so they don’t read PF blogs like I do. The conversations here are so informative. I’m glad your analysis is on the individual level and I’m also grateful you detailed your definition of an above average person. I am an “aap” and despite one costly divorce I am very happy to learn I’m on par with your net worth calculation for my age!
    Our calculations/tax laws are slightly different here in Canada, however owing a condo in a big city like Toronto has good rental potential like SF. So thank you again Sam, your hard work here is appreciated!

  260. Hi there, I read almost every single entry here! I am happy that many are doing so great here, and those that are just starting you guys have the right tools to get where you need to be in the coming decades.

    Currently I have a lot of cash assets and not enough investments.

    I am 29 years old now with a 789 credit score. No debt(always pay credit card in full every month). No car loans, no home loans.

    Checking- $5,375.00
    High yield Savings/CDs- $171,818
    roth IRA- $8,133
    Vanguard Brokerage account- $85,863
    Total- $271,189

    I also own a car, motorcycle, several high valued items. That if I sold I would get around 20k to 25k. But I do not account for these things since they are more depreciating assets and or can’t be liquidated quickly or instantly.

    For me overall, I never started off making tons of money, I have no college degree. I made do with what I had and focused on saving and not trying to keep up with my peers. I did not start of with a lot of money from parents, at age 19 I had about 2000 dollars to my name and then joined the Army as a Enlisted soldier. I left the Army in 2011 and now I am currently working a contract overseas. Last year was my highest earning year in my life, about 160k after taxes. This year will be a less since I think I won’t be getting extra over time and bonuses. I expect still bring in about 130k to 140k.

    The reason I have been able to save a lot is, I have always been very frugal. I do not buy things I don’t need. I keep my expenses extremely low. Currently I save most months around 90 percent or more of my income. Since I am overseas, my company provides the housing and 3 meals per day. The only thing I pay for things that I need personally, clothes, personal hygiene items, other food items that I prefer to eat and buy out of pocket for those things. When I was in the Army, only making around 14k my first year, most of my peers would go out every weekend and blow their entire pay checks on partying and alcohol. I always kept it low key and rather stay back or do things that wern’t to expensive or I enjoyed. Its all about you, your expenses and what you choose to do with it. I am also single so that helps. After 8 years in the Army I had about 90k saved up, most my peers always lived pay check to pay check. After coming back from a year in Iraq most soldiers would go out and buy that new truck they always wanted or something. I personally didn’t care for the flashy things and still don’t.

    Last year I still took two nice vacations. Did a scuba diving trip. Spent at least 5k on each trip, stayed in nice hotels and ate good food on a exotic island. So when I want to do things I do them, but I am not wasteful, I pick and choose, if I got a good hobby that I like I’ll set aside some money for it. But sure I could be like peers who have condos in SF paying 4k or more on rent or mortgages, have a 1000 dollar payment on a expensive sports car and live the “high life” in a big city sure adds up. I just choose not too. I am happy with my 13 year honda accord for now:) knock on wood its never broke down on me.

    Also I tend to take advantage of credit card offers for the points and airline miles. I have also never paid a dime in interest. I have gotten 2 iphones from points over the years, gift certificates for clothing stores, airline tickets. I love taking advantage of whats basically free money to me for things that I would buy anyway.

    I would appreciate any advice. I really have a goal of about 3 million by the time I am 50 to 55. Sounds doable if I play my cards right. I am looking to open another roth or traditional IRA too. When it comes to investing I do not know much, I have my vanguard account, but its pretty much setup in target funds, index funds, mutual funds that sort of thing. I do not have the skills or knowledge to actively be managing it. So for now its just been on “auto pilot”.

    1. Hi Mate,

      You are doing great! $160K after taxes is a very handsome income and you saving 90% of your income is incredible. At 29, I’d like to see no more than 30% of your net worth in high yield savings/CDs, especially with your income.

      In order to get to $3 million by 50-55, you need to run scenario analysis. With your assets and your mission, I’d sign up with Personal Capital and link up your accounts so you can get a holistic view of your net worth. Then I’d click the investment tab on the top right and play with the different return and savings scenarios to see how you’ll do. The program is free and easy to use.

      Let me know how your assumptions look after you’ve run the scenarios.

      Best,

      Sam

      1. I will definitely get started on that with Personal Capital. Thanks for the quick reply, I see that your very active on your blog replying to most posters.

        The extra cash flow was a shock to me. I went from making 35k to 45k a year in the Army to mid 6 figures. I definitely need start investing more of my income into my investment accounts and other things.

        I will continue to read all your other investment postings as well. I am still learning a lot, as for my Vanguard account, its been pretty much running on “auto pilot”. Been sticking to mostly index funds, mutual funds and a few stocks of my liking.

  261. Like the articles on this site – including the opinionated stuff – while my gut feel doesn’t match your estimates, I don’t have the financial brain-muscle to argue :) I happened on this site because I was refinancing my 5/1 ARM to a 30-yr fixed and was not sure if I was making the right decision. While I may not live in this house for more than 10-12 yrs, I hope to keep it as a rental after I move out, hence the 30-yr fixed. Thought I’d add my data-point to the set.

    My stats:
    Age 38 : Pre-tax savings – 200K, Post-tax – 100K, Real estate equity – ~600K

    Living in CA explains the above skew :) Though I’m a bit concerned about it, given our earthquakes !

    Anyway, thanks for the article – was getting tired of ‘average numbers’ since they seemed quite unrealistic for me (living in place like CA Bay area – can’t rely on national averages for anything !)

    1. Hi SP,

      Welcome to my site! Hope you stay on and share your thoughts on future posts.

      Your stats look pretty good to me. I recommend signing up with Personal Capital with that kind of money. It’s free and helps you keep track of everything in one place. I’d run your portfolios through their Investment tab which highlights how much in fees you probably had no idea you are paying. I ran mine through the 401k Fee Analyzer and found I was paying $1,700 a year! I signed up in 2012 and it has been awesome, and a relief in retirement as I go about doing my own stuff.

      Don’t be concerned about earthquakes. Be concerned about annual storms our brothers face on the East Coast!

      Best,

      Sam

  262. Hi Sam,

    I agree with others who have stated this is a great site – I’ve been reading PF blogs for about a year now and was looking for more in depth articles instead of the surface-level stuff that PF bloggers seem to duplicate over time. You have really unique articles in comparison and for that I’m glad I stumbled across Financial Samurai!

    I, too, just wanted to share my personal net worth because I’ve been so interested in reading about others. Fortunately, my parents were able to cover 100% of my college expenses that weren’t covered by scholarship dollars. This was all a result of my father’s hard work in a lucrative career and my mother’s frugal management of our household. It is a gift that I vow to return to my future children one day. That being said, I have no debt, which I understand is uncommon at 23.

    I have been working for two years as a communications/organizational change contractor at a large insurance corporation, grossing 45K per year. I currently have 6.8K in my 401K, 4.6K in a Roth IRA, and 5.4K in a high-yield savings account. It looks like my savings are matching up with your chart, however, I have flip flopped the pre-tax and post-tax savings goals. (The reason being that I’m saving up for a property down payment.) Regardless, I will have a net worth of 20K in July, a month shy of my 24th birthday. Keep in mind, this is without debt and after two years of working, so I don’t know if I can keep up with your chart goals next year without reducing my lifestyle or getting a promotion/pay increase (working on it though!)

    1. Hi G$, welcome to my site. That’s great you graduated debt free. Don’t waste the golden opportunity to pursue your dreams without an anchor!

      I’m glad you’re focusing on buying a property. I recommend you read the the following two articles:

      https://www.financialsamurai.com/2013/01/04/the-real-estate-investors-mindset/

      https://www.financialsamurai.com/2013/02/11/recommended-net-worth-allocation-mix-by-age-and-work-experience/

      Good luck and hope to hear from you more on my site.

      Best,

      Sam

  263. What a great site, great niche. Nothing like this online. Well done. I am always trying to find out how I’m doing. I’m 34 years age. I got 245,000 in cash. I own one rental that I owe 379,000 that is worth 375,000. I’m renting at a loss of 500 a month based on me not paying any property tax for the first 5 years. Got a penalty on back tax that runs out next year of 315.00 a month. Once thats paid the rent i get will cover the mortage. Always wondering if I should bail or hang on. I rent with my girlfriend right now . Income bounces from year to year 80,000 grand to pre tax 280,000 ( small business owner) have no debt, own my car out right and have no money invested in any stocks, retirement. This year I will make 290,000 pre tax. Have little baby on the way. Any advice would be awesome. As I have no idea.

    1. Hi James,

      Nice to hear from you! Did you find my site on Google? Great job accumulating a nice chunk of cash. Is it possible for you and the GF to move into our rental instead? If not, that’s fine. I would try and hold on to the rental as long as possible, especially if it no longer bleeds cash. Things are getting better.

      I would open up a SEP 401k or IRA to shelter some cash and built that tax-free retirement nut. You can potentially save and shelter up to 50K a year tax free. I’d also sign up with Personal Capital, a free wealth management tool that will help you track your net worth and help keep you on financial track. It’s a great way to stay on top of your finances.

      Cheers,

      Sam

  264. Drinking wine at home this nice Friday afternoon, as I work 4 hours on Friday and 9 hours the other 4. Came across your website and it seems like interesting, real world practical number crunching advice.

    I’m 48 years old, married with two kids – 9 an 13. Wife works too. Combined annual family income is $200K. Zero debt and we buy everything in cash, although we use credit card for the gift points.

    My assets are: $250K in 529 plan for kids, $650K home, $60K cash, $80K Roth, $210K tax free investments, $140K 401 plan, $200K 457 plan. Net worth is $690K excluding the 529 plan as that will pay for 8 years of college expenses in CA for the kids, and excluding the house as it does not give me returns.

    My yearly savings and net worth total returns are estimated at $100K per year. I plan to retire at 62 latest. Will have pension of $90K annually. I estimate I will have net worth at least $2 million by 62.

    How am I doing? Any advice?

  265. Wow all I have is a 52000/ year job and live with my parents, have one daughter and just paid 7000 to a divorce lawyer and have no savings. My ex husband got the house in the divorce. I must really be behind in saving. I’m 30 years old.

  266. I agree that your numbers especially for pre-30 year olds are next to impossible. In order to generate $17500 in home equity within the first two years of ownership (with no appreciation and assuming a 30 year fixed at 3.25%), the original mortgage would have to be $400,000. This is a long ways off of $200-250K which you assumed. For a 30 year old to afford that size mortgage, fully fund a 401K, save ~$10,000 in after tax dollars, and actually live, they would have to earn at least $100,000. I’m not saying it is impossible, but few 30 year olds make that much, and many that do live in places where they couldn’t buy a garage for $400K. I’m looking at it from a single person’s perspective so a couple with dual incomes would be a different story.

  267. I just turned 40. My Excel sheet today says my net worth is $644,00, which is almost exactly what is estimated in the chart above. So there’s one data point.

  268. 35 yo single male, annual income $160K (140K salary, 20K stock dividends), have $410K in stocks, $10K in savings, $240K in retirement accounts, so I’m in good shape based on your table. Targeting net worth growth per year of $100K (assumes conservative 3% asset appreciation), would like to retire with $2 million by 45. For better or worse I’ve always been 95%+ long equities as I just can’t stomach having a lot of cash sitting in the bank earning 0.1% interest. I didn’t crack the $100K net worth mark until I was 30, but thankfully b/t raises, prudent investing (I stick mostly to large cap blue chips with 3.5%+ dividends) and keeping my costs in check (I pay $900/mo for a cozy 1/1 apt and drive a 10 year old car), I’ve seen nice asset growth the last few years.

    I think cost containment is a biggie, it takes a lot of discipline to not fall into the lifestyle trap when your assets increase (especially when your peers are living large), why drive a 10 year old Camry when you can easily afford a new BMW5? I have basically the same annual budget now than I did 10 years ago when my annual income was half as much, and is a big reason why I’ve been able to rapidly grow assets the last few years as I’ve been able to put that excess income into investments.

    The one asset class I’m light on in Real Estate, I’m impressed how many of you have gotten into RE at such an early age, obviously this is a place where you can make a lot of money since RE is a leveraged asset so if prices go up, your returns are enormous if u only put 20% down. I’m a content renter, and since I’m single I don’t need much space, but I’m considering buying a single family house and renting it out (looking at Las Vegas), if anyone can point me to a website listing all the things first time buyers/landlords should be focusing on I’d really appreciate it.

    1. You are crushing it! Nice job! Here’s a post I wrote that you’ll like: Recommended Net Worth Allocation By Age And Work Experience with some further links to relevant articles on real estate.

      Were you 90%+ in equities during the 2008-2010 time period? If so, did you simply hang on and buy more? I started this site then as a way to deal with the economic crisis.

      I also recommend you sign up with Personal Capital to get a good holistic view on your money with your kind of assets. Check out my overview post here.

      Good luck and welcome to my site!

      Best,

      Sam

      1. Thanks for the real estate links, I’ll definitely check out Personal Capital, looks great, much more elegant solution to tracking my various accounts than doing it all in Excel.

        Yeah I was full throttle in equities when the market collapsed so didn’t have much free capital to buy when it hit bottom, but I held on to my positions and plowed almost every excess dollar I’ve made in the market since then.

        I really didn’t get serious about my finances until my late 20s (didn’t max out my 401K until I was 29), hopefully more 20-somethings (or even teens) find this site and heed your advice, since the earlier you focus on money, the sooner you’ll be able to hit your retirement bogey.

        Keep up the good work!

        1. No prob. I did all my financial tracking through an excel spreadsheet as well until I found Personal Capital. Free and easy to use and I met up with several of them here in SF. They’ve got new product rollout a this year too so I’m excited.

  269. Anyone who thinks these numbers are unrealistic is simply doing it wrong. I started out making 43k and now make mid 50’s, just turned 30 years old a week ago and have a networth of $375k and should pay off my house by the end of next year.

    The only thing holding you back… is you. The key to having “above average” networth or savings is controlling and prioritizing your spending. I don’t live like a miser, I travel abroad every year for several weeks, I kayak and go rafting, mountain bike, go backpacking. But I stay in hostels, I ALWAYS buy used equipment at a fraction of the cost and most of make a profit when I sell it. The reason more people don’t have high networths is because they don’t want to cut out all the “little crap” they spend money on: coffee in the morning, going out to lunch, going out to dinner, going to a movie, buying that thing you will never use, letting your food spoil, having to pay interest on your credit card… congrats, there goes your earnings.

    Your attitude has a lot to do with being above or below average. Below average people make excuses for their results, above average people look for solutions. Which are you?

  270. I’m not really sure where all the people on this site come from. My husband and I make a combine income of about 60k. We just bought a house with nothing down thanks to the VA loan. Because the government sells a pack of lies to the kids in the military, we have 60k in student loans. We’re lucky to pay the minimum to get the loans paid in 10 years and our mortgage. Where is everyone finding jobs where they are making 50k+ a year while under 30?!

  271. 42 years old. 12 years ago, I was a newly divorced, single mom bringing in $2000/mo, including child support. Luckily, I left the divorce with no debt other than a mortgage on a starter home that I was living in. The mortgage was $535/mo, which was cheaper than rent on a small apartment. I was pretty much starting over – the only difference was that I was able to build equity in a home (we only put $8000 down on it, so it didn’t have much equity at the time of the divorce) instead of paying rent. Four years later, I built a house and rented out the one I was living in. The rent on that house covered the mortgage on my new house, so out of pocket housing costs were essentially the same as it had been. Three years later, I refinanced my house, pulled out cash and bought another rental property. Four years after that, I refinanced the original house and pulled out cash to purchase another rental property. Currently, the income from the three rentals covers all four mortgages and all are on 15 year notes. So, by age 57, all will be paid off. My current net worth is $440,000. Once the properties are paid off, it will increase to $750,000 (assuming the values of the property remain at current levels). Sure, it could be less, but it could be substantially higher. I plan to continue working, though, until I hit a net worth of $1,000,000 (which shouldn’t take long since the properties will all be mortgage-free by then). Then, will quit work and live solely off of the rental income. My daughter should inherit about $1,000,000 when I die and four properties. And, I’m still working the same job I was 12 years ago. It is all about starting early, making wise decisions, and not wasting money on unnecessary items, especially late fees, bounced check fees, high credit-card interest, etc. Those can really hurt you in the long run. That $35 bounced check fee may not seem like much now, but when you look at what that $35 could have earned over the years or saved you in interest had it been applied to something else, it can be substantial.

  272. 21y, graduating from college, have a job lined up for me when I’m done. 50k salary starting, here in Canada. Should I look for rental place or should I go into real estate and buy a house. And for saving and tfsa accounts, and RRSP, what should. Be the percentage of income allocated to those areas.

  273. Absolutely right on real estate Sam. I’ve made life 10x harder for myself by not buying for one reason or another (wasn’t always a wrong decision, sometimes it wasn’t possible due to starting a business etc).

    US property looks a screaming bargain right now. All US readers should buy ASAP if they haven’t already, especially if outside of the few slightly bubbly markets (e.g. Washington, New York).

    1. Great to hear from you mate. It’s been at least a year!

      US property does look like a screaming by especially from a Londoner’s eyes. Rents have been rising strongly in my US describable cities and now prices are following suit. I’m tempted to sell one primary rental prospect to simplify my life, but should probably hold on for the next 5-10 years.

      Hope all is well!

  274. Going into college I had saved up around 15k in mutual funds from gifts and summer jobs (yard work, retail). While in school I worked part time for 12-15 $/hr for 4 years and full time during the summer. During that time I lived in an office basement owned by my dad and he didn’t charge me rent utilities or internet. School was basically free because of the work-study tax breaks at the time. I graduated in 7 years but was able to save about 30k altogether by the time I finished and bought a duplex through a short sale using an FHA loan once I was hired full-time(started at 67k). I rehabbed it and it has appreciated a lot. My net worth is now ~240k with about 2/3s in the duplex.

    I’d say that real estate is where it’s at for those that are not geniuses (like me). It’s relatively easy to understand and doesn’t take much skill. I knew nothing about fixing houses before I started but learned as I went. It’s almost as if the government knows this and wants to give the opportunity to grow wealth to the common man. 3.5% down for FHA loans make it incredibly affordable to most people with jobs. It’s also a great investment due to inflation and if you get a multi family house it’s like getting a single loan for 2 places.

    I find it hard to see how someone can have a net worth of 80k after 3 years of working. That’s saving 26k a year. I save 24k a year and am very frugal.

    1. It’s hard, but it’s doable. With the help of a rising market, things get even better. Did you enjoy school hence the 7 years? I wished I did a 5th year, but I was anxious to graduate and start a career.

  275. Hi,
    You have a great site with interesting comments!
    I just wanted to say that accruing a high net worth is definitely doable! I am a 32 y.o. female who worked making mid 30’s for 6 years in insurance after college. That whole time, my husband was “climbing” the ladder but didn’t make more than $56k when he left his job 2 years ago.
    While we were being severely undervalued ;) we were amassing rental properties (duplexes), fixing them up, flipping them and putting the money towards more. We did everything ourselves and one property at a time. We even rested for about a year before continuing. We never took a honeymoon or vacation but still managed to have a great quality of life.
    Our family, on both sides who are serious consumers of luxury goods, think we are low income because we still live in a 2bed, 1 ba house but long story short, my husband started a business (online) from home at the same time I decided to stay at home as a Mom and go to school part-time. Our net worth before the sale of his business, I know this today because we just did our financial statements to apply for the apartment building, was $1.2M.
    I am actually taking a break packing for our first vacation together since getting married 6 years ago! We are going to about 4 different golf courses and stay at some awesome (priceline purchased) hotels.
    I just want to say that it’s part luck, part visualizing and staying with your plan from day 1 but also being flexible and knowing that you are the only one who is going to look out for you because money is energy and everyone else will take it if you let them!

    Good luck to everyone out there!

  276. Hi samurai, Great site by the way just found it. Will be learning a lot.

    Im, 21 and make 30k in California been working since 15, dropped out of highschool jr yr. Bought a house at 19, (have excellent credit, down/closing cost was 3500, had 12k in the bank at the time, mortg pay 610) selling it for 60k profit. I have 2k in bank, 8k in stocks, no credit card payments, do have car payments. My plan is to buy property again, but day trade as my daily job. I will quit my job, go to online school, and get federal financial aid to pay for school and my expenses. My smal business will easily keep me at 24k a year. I learned I need a college degree if Im going to make it to that million by 30.

    My question to you samurai, is what would be a 21 year olds best move, after selling this house, to be the super above average rockstar? My plan in 2 months is take 40k and trade. Hopefully net 35% yearly on that 40k. My gains are crazy when I actually have the time to day trade, have 10% daily gains on 5k. I think thats where I should take this big lump sum i’m about to make. What do you think Samurai?

    Thanks Financial Samurai, best Believe Ill be reading every single one of these blogs. Knowing all of it is helping me to my financial future. :-)

    1. Hi Paul,

      I like your enthusiasm. Is there any chance of you going back to school to get your degree? Perhaps go part time to have a backup?

      I’ve day traded plenty of times before and if you do it long enough, I’ve found the losses even out the wins. Trading a $5,000 portfolio is different from trading a $40k portfolio due to risk loss pain.

      I’d start trading a smaller portfolio of $20,000 and see how you do for 3 months and then move on while have a steady afternoon or night job.

      Best,

      Sam

  277. These numbers seem a bit high to me. I’m 29 and make $65k in Los Angeles now. I had a net worth of NEGATIVE – $32k at 22, right out of college, and have been very frugal and diligent with my savings since then. I currently have $170k net worth, mostly in after-tax accounts (Roth IRAs, mutual funds, etc…). Living in Los Angeles makes it difficult, however I am looking at putting $100k of my savings on a down payment for a condo, as I do plan to stay here for the next 3 – 5 years. I save about 50% of my income each month… I can’t imagine how people could save more.

  278. WheredoIfitin

    I am a 58 years old PhD , married with two grown children. Retired from State Government with a pension of $ 54,000 a year with medical at age 55. Started working again 2 years ago ~ $ 75,000/yr and we bought another house (our final) for 138k which is now supposed to be valued at 165k , we owe 100k and I am making double morgage payments. No other debt except normal bills. We have about $ 180,000 in savings. Some regrets about taking on too much risk at times, and since 2008, way too little risk, with our investments “but” took care of our son and daughters educations. Always felt I could keep pulling rabbits out of my hat but lately have been nervious about a sustainable future for no other reason than that I am starting to own my age. From your perspective, how do we look financially at this point? Are there obvious things we should do to further secure our future? Thank You in advance for your response.

    1. Hi There,

      First of all, you are doing great because you have a $54,000 a year pension for life! All you got to do is take your expected life expectancy age (e.g. 85 for example), subtract from your current age of 58 = 27, multiply by $54,000 + COLA, and you’ve got your capitalized value right there. Or you can take $54,000 and divide by 3% to get $1.8 million as a rough estimate.

      To minimize regret and stay on top of your finances, I recommend you sign up with the free wealth management online tool, Personal Capital. I’ve aggregated all my accounts so I can get an idea of where my money is going and where I need to adjust my assets. Personal Capital tracks your net worth and gives you a bird’s eye view of your finances to make better decisions. The tool is already saving me over $1,000/year in portfolio fees from my 401k I had no idea I was paying thanks to its “401k Fee Analyzer” tool you can run once you’ve linked your 401k account. It’s free, secure, and easy to sign up.

      Good luck!

      Sam

  279. FinancialSamurai,

    I am a 25 year old making approximately $200k annually. Combined household this year should be ~$240k. My income has increased greatly since entering the workforce, $51k to $$57k to $88k to $135k to $200k. It looks like income will continue to increase for the next 2-3 years and will end up averaging between $250-300k annually for 5-10 years thereafter. My wife and I have a current combined net worth of just over $100k and I’m wondering what your recommendations are for investing extra cash. I’ll max my 401(k) this year and am also participating in ESPP. My wife contributes to employer match in 401(k) and has contributed to a Roth IRA for about 6 years. AGI this year will put us over the Roth IRA limit and other than our mortgage we have little debt. We just bought our first house in the DC area for about $550k and are interested in both real estate and the stock market. Thoughts on how to keep up with your “Above Average” charts and where to invest?

  280. Great post! Really enjoyed reading up on this article and the comments. Although after reading some of your personal stories and comments I feel slightly inadequate!
    I am a 24 year old living and working in Shanghai as a design instructor. This is my first full time post graduation and I make only about 30k a year from my full time position and 9k from freelance work at a publishing company. I have a total of 6,000 in savings and my student loan debt total is about 13k which is reasonable from what I hear (compared to other fashion design students).
    I do plan on going back for a business degree within the next three years.

    My parents own property both in the US, paid my first years tuition in full, and I attained scholarships which peeled of the bulk of my tuition costs.

    Just wondering what else I could do to make make a smarter investment for my future especially since I will be going back to school. Any suggestions? Especially since I am clearly on the low end of the savings guide.

    Thanks,

  281. I am a 46 y.o. married male with $236K in retirement accounts, $900K in liquid investments (extremely conservatively invested – about $250K in index funds, $250K in bond funds and $400K in moneymarkets) and $100K in illiquid private company security. I make $280 +15% bonus but I work in a volatile industry where the job is always uncertain. I pay about $2500/month in rent (houses in my neighborhood exceed $1M, and I just had my first kid, but the schools in my area are pretty crap despite the high cost of housing. I max my 401K which is 80/20 stocks to bonds, but overall I just don’t trust the market.

    Any thoughts as to how to transition to a more aggressive investment stance and whether it makes sense to buy rather than rent?

  282. This model doesn’t really work well for me. I’m a young doctor starting out in residency, I spent my whole life in school so that puts me about 250K in debt when I finished medical school last year. I’m 27, my income is 48K as a resident, no 401K or other benefits and will see very little growth over the next three years. I have a car but that’s about my only asset in value. My income strategy has been to take advantage of loan forgiveness and make minimum payments, I weighed this against making higher loan payments and living on a tight budget but really high loan payments when your pre-tax income is 1/5th of your principal debt isn’t much.

    Once I graduate my income will grow to around 300K a year, which will afford me more investment opportunities rather than merely holding down living expenses and loan payments. In the meantime, I’m probably going to cap my Roth IRA and spend the remainder on a few stocks that I find promising.

    I’ll call it the catch-up model for doctors who should have done something else with their life rather than spending 8 years accumulating debt :)

    1. Hi Mate, makes sense. This is why I provide a “years worked” column as well. With your future earnings power, you should do great provided you worked enough years. Good luck!

  283. Samurai – just found your website, very informative. Couple adds from me on your “Recommended Actions For Increasing Your Net Worth” – “Bet on Yourself” and “Be Mobile”

    Bet on Yourself – Strive and get that top MBA, or get your CFA, or whatever to propel you to the next level. Those items will yield a poor return if you dont do anything with it but if you are willing to “bet” (invest money) on yourself, you will do very well. But sounds like most of the people here are doing exactly that! My personal example – I graduated at age 29 with an MBA from a top 5 school along with an negative $50k net worth! But it doubled my comp and I took off from there, all because I bet on myself and knew I would succeed even though the near term financials were a drag.

    Be Mobile – in my opinion, if you buy a home when you are under 30 you are nuts. NOT because a house can lose value, but rather because the mentality it creates when propelling your career. Maybe you bought a place in Atlanta and no longer “look around” to other cities for job opportunities because you feel “settled”. This reluctance really limits people. My example – I lived in 4 different states during the first 7 years after undergrad because I kept looking for the next big opportunity and nothing was going to hold me back, which lead to my success today.

    So where am I today? $5mm net worth at age 38. Time of your life, huh kid? (quote from my favorite movie)

    JG

  284. Her Every Cent Counts

    This chart was quite useful, albeit a little upsetting. I didn’t have access to a 401k until two years ago at the age of 27, so I don’t have $180k in my 401k (just a measly $37k.) I do have a total of ~$180k in networth at the age of 29, plus $20k in purchased stock options (so theoretically $200k in networth.) My goal has always been $250k by 30. However, I’ve been able to do this because I rent. One thing you should take into consideration is how cheap it is to rent if you are willing to have roommates. I’ll admit it sucks from time to time, but today I pay $650 in rent and if I were to own, even a crappy studio apartment, it would be at least double that, and I’d have HOA fees and tax on top of it, plus the cost to fix everything that goes wrong. I can’t see how owning would make any sense when in my area that average cost of a one bedroom is $650,000. I’ve been toying with the idea about renting forever — more cash to invest — but at some point if I have kids I might want to own, not for financial reasons, but for stability for my kids. If you’re single and in your 20s, renting is really the best option, unless you can buy a triplex and rent out some of the units to make your lost money back.

    1. Admirable of you to rent and live with roommates to save and invest. After 3 years of working, I got sick of living with roommates and decided to buy. Fortunately, it worked out 9.5 years later and build about 450k in wealth over this time period.

      To each their own I say.

      I think the next 5-10 years is really going to be good for property owners.

      See this post. https://www.financialsamurai.com/2012/10/16/real-estate-is-my-favorite-investment-asset-class/

      Sam

  285. I’ve lived the life of the “above average” person. Started saving/investing when I was a busboy at 16 years old. Always lived below my means whether I made $22,000 a year or $200,000. Saved first, invested conservatively, but consistantly in all markets. I am now 49 and have a net worth of over 2 million. Does that make me a financial “rock star”?

  286. Thanks,

    Good article. 35 yo male: 250 in savings/cash trading account; 250 in retirement. The 250 includes sep, roth, 401k and hsa. About half of the retirement is after tax (e.g. roth, hsa).

    Tips to others: live under your means, start a biz and stay aware from greedy women!

    I disagree with your negative article about a roth….it depends on many factors, one also being your income when you retire and what the tax brackets will be at that time. I converted some money to the roth for some of the obvious reasons, but also for the less obvious: a self-directed ira that I am planning for in the future.

    Also, another creative way to save for retirement is an HSA…I don’t ever take money out of the HSA…even for medical, I am treating that as another retirement vehicle as are many:

  287. I read all these posts about high salaries/contributions to 401ks and it makes me wonder if I’m really that bad or if all you people are really that good? I graduated college in May 2011 with a degree in accounting. Took a 23k/year job and now make 31k/year same company. I have 60k in student loan debt, I lease my car, have a rent payment and contribute the minimum 6% to my 401k to get the employer match. I work some weekend jobs for a little spending money. Am I doing something wrong or am I just “average”? I feel like I will never be able to reach those numbers. Thanks and great article!

    1. Joe, you JUST started your career. The point is you have a frame of reference and a target. The beginning is ALWAYS hard. Takes a lot of sacrifice and long hours. But trust me when I tell you that if you keep it up for 10 years, you will feel incredibly free. Please spend some time to look around my site and subscribe over e-mail. I think you will be able to benefit a lot!

      1. Her Every Cent Counts

        Exactly. If you graduated in 2011 you are doing FINE! I graduated in 2005 and for the first year I made about $10k and the second year I made $25k. I’m 8 years out now and have $200k in networth. Yes, I moved jobs a few times and got significant increases in pay (make sure you do that as moving jobs helps you increase pay – staying at the same job you won’t have the same kind of lift in salary) – but it’s definitely do able and you’re well on your way to success. The only thing I’d recommend (though it’s probably too late) is not leasing your car and instead buying a car 5-6 years old that is checked out before you buy it and considering of good quality. I spent $8k on my car when I got out of college with cash up front and it was the best decision of my financial life. It’s been good to me (on it’s last legs now at 200k miles) and I never had debt to pay it off.

        1. Wow! Going from earning just $10k and 25k your first two years to building a net worth of $200k is impressive! If you haven’t written a detailed post on how you did it, I’m sure it would be a hit. Actually, I read the 4th link in your about me page. Nice work.

          I hear you on the car buying thing. In fact, I have the 1/10 rule for car buying rule I encourage everyone to follow. https://www.financialsamurai.com/2012/10/06/the-110th-rule-for-car-buying-everyone-must-follow/

        2. I previously had a 20 year old car which i drove into the ground (sold it for $1,000). It got me thru high school and college. My commute is roughly 50 miles a day and it is a great peace of mind knowing that my car is not going to fall apart on the way to work (and if it does it will be repaired at no cost). My old car was breaking down about twice a year with the average expense of $750/breakdown. The lease I have is $220/month so I’m only spending $1,100 more per year on a car (not including free oil changes and tune ups). Plus there was nothing due at signing.

  288. Wife and I just turned 34 and have 2 children living in the Pittsburgh area. We both started out making around 30k and in 12 years later now make around 65k per year each.

    We have 215k in 401k, 55k in Roth IRA, paid for house worth 160k, and 380k in cash – total assets of 810k. Currently our net worth grows by 7-10k per month depending on the stock market (about 3k-4k in cash and 4k-6k in retirement accounts).

    I believe the numbers you’ve come up with probably seem high to many people but they are very doable with the guidelines you’ve come up with. It just takes time and patience and living on less than you earn, dual income helps. Key is to get out of debt early. We had small student loans (12k) and new car loans when we graduated but paid them off quickly and then put everything against the mortgage. Once the mortgage was paid off we up’d retirement savings and now max out both roths and both 401k’s.

    Great site!

  289. Interesting site. I wish I had come across it sooner.

    I’m 44, married, 2 kids 12 and 8 yrs old. Combined net income from all sources is $270K/yr. My salary is $160K, wife’s part-time income is $60K, and we own four multi-family rental properties with good equity in them (I bought the last one in 2004) and they have appreciated significantly in value since. Net worth is approx. $1.4M.

    We plan to retire within the next 10 years. Net worth goal is $3M. Net income stream from the rental properties is currently $50,000/yr. Once the property mortgages are paid off (the plan is within 5 years), the properties will produce $100,000/yr in net income. Our 401K savings are only $250K, mostly due to the fact that we had alot of debt in our earlier years and did not contribute the maximum amount until recently.

    We are starting college savings plans for the kids (yes, it’s late), but expect that the bulk of their college will be paid for by scholarships or income from the rental properties.

    The dilemma I’m facing is whether to follow the conservative path and plow the rental property earnings into paying off the mortgages, thus increasing my rental property income, or acquiring more properties. The trade off is that managing 4 properties is pretty tough with a full-time job, and adding more would require some major life changes. I’d also be open to selling all of the rental properties and putting the equity into one much larger property that can be professionally managed for me.

    One note to the people just starting out: investment property is definately a way to go if you have the time to manage your properties effectively. That is key. If you are willing to take some risk at first and get your hands dirty, you can establish a good net worth builder with real estate.

    1. Hi Pete, welcome to Financial Samurai! How did you find me?

      It sounds like you guys are doing fine, and since you have a 10 year horizon, there is plenty of time to kick yourself in higher gear. Id consider a property manager if it’s too hard to juggle.

      I strongly recommend you visit this page to better track your finances for free. You are in the perfect scenario to take advantage.

      Good luck and hope you sign up for my e-mail feed and keep in touch!

      1. Thanks for the advice. I found you with a simple Google search for “net worth by age”.

        I’ll stop in frequently to see your updates.

  290. I think this site shows how having rich parents makes you “above average”. I graduated in when I had just turned 22 had about 40k(not unusual) in student loan debt and 20k for the car I needed to go to work. Ive paid off pretty much all the debt by 28 but thats an extra 60k plus we’ll say 10k in interest. If you dont have that when you graduate cause your rents gifted you a car and loans you can afford to max the 401/invest in house downpayment and enjoy the compounding interest.

    Im actually glad I was saddled with this debt cause otherwise I might have bought a house in 2007 (smirk that the study about houses sited prices at the top of the boom). Not that houses arent a good investment its just that many people are convinced its a sure thing no matter what its better than renting which its not.

    Also. Im not sure how a roth doesnt get mentioned here in investment vehicles. I would argue that for somebody in there 20s not getting an employer match on their 401 its a way better investment choice. Plus you can pull your initial investment without penalties if something comes up so it can be safer than stocking it in a 401 in the event of you needing emergency funds.

      1. Owning is definitely better than renting. Provided you didnt make that decision in late 2007.

        I’m solidly behind your projections in net worth maybe by $100k. Although if you take the 60k in loans and give me the interest I paid on them instead of having it leave me I’m actually not all that far behind.

  291. Thank you so much for this! I have been trying to figure out how on/off track I am for a mid-twenties person for so long. It doesn’t really mesh with me to compare myself with those I work with because most of them are in way more debt than I would tolerate and manage their finances in a way I would call irresponsible. Unfortunately I am not on track but it gives me something to work towards, and I’m only a off a bit. Roth 11K, 401k 18K, and personal savings 27K, and only 2k in debt thats interest free. Just need to beef up my retirement this year and next which was in the plans anyways and I’ll be at the 25yr old avg 1 year late not too bad I think. Again thank you for the work you put into this and I like your definition of an above average person.

  292. I am turning 35 in 2013, Graduated in 2007 with PhD, worked as post-doc for 3.5yrs, not great salary now little better but still little low around $89K. got married 2 yrs back with a kid now. Have been trying to save for the past 6 yrs with and avg of 31 k/yr. Invested all the savings (~$190K) in real estate (not rental property) in a foreign country (as i am from another country). real estate value today is close to (~$270K) now. was eligible for 401 k only for the past 2 yrs with $25K in it. With single income in the family, i have to be very disciplined to even come close to this value. I do not know how to achieve the high end, so that i can retire by 45-50, may be have another kid and move to my home land.

  293. I’m 35 and a bit shy of your above average category with a net worth of 184K. I got serious about finance when my son was born 3 years ago and have increased my net worth by 90K since then (gross combined income is $150K). My biggest concern is that I can’t afford to buy in my market (NYC) and am renting (approx. 20% of gross income). I am the chief bread winner (and mom), have a great schooling option in my neighborhood for my son, and loathe the idea of a long commute. I would appreciate your advice on my situation. I am proud of my financial turn around and am motivated to take it to the next (above average) level.

    1. Hi AF,

      Power to you for being a mom and the chief bread winner! Not easy I can imagine. The NYC market seems to be like the SF market… heating up.

      I am VERY bullish on real estate now, and we will kick ourselves for not buying today, 10 years from now. However, if you don’t have 20% for a DP and a 10% buffer after that, then I would keep on renting, saving, and investing. You don’t want the stress of putting everything you have in your house and then losing a source of income.

      Sam

  294. Colin Doyle

    Thanks for the post, FS. I worked two jobs after college, slept in living rooms, and bought one meal per day. I learned about investing on my free time, and used that to increase my net worth. For instance, I wrote an article recommending the purchase of common shares in Bank of America when it was trading for far less than it is today. My net worth exceeds the $70,000 that your table charts, but I still think your numbers are too optimistic. I don’t know many people in my age group with any net worth at all. Young people today have fallen on very hard times. The combination of high rents and low wages makes it very difficult for anyone to save or invest. I recently found a job in Lebanon that pays for my rent and offers a higher wage than I was able to earn in the US, so I have moved; but the civil war in neighboring Syria means I am taking on considerable risk to avoid the plight of my peers.

    There is a war on young people today and I know that most of my friends and cousins will not have a bright future if it continues. Esquire has some interesting articles on the topic, for instance: https://www.esquire.com/features/young-people-in-the-recession-0412

    Take care,

    Colin

    1. Hi Colin,

      Thanks for your thoughts. Congrats on your net worth. One of the things I’ve noticed is that people are much wealthier than the mass media portrays them to be. You are a perfect example.

      It seems like we always know someone who is broke, but never ourselves. This is why I’m optimistic we are in better shape than depicted.

      Who is waging the war against our youth? The elderly or the youth themselves?

      Sam

  295. Sam,

    Thanks for the interesting post. I enjoy reading this type of material as I work to convince myself about taking early retirement. I feel we are in a good position for me to be able to walk away from my job in a few years, but leaving behind the max earning years and options that a regular retirement would provide are proving tough.

    I am 45 and married with no kids. My wife does not work. We have no debt, but also no real estate. I work as an expat in the oil business and have been overseas for the last 4+ years. Foreign service premiums in hardship locations have provided a nice boost to savings. We have about $1.2-M in my company 401-k and I have made Pre-tax After-tax contributions to the maximum extent permitted for the past ten years. The company match is 7% if I contribute 6% to the savings plan and offers a traditional defined benefits pension. If I retire at 55 (regular retirement at my company), I can take a lump sum pension payout, but would be required to take an annuity if I leave early. I have funded a non-deductible IRA since I was 24 and converted it to a Roth last year. Total IRA’s are worth about $110-k. I have accumulated about $1.31-M in a brokerage account. Total Net Worth is now in the neighborhood of $2.62-M and we are 70% in diversified equities. My goal to retire is $3.5-M with my pension annuity to kick in at 65. Our goal is to get to $3.5-M and retire in 2015, but this is highly dependent on the market returns. We intend to live overseas in a relatively low cost country and travel extensively in the future.

    While most of my career as an engineer has been spent outside the top 10% of earners, I have been a diligent saver and believe in living well below our means and saving for the future. I owned two cars over a 20-year period. I owned one home and sold it before going overseas. The sale was at the market high and that equity was put into the market at the 2008/9 low – serendipity is good sometimes. Choosing a solid field of study, industry, and company has helped our situation out a great deal. I came out of college with a good education and no debt, but no assets or inheritances.

    The best advice I can give to others is to start early, set short-term and long-term financial goals, track your spending and progress towards those goals, and adjust your spending and savings habits as necessary to stay on track. Your advice on deferred compensation, tracking your habits and progress, and real estate are all on the mark.

    Thanks again for the interesting analysis – good work.

    1. Hi Bob,

      Nice to hear from you! No debt = freedom! Although, I do like to have a $1 million mortgage to maximize what the government allows us to deduct. It’s just accounting really.

      Sounds like you will have no problem getting to $3.5 million in the next several years. Having a pension is sweet, and something most of us don’t have.

      Enjoy life and hope you stick around and explore more of my site.

      Sam

  296. Great post. It’s also been awesome reading the comments.

    Thought I’d contribute my numbers since it’s been so interesting to read about everyone else.

    I’m 27. I’ve been working for six years in technology. Currently: cash $20K, 401k $137K, IRA $10K, stock $139K, home equity $248K & a boring old car valued at $12K. Comes out to $566K net worth.

    I’ve been employed as a regular engineer at a couple large software companies. I’ve been fortunate to have been at a few that had good bumps in their stock prices while I was there. I also got decent returns by getting into the stock market near the bottom of the 2008-9 collapse. Parents also paid for my college where I got my computer science degree, so I started off with zero debt. Besides that, I’ve been saving and saving. Nothing fancy, I guess.

    Looking forward to keeping up with this blog & its community! FS: I’m impressed by your financial achievements.

  297. I am 42. I have mid 250s in 401k/Roth IRA. I have close to $100k in bank. No debt. I am renting. I have real estate outside of the country worth $500k. I have become financially serious and have been contributing $27k towards retirement everyyear plus $6k into kids 529s. My goal is to hit $1million by 50 between 401k/IRA/Bank account. Wondering if you could offer any advise.

  298. Enjoyed the post!

    I wandered by after calculating my Net Worth just now – which at 28 is around $247k at the moment. Thankfully we have a generous match and profit share at my workplace which helps out quite a bit, and I’ve been diligently investing in Real Estate since I my wife was 20 and I was 21! We started with about $10k she had saved since she was a little girl and have always diligently reinvested in our rental business. I calculated our Internal Rate of Return at over 18% since beginning (a rough estimate) which seems pretty good! I’m hoping I can maintain that going forward – although at some point I’m sure it will become more difficult. I sense I’m in a zone right now though were we actually have increasing options / flexibility for investing that may even boost that rate in the short term. I should mention we both have rather modest incomes and lower opportunities in the workplace than we had hoped for when we graduated due to the dismal economy – but I think this article points to how ‘the X factor’ benefits those who work hard and keep their shoulder to the wheel… anyhow, thanks again!

    1. Just for clarity: modest as in I make $46k and my wife makes $35k – and we made less to begin with. So remember: investing is a process, and starts slowly.

      Just start!

    2. You started investing in real estate 7 years go when you were 21? So in 2006 you started buying real estate and are doing well? If you don’t mind me asking what did your balance sheet look like at the end of 2008? How far did your real estate investments pre 2008 go into the red and have they fully recovered yet?

  299. I’m 28, and I have only been working for less than three years. I only made 28 k in 2010; 55 in 2011 and will likely make 58 this year. I’ve been living at home, so I’ve saved 70 grand. I don’t have any other investments. I don’t have a full-time job, yet. I mostly do temp legal work. Even when I get one, it’s unlikely that I’ll make a SALARY of more than 100 k. I am going to inherit at least 2.5 million tax free from my father and at least 1.5 million from my mother via life insurance.

  300. I am 40yo with a networth of about $790k. I do not own a home am renting in a tier 1 metropolitan area for a rent of about $2k per month. When I look at the pre-tax/post-tax % split, I am below the low end on your pre-tax mostly due to not maxing out the 401k for many years but only contributing up to the employer match of 6%. My 401k is about 200k and an additional 40k in traditional IRA. Post-tax is in combination of mutual funds, stocks and CDs. Overall I feel I have been to risk averse up to this point and could have gone much more heavily in the stock market. At present including pre and post tax I have about 47% in stocks or mutual funds and rest in CDs or Savings. I feel I could have increased my wealth many fold, if I had invested more aggressively. My goal is to retire by 55 with at least $1.5MM networth.

    1. $790,000 ain’t bad at all, especially since you are a renter. Do you not plan to ever buy? The benefit of homeownership, besides the tax deductions is the fact that once the home is paid off, you have a rent free place to live forever. All you have to pay for is maintenance and property taxes.

      Real estate is my FAVORITE asset class to build long term wealth.

      1. Yes, I do plan to buy. We are a single income family of 4 (2 kids who are in elementary school). The average price of SFH in our area are $600k or higher in any decent school district and the breakeven time period for owning a home is around 8-9 years. I owned a home in the midwest for about 5 years and sold it at about a $15k loss because I had to move in a hurry. The experience left me uninterested in buying again in the event that we have to move again. I feel a certain degree of freedom renting. However, I realize that we have been here for almost 4 years now and if we were to stick around for another 4-5 I do realize that I would have made a mistake by not buying. However, we are too unsure if we will for me to take the leap. The low interest rates are very tempting though. Eventually we plan on moving to a metropolitan area that is tier 2 or tier 3 where SFH prices are in the 200-400 range. That is when we would make a decision to buy.

        1. Gotcha. As you know, buying can be overrated due to the markets and to maintenance and property tax expenses.

          Take your time! If you are getting squeezed on rent though, I would buy, especially if you think you’ll be there for 5+ years.

  301. Dang, I wish I’d started the game sooner. I just turned 29 this month. I have a stay at home spouse with our first 11 month old boy. We save alright. Have been dumping the company match % into 401k for a few months now that I’m eligible. Our net worth is around 23k. My salary is 68k, but 10 percent of all income goes to our church. I graduated college late but debt free in 2010 and got a high paying hourly job (for a new grad) at about 120k/yr for the first 7 months, and am now happy with the 68k as my first salary rate out of school (engineering), but hope to see those raises keep coming because I’m pushing 30 and am nowhere near average apparently. This must be putting my siblings into the “scum of the earth” category. They have very low salaries and don’t save much yet. (They are from NM, we live in Richmond for the time being.) By the way, my wife and I are looking to buy a house soon, but want to make sure we’ll be in the area for at least 3 years before we do. Wish we had more assets at this point, but it is what it is. We’re also afraid there may be another recession, and we don’t know what to invest in. I know inflation will be terrible, but there don’t seem to be any markets that jump out as “stable”. I’m not much of a risk taker. I just with the value of the dollar would stay the same.

    1. Daniel,

      Better late than never. If it doesn’t hurt a little to save, you are not saving enough imo. Don’t rely on the government, parents, or anybody to take care of you is a good way to think.

      At least you have no debt! Your siblings aren’t scum of the earth, they are just going to have to work for their entire lifetimes.

      Good luck!

      Sam

  302. Ok I honestly thought I would blow away the stats on this, but after reading the levels I’m just not sure they are realistic for 20 something’s.

    As a 27 year old working on wallstreet I make a salary of just a tad over 100k. (55k 1st year) When I graduated in 2008 I had savings of $300, but zero college debt. Stated otherwise, I was essentially starting from a point of zero savings. After 5 years of working, paying rent, living life, I’ve managed to save 113k total networth.

    I think some of the “above average” started out with savings from mom and dad because I don’t see how some of these kids already have multiple rental properties at age 25? I guess I didn’t start out with a silver spoon, but managed to work up to a respectable net worth. I mean my avg friend my age doesn’t even have a qtr of what I saved, albeit, they the typical generational bum indicative of our culture today.

    The point I’m making is the the curve is skewed that the above average person might already have some kind of networth or doesn’t live in NYC and is still pulling 100k salary. Obviously the above guidelines are just that, an estimated guideline, but perhaps I really don’t fit into the “above average” criterion.

    At the end of the day I’m flushed with cashed, not assets, but I don’t know if that’s a good thing anymore. I day trade almost everyday so my networth also fluctuates anywhere from $500 to 15k daily. Biggest one day score was 18k. Worst same day loss was 14k.

    1. John,

      I definitely think folks with multiple rental properties in their early 20’s started out with a helping hand. It just is what it is when the bank of mom and dad can’t help but help their kids launch, especially if they have the means.

      It’s much HARDER for someone in their 20’s to follow my savings guide, b/c we have more desires and less financial discipline when we are young. Things get much easier after you get all the spending on stuff out of the system. Finances get easier the older we get if we stick with our savings.

      Definitely look to BUY SOME ASSETS such as real estate (click the link) with your cash as our cash is getting devalued quick.

      Good luck!

      Sam

    2. John, I had multiple rental properties in my early 20’s and am 34 years old and my brother and I own 70 apartments and a couple of houses. We are business partners. We did not get a dime from our parents. My older brother was in the Army and I was in the Navy so we both qualified for a VA loan with no down payment. While my friends were off buying cars and spending their money at the bar, both my brother and I started off with a triplex with no money down. I lived in the worst of the three apartments while I renovated and the other two tenants pretty much covered the mortgage at the time. I saved my pennies and bought my second triplex when I was 24 years old and 2 years out of college.

      In 2011, my brother and I bought a total of 11 properties, in 2012, we bought 3 and we are in contract on 2 properties right now. I get over $1000/month in positive cash flow from the 2 triplexes that I bought back in 2001 and have substantial equity in both.

      One thing I disagree with the author is on how often he refinanced his properties. I agree that 2.625% is a great rate, but 3.25% is also great and you only have the rate for 5 years. My rule of thumb is that I don’t refinance unless I can drop my rate by a full % point. This way, I feel like the cost to close the loan makes sense. Two each their own I guess. I do like skipping 2 months of payments when I close, but I don’t recommend refinancing unless you drop your rate a full 1%.

      Also John, you are 27 years old with $113,000 in assets. If you get out of NYC, that is a great down payment on 2-3 rental properties.

  303. Energy in Savings

    Great approach for those who continue to strive through competitive and comparable methods. Although my pre-tax contributions fall below the average, my post-tax savings exceeds your calculations.

    Quick Bio:
    Graduated 4 years ago with $12k outstanding auto loan and $15k outstanding student loans. Been working in the energy business like a dog ever since.

    My approach, albeit fairly elementary, removes external risk that I’m currently unable to manage due to time restraints. I can’t control the market and flat out don’t have the time to research and monitor investments. My employer matches dollar-for-dollar 401k up to 5%, thus, I contribute 5%. I plan to increase in 2013 for tax purposes and historical fund performance. I would also like to preface this by stating that my approach is not for all ages but can be used to build the strong foundation many people are searching for.

    Since I can’t control the market, I manage my net worth in a way that I can control 100% of exposure – manage spending habits and saving.

    I wont see Apple/Google like returns in a savings account, but I can guarantee I wont see Circuit City like losses either.

    I’m 25 years old, will earn a pre-tax 2012 income of $125k, have zero debt (credit cards, student loans, mortgage, auto), hold a 401k balance of $30,000, Roth IRA with $4,000, Investment Account with $400 and a savings account with $140,000. Total net worth of ~$175,000 ($100k above average according to your table).

    My theory is many people in their 20’s and 30’s are swamped building the foundation for their career and don’t have time to properly manage investment accounts, real estate projects, etc. Unless luck falls on their side, they will likely see unfavorable results when attempting to invest with limited information (as did I). Go back to the days when mom & dad taught you to save – you can manage it every day by making smart decisions. The last thing a person starting their life needs is to lose hard earned money in the ever changing stock market.

    Every good house is built on a strong foundation. I believe it is important to begin pre-tax investments early on in life, but leave the market play and real estate projects until you have a firm foundation. Don’t over leverage.

    This approach also gives you the flexibility to make purchases, take vacations, etc, when you want, and without debt restrictions.

    My apologies for the long post, but it is rare to find a group of individuals in one place striving to be above-average. Thought I would pass along my thoughts for those in their 20’s and early 30’s.

    Cheers!

    1. Good stuff! Can you share with us how you saved $140,000 in just four years out of college? I think it will be very helpful for all!

      I’ve believe for the longest time that people have much more money than we think!

      1. Energy in Savings

        Started out making $47k a year, but lived like I was making $30k. Worked hard to earn promotions and although my salary has more than doubled, my spending has only slightly increased. I set monthly goals and track progress every week to ten days, adjusting each spending category as needed to meet end of month objectives.

        For comparison, when you receive a promotion, don’t go out and buy a new car – keep driving the same vehicle and save the car payment. Saving an extra $500 per month may not seem like much, but that’s $30,000 over five years…over and above anything else you’re saving.

        Earn $100k in salary, but live like you’re making $40k.

        1. Just based on a quick read, looks like EiS is doing great, but I think the approach has a tremendous opportunity cost in terms of what he/she could have been earning based on even the most conservative investment plan (forget about exotic, highly risky investments) rather than actually losing money to inflation based on close to nothing in returns at the bank. The loss of the compounding effect of that conservative rate of return (again compared to next to nothing in the bank) is a silent killer in this case!!! That said, at 25 there is still time to put a great investment plan in place now and be looking pretty in 25 years! Start letting that money do some of the work for you — it works!

  304. Daniel Ellison

    I’m in line with the Above Average savings plan. Hopefully, I’ll be above the “above average” soon.

    This is a great website and much needed for the US, more than ever before. It’s very simplified.

    I’m 26 years old, have a college degree, but job isnt great. However, I have 2 rental properties that cashflow $500/month and have about $30,000 equity in both. Also, have about $15K in Silver, and a little in stocks.

    2013, I plan to buy 2 more rental properties and lock interest rates below 4%.

    Predictions for 2013 (see below)
    1) I predict interest rates remaining below 4%.
    2) I predict the Fed to double their Quantitative Easing from $35 Billion/Month to $70 Billion/Month. I see massive inflation continuing to rise with all the Quantitative Easing.
    3) I predict single family home values begin to increase.
    4) I predict the DOW to fall to ~8,000.

    All the best,
    Daniel

    1. Daniel, what makes you think the DOW is going to fall 30% next year? Very pessimistic!

      Care to bet? Ill spot you 1,000 points and say the Dow doesn’t even breach 9,000 for whatever amount you like!

      Let me know!

      Sam

      1. Housing cannot go up much, if any, with Dow down 30% in same year. Markets are more correllated than that.

      2. Just happened on your site — quality stuff! BTW, I really hope you got some action on the Dow to 8,000! Hindsight is 20/20 but no way was it going down 30% this year!!!

        My profile is a little different than those I’ve reviewed here so far, but here you go… Single, age 49, 401k 565K, DB lump sum pension value 440K, cash balance pension value 60K, Roth IRA 52K, Brokerage Account 94K, Unvested RS 72K, Checking 38K, Home Value 520K, Inv. Prop Value 350K… DEBT: Home 440K, Inv Prop 220K, Stud Loan 32K, 2xCars 30K… My lump sum value will close to double at age 50 based on early rtmt factors coming into play. What say you Samurai?

        1. Too bad, the least they could have done is bet you lunch — that would have proved to be a good meal for you!

          I would put my net worth at 1.4M. No doubt about it — great to have the combination of both the db and dc plans, but working 25 years for an oil company will do that for you! Unfortunately, like most companies, mine chose to shift away from the db plan back a few years ago, so they closed the plan to new hires and froze us legacy folks — no additional benefit for service but age still counted in the formula. Used to be when the plan was still open, that at age 50, your lump sum would basically double… Now, depending on what age you were when the plan was frozen, you see something less than doubling at age 50. The company partially made up for this by introducing a Cash Balance plan. While that doesn’t make up for the lost value in the legacy plan, it takes away some of the sting.

    2. Interest rates can’t remain low, property values rise, and the Dow fall all at the same time. If property values rise, interest rates are generally low since buyers can afford to buy mortgages.

      Some correction is definitely in order for stocks, but such is life and markets in general.

    3. Well, 2013 came and went, lots of things changed and lots of things stayed the same. Interest rates were relatively flat (compared to historical numbers). However, the markets clearly outperformed your prediction (generally speaking closed up 26%+ for the year). Real estate (physical real estate) posted some decent gains as well…obviously your mileage will vary depending on your location.

  305. Just stumbled on your website through Pinterest… WHY HAVE I NOT FOUND THIS BEFORE?!

    I like the guidelines… And I would say that personally I’m “on mark”. Just turned 31, $150K annual salary, $140K in 401Ks/ IRAs, $70K in home equity, own my car outright, no CC debt, and $20K in savings = $230K total net worth, so pretty close to the target. Also just took out a cash-value whole life policy that I am overfunding so that I can lower my effective rate of taxation in retirement.

    I think that the difference for me was I paid my way through both Undergrad and Grad, and so while I didn’t have the benefit of saving money during this time, I did manage to graduate without student loans. The long-term cost benefit to me was greater that way than savings during this period of time. Still, I’d like to have more…

    Got married about 2 months ago, and unfortunately my husband hadn’t always made the same good financial decisions as me. He was “bullied” by his mom at the age of 23 to buy a house he couldn’t afford, was overpriced versus market, and was a forcl so needed a LOT of money to get into good condition – Tripple Whammy!!

    We managed to sell his house earlier this year, and didn’t have to short sell it…. BARELY. But it didn’t help to recoup the $20K we had to pour into it to make it sellable (and I’m taking things like replacing wood rot, roof, necessary repairs, not stupid stuff like staging here) plus any of the down payment he put on it.

    All things considered its better than it could have been… but it was definitely a hit. It did, however, allow me to convince him to let me take over our finances, which he was very happy to do. And he’s GREAT at working within a budget!

    1. Wow, I’m on Pinterest? I can’t keep up
      Welcome to my site and congrats on your financial progress! Sounds like your hubby is on board now and things are going well.
      Spend some time looking around, subsribr and don’t get too offended by my opinionated posts!
      Glad to have you.

      Sam

    2. Sometimes, a hit like your husband’s house may actually be a good thing. You broke even and learned a lot in the process… more than you can say for most college classes.

  306. 32 y, male, married (for 1 year). Combined household income (pre-tax, pre-401(k), $170K. Combined 401(k) $230K. Combined Roth, $55K. Liquid + Stock $80k. 3 rental property units (just acquired last year, so maybe %20-25 equity), $130K. So ~ net worth of $495K (divided by 2, ~$250K per person). On target, but income rise is very slow, so we’ll see how we stack up in 5-10 years.

  307. I am a 24 year old who graduated in December 2011 with a computer science degree who has a little over $50K in combined cash and stock with no debt (paid off ~$20K in student loans.) Getting a raise soon that is going to push my salary above six 0’s, so I should do pretty well by the metrics in this article… albeit I have no money in a 401K or real estate (yet).

    Anyway, thanks for the quality post. I will do my best to surpass the high-end “above average” individual going forward :)

  308. I think the numbers here for the 20-somethings are pretty unrealistic, especially for the tax-deferred number. I definitely fit into your “above average” category (management consultant, graduated with honors from a top school, save actively, read up on finances), but there is no possible way that I could have hit these numbers. I’m 25, net worth of 32k, graduated with 5k loan debt I paid off in year 1, so basically I’ve saved 37K in 3.5 years, or a little over half your “average.”

    Where I think the numbers deviate from reality is the tax-deferred savings numbers. When I first got out of school, I was only making 50k/year. While saving 8k in year 1 is a stretch but doable, saving 17k in year two as the LOW end (over 30% of my income – and that’s before the after-tax savings) is extremely unrealistic. I will max out those contributions when I can, but I think a tax-deferred rate of around 6-10% as the low end is a much more realistic number.

    That said, I think the after-tax numbers are pretty spot on. I save about 7k/year through an ESPP, plus kick whatever I don’t spend every month over to savings for a total of about 8.5-9k/year. Those numbers are still a stretch but definitely doable.

    I appreciate the effort that went into this, thank you.

    1. No problem Mike. I saved 15K in my 401K in 1999, and I only had a base salary of $40,000 then AND lived in NYC. I shared a studio with a roommate.

      It’s up to everybody to calculate their numbers and make their own savings plan. In the end, there’s nobody to congratulate or blame but ourselves.

      1. This is an excellent site! I love the article and the tables provided. My suggestion is to refine the tables and make them look more like a curve. There will be smaller slopes (increases) when you start out and they get steeper after the third year until the the 10th to 15th year. Then income declines gradually. The reason why I am saying this is because when I first started working I had very little net worth. They were well below your chart. After the third year, then that was the time that my net worth exponentially increased.

        I was curious to ask Financial Samurai about your comment on your first year’s 401K value of $15K in 1999. Can you give some clarity on that? I also lived in NYC and did investment banking – although I started in 2004. Most firms would only match 100% of the 6% of the Base Salary contribution. Six percent of $40K is $2.4K so if your employer matched that, that would be $4.8K. How did you get to that $15K? Was there a special one time bonus given? Or did you just put in a lot of money?

        Another comment is that you (the readers) can have some variations or adjustments to the table as everyone has a different situation. Some people marry early, graduate late, or go to graduate schools with a high cost of tuition (IVY Leagues – business school, med school, others) so when they graduate they have accrued a high amounts of debt making their net worth tilt to the negative. So, don’t feel bad if you are on the lower end or below the line in the beginning or when you are just getting out of a huge life investment. The most important thing to remember is you are having an upward trend and improving your savings/investing accounts (i.e. living within your means). But having a goal written on paper that you can see and remind yourself daily can make the difference (I do this).

        I have some friends who, after reaching their $1MM mark, changed their spending habits and attitude quite a bit. I think you can upgrade your life style to some degree. But it is important that you still be modest even though you can afford it. I have kids now and I want to make sure that they see me as being prudent and set a good example for them.

        Cheers….

      2. I have a hard time believing that Samuri put 15K into the 401K in 1999. The tax deferred limits were not that high at that time. See the table below,

        2006 $15,000
        2005 $14,000
        2004 $13,000
        2003 $12,000
        2002 $11,000
        2001 $10,500
        2000 $10,500
        1999 $10,000
        1998 $10,000
        1997 $ 9,500
        1996 $ 9,500
        1995 $ 9,240″

    2. You know, it took me 5 years to save up $175,000 working 3 jobs as a security guard. Being just shy of being 40 years old. It is not easy.

  309. So any advice / tips would be appreciated… I’m 34 currently saving 6-7k per month post tax, currently have 515k usd saved, we own our home outright valued at 2.2 mil usd but no real pretax savings as we do not live in the us and are essentially self employed, I may also be the least financially savvy person on the website…I have about 35k usd in a rtf… Any advice on where what we should be doing with our savings to maximize returns.?

  310. I dont fully understand all of this, and this may be a dumb question. When i looked this up i was merely curious if i’m making above average for my age, or what was the average salary for my age. I’m 22 years old about to turn 23, married and have a son. I’ve been working in the coffee for about 5 years now and took every chance in the stepping ladder. So going back to my question, what does the average 23 year old make a year? My current salary is 65K, i rent and own a a shitty pt cruiser and live in New York City. It’s just a weird question but i guess i’ve set it my goal to make 4 figures by mid twenties.

  311. Really enjoy the article.  There appears to be a significant lack of benchmarks for financially motivated, higher-earning / saving young workers.  If I read “contribute $100 per month to your 401(k)” one more time on financial blogs for twenty year olds I think I may kill someone…
     
    My only gripe is the assumption that savings should go into a pre-tax retirement accounts first.  I feel like NOBODY ever questions the benefits of this strategy.  In my mind:
     
    1) We don’t know what future tax rates will be.  Given the financial direction of this country, rates will likely have to increase (at each income threshold). The general assumption supporting pre-tax accounts is that tax rates will be constant.
     
    2) We don’t know what tax bracket we will be in when we retire.  The general assumption is that we will be in a lower tax bracket.  However, you estimate $2.5M net worth at 65.  Even at 4% withdrawal, we’re talking about $100K in income.  (My goal is higher than $2.5M).
     
    3) The value to liquidity should not be understated.  I don’t like the concept of money being locked up until 59 1/2, especially since I hope to retire well before then. This is especially applicable to younger workers with resect to down payments / wedding costs / etc.
     
    I only contribute the max to get matched in my retirement account–a recent change in my plan means I can now hit $17K, but that’s not the point–and save the rest in taxable accounts.
     
    One note. I do think retirement accounts are valuable, but mainly for the average person unable or unwilling to save post-tax. But we’re not talking about the average person here…
     
    29 years old.  $220K post-tax investment accounts, $60K 401(k), $10K savings

      1. I understand your theory, but I’m taking the singularly pragmatic approach of limiting my personal tax liabilities. I don’t believe a 401(k) is beneficial due to my first two reasons above. Now, that’s an opinion, but I think it’s well founded and surely not worth the lack of liquidity if I am indeed wrong.

        My decision to pay taxes now rather than later has no bearing on federal spending, both now and in the future. I’m not willing to pay extra taxes just to spite a profligate government.

        Thanks for the response and viewpoint

        1. JJK, 401K is bonus money, and I’m a big advocate of saving pre-tax money AND post-tax money. My post tax money savings is in the seven figures, more than my 401K money of $405,000 at the age of 35.

          I highly suggest doing both. Take advantage of the gov’t. Don’t let them take advantage of you.

        2. Good stuff. We’re ultimately on the same page.

          From an overall investment strategy–not just thinking about each individual dollar saved–people should consider tax diversification as an additional benefit of saving pre and post-tax.

  312. Name: Donald Chen
    Age: 19 Years Old
    Net Worth: $2 million

    I admire your blog because I’m always interested in where I would be if I didn’t try hard from an early age.

    I started teaching myself everything about making money at the age of 11. I was reading books and reading other people’s stories and listening to advice from older people. I found out trading to be something I easily picked up. I started out with just paper trades and a virtual account. I found out that certain stocks would go up depending upon how much publicity it would get. I carefully selected certain stocks that had the best probability to go up based on a trading formula I devised. In under 2 years, I made over $2 million.

    I feel once you make a certain amount of money, life changes for the better. You are free to do more hobbies, activities, and enjoy better meals. I saved up for everything to have a constant capital flow. I could not date, drink soda with my meals, or anything extravagant. Later, my life changed. I was dating 2 girls a day, not looking at the price on menus, and spending time doing the recreational activities that I enjoyed.

    I have never gotten into understanding real estate because of it’s complexity.

    I decided to no longer take any more gambles (I read so many stories of people making large amounts of money, only to lose it all). I told myself I will be content and be satisfied with what I have.

    I invested the entire $2 million into a combination of option trades, bonds, and safe stocks. (I am selling puts on some stocks which I predict will rise, and I have sold covered calls on safe stocks and collecting dividends, and I have found some good bonds that are paying a good safe dividend)

    I am generating 6% per year through all these strategies (minus commission and taxes).

    With my $2 million base, I am collecting $120,000 year in profits without any work. I am living within my means and using the monthly income to do the things I need to enjoy.

    Any advice on what I should do next? Everyone tells me to “live life and just enjoy it and not work too hard”, but I feel I should work even harder.

    I want to learn how to create a blog that is successful like yours and would love to learn how. Please contact me by email.

    1. Nice work! My #1 advice is do not think you are invincible. There will be times you lose money. Limit your losses. Rule #1, don’t lose your Nut!

      Also, not sure if you are going to college, by I’d definitely recommend getting a degree. You need backup. You’ll never know what can happen.

      Good luck!

  313. Well I am sorry I sis this search, we xome no where close to these averages. I am a disabled person, left the work force 14 yrs ago and my husband is still working at age 65 and will probably continue to do so because we can’t afford to have him retire.

  314. Things get a little confusing when someone has most of their net worth in their home. I live in an area with low home prices and my house is paid for. My home only accounts for 15% of my net worth. I have 75% of my net worth in cash and investments. The last 10% would be allocated to vehicles and pocessions with value.

    How does this break down compare to others? BTW, I live in North Texas.

    1. Not sure, as you don’t provide any numbers for any variables so I can’t solve for the equation.

      Also depends on whether others count their home as part of their NW.

      If the median net worth is $75k, the median home equity is a scary $70k!

  315. Does above average people NOT help other their parents or siblings or contribute to the charity? These points will affect your financial standings, and yet I don’t see those listed in your assumptions of what defined as above average person.

    …Or above average person here means ‘selfish rich kid’

    1. By absolute amount, above average people contribute way about average to charity. What’s your point? The fact of the matter is if you only make $30,000 a year, you can only donate $30,000 a year. If you make millions a year, you can donate many fold more. Should we attack rich people for being the most charitable people in our society?

      1. My point is that your definition of ‘above average person’ is almost as meaningless as to the point of comical or laughable. Does above average person is also super-human that they don’t have any ailment. Surely you’ve heard that most of us one serious ailment or accident away from being poor?

        1. Had you just define ‘above average’ as someone with above average net asset, I would have no problem. But then you went on, tried to define what an above average person really means. that’s just comical.

          Many people could’ve done all those things in your ‘definition of above average’ and yet still fall to hardship out of bad luck. And many others who didn’ t do all those things you listed and are ahead than most of people (lottery, inheritance, gambling, etc). There are many external factors we can’t control.

          Just define ‘above average’ as someone with above average net asset. Does it really matter how they got there?

  316. great article! I would fall above the mean in most of the categories and ultimately above in net worth. Not sure I agree with the aggressive buy a home stance. Essentially when you buy a home you are really renting money. In most cases even taking into account tax deductions your home would need to appreciate 3-6% every year to break even. This includes the assumed 20% one would put down vs invest. Net I would say buy investment property and rent till you die.

      1. OK I read it and that’s an awesome story, however, I think you may be in the minority right now.
        I do appreciate owning property but only when you can pay for it up front.
        This is one of a couple of quick reviews you may find interesting too. Save on!
        khanacademy.org/finance-economics/core-finance/v/renting-vs–buying–detailed-analysis

  317. Here’s my take: I’m a renter and I am doing better than the high end “above average” person per Sam’s charts.

    Despite the fact that I’m a renter, I DO own real estate. In that regard, I believe owning real estate is absolutely critical to improving one’s financial picture.

  318. Paul Williams

    Your numbers are not grounded in reality – where are they coming from ? I was a loan officer and was in a position to ask people about finances and these numbers in your tables apply to the top 3% of the population.

    So what may be possible for a few is beyond the daily functioning of an uneducated materialistic generation(s) schooled by ignorant libtards who care not about bettering the future of anyone except themselves. Also life just has a way of getting in the way of the best laid plans – I have never seen tables projecting net worths that high as it pertains to the masses

  319. Almost Retired

    I would also like to add, as others have mentioned, that we also lived the lives of our dreams along the way–by the beach in CA–traveling the world, etc., as we built our net worth.

    The last thing you want to do is end up with millions and no time to spend it!

    1. Indeed. Spend away! It’s why I have a house in Hawaii and another place in the snowy mountains of Tahoe while living in SF. No point making money if you don’t spend it!

      1. Almost Retired

        Fantastic, FS–sounds like us–only we’re in SoCal. In the end, we believe it’s all about our spiritual beliefs and our eternal destination anyway, but it is a blessing to enjoy life to the max while we’re here!

  320. Almost Retired

    Since I’m almost 60, I’m always looking for “average net worth” info, and yours was very informative–thanks for posting.

    We’re quite a bit above the high average on your charts because we have a lot of equity in a CA real estate, and seven figures in savings.

    Looking back, I would, however, say there are many “wild cards” younger people will encounter throughout their lifetimes, and getting to the ultimate net worth destination is not as easy as it may sound.

    We were lucky, but many friends who also had great careers and great plans fell by the wayside with job, family and health issues along the path of life, so my advice would be to save as much as you can as soon as you can and try to hold on to it!!

  321. 36 yrs old, single (never married), degreed engineering, <100k salary in the last few years. Recently sold my home to relocate for a job. ZERO debt; car is paid off, no credit card debt, no house payment anymore.
    The total net worth numbers for me seem right on. I always roll over my 401k's when I leave a job so it is difficult to know that total. I just recently hit a salary mark that makes tax deferred saving difficult; Roth IRA is out of reach and even putting in the max 401k has been an issue for me in the past (top heavy contributor companies resulting in my contributions being returned).
    My net worth is about $425k; mostly investments (no real estate) and about 25% cash. Remember no debt, yes I am proud of that.
    I am very surprised at the numbers and that I am just above average. The people I know (even college grads with good jobs) have nowhere close to this saved up. Most spend too much money and are too far in debt. I asked my financial advisor how I was doing last year compared with people under 50, and he said very well. He is not one to overstate this since he obviously wants me to contribute more. He did say he sees lots of people doing well at my age but most have an inheritance… SO, for us that worked hard to get where we are (wherever that is) keep up the hard work. I think if I can stay single and not have kids I will be able to stay on track. For those of you with little ones, I don’t know how you do it!
    So much for me thinking I was saving too much and was well above everyone…. Time to cut back and save more!

  322. I am 72 and retired, female and divorced, with graduate degrees and 45 years an academic in higher education. Saved throughout my career and lived well but below my means. I have no debts whatsoever, plenty of cash savings, a very healthy retirement portfolio, a nice home all paid for, a good pension plus above average social security payments, so I am able to travel widely and stay in high end hotels. My net worth is just under $2 million, and I only have one child, who is well set up, similar situation to mine at 40 years of age.
    I am grateful I was able to live with financial discipline so I can relax and enjoy the rest of my years. Oh, btw, I am Hispanic of European descent.

  323. I am 26 and have a net worth of $240k, so I am ahead of your above average person for my age. I am worried I will fall behind when I go to get my MBA. I’ll be spending $160k and have no income for two years. I might not catch up till I’m 35.

    1. Great net worth for your age, and definitely a valid concern getting your MBA. I got my employer to pay for my MBA and did it part-time. Any way you can do the same? The returns for getting an MBA are going down. However, you can still strike it big, and if you work long enough, you will definitely earn things back.

  324. Richard Gunning

    I’m 66. 401Ks did not start 40 years ago. Think they started only in the mid-1980s. So the 401K amounts seem skewed high for the older folks like me. Otherwise most interesting.

  325. I like the attempt here. It’s a nice way of seeing where others should be given that the median/averages put out by the government stats seem to point out most of the nation is in trouble. I’m light on 401K and Roth, but heavy on real estate and small business equity.

    That said, I’d caution young professionals from putting everything into their 401K. The problem with that strategy is that you can’t get the money back until later, and growth is not smooth and linear. The biggest thing this example can show is the years worked. Periods of uninterrupted work and a balanced personal budget go a lot further than a cyclical boom/bust pattern. You’ll graduate with debt, you’ll need money for a ring and a wedding. You’ll need more money for a home downpayment. You’ll need emergency money in case one of you become sick or unemployed. You’ll have hospital bills or need to buy a car. Essentially, make sure to get the 401K match, as its free money. Next establish a safety net against the unexpected. Third max your Roth account. Once all of that is established, start saving for a home. Once that’s all done, then you can start maxing your 401K.

    However, even beyond that, marry well. Seriously, having a partner that can both contribute and budget is the best financial decision to occur. 10 years ago a group of college friends met up for a camping trip. The light conversation of who would become a millionaire first arose. The guy making the most and certainly with the highest IQ wasn’t really favored. The guy seriously dating a cougar with a bank account was. Second came an above-average clean cut guy working for the government (ok, but not great) who was marrying a vetrinarian. Third most likely was a guy who, while losing himself to drugs, was marrying a girl who also shared his interests, but came from considerable wealth. (Inheritence still plays) Finally came our buddy that was a genius and I drew last. We’ve all done well since then, but keep that in mind. College bills are just the start, not the end of the non-linear items you’ll need to be saving for.

    1. Chris, great thoughts! I agree with what you say. Max the 401K out, but at the same time, don’t depend on it at all. Expect the government to take it all away from you! That way, you can focus on investing and saving your after tax money and building alternative income streams. If SS and your 401K is there when you are 62-65, then great! If not, no big deal.

      Why were you considered last of your friends?

      You should check out my post on 9/17 about 401K rebalancing.

      1. I was considered last because I wasn’t dating people seriously then. I was very much a fan of field. If you think of the economy of scale achieved by a couple, it doesn’t much matter how much more one can achieve individually, and there were only two people to be expected to be single 2 years from then, myself and the genius. I’m not saying I’m rice pudding, and that trip actually marked the start of a new promotion that was big for me at the time, but the sooner you can find a good fit, the better. Defensively, you are less likely to need to raid savings if you have two contributing partners. But the biggest meal ticket is entrance into real estate. You can afford to buy a home and have a tendancy to make better decisions about location/schools etc. What you’re looking for are good, stable assets. For this, one needs to think outside of the stock. If I have $20,000 and I put it into the stock market and make 10%, I’ve done well and made $4,000, but after tax it will drop to $3,000. If put it into a $100,000 home that grows just 3%, I still make $3,000, but then I also have a tax deduction of $3,200 that will be worth about $900. While the last couple of years have seen a large rise/fall in valuations, normally homes are fairly stable assets. Everyone needs one. That said, you can’t buy this asset with your 401K. You can’t pay for a hospital stay with a 401K. The 401K solution, and while certainly better than nothing, is very weak because it can’t be used as collateral and can’t be retrieved for any sort of liquidity. It’s perhaps your most worthless asset. It was made that way by design. It was to replace pensions. Seeing it every day makes us feel rich and not broke, but the reality is that I made two errors. Marry late and stick my savings all in a 401K. Now, that said, if one marries badly, that is tremendously costly, so don’t rush out and get engaged to the hot gf that’s good in the sack but needs a walk in closet for her baggage, but don’t think you’ll be able to outdo an average couple by being above average as a single. Though it’s not written, the world we live in is scaled to the couple level. The only clawback is children. They are cherished, but they destroy wealth and time like nothing else. It’s totally worth it though. However, it really puts single parents in a difficult spot. Incidentally, of the 5 of us, the predictions were likely correct. But the biggest factor was marriage. So, save, hit singles with your money, make investments that don’t cause fights and take care of each other. Live good lives and the benefits pop up in unimagineable ways.

  326. Age 34 – Net worth $1.5 million – property own 3 houses payed off
    Savings $ 35k the problem I have now is that I had a great business that was making good money but due to some issues I had to close the business and now I dont have any money to start a new one ! All the money I made I invested in buying homes cash , and now I collect the rent but the rent is not enough to be a amount for me to start my own business again , it just pays for my everyday expenses. I at the moment working for a company and getting OK money but nothing special.Just waiting for that golden opportunity. and by the way I dont have any college degree.
    I wish I did though,would have been nice , but I proffered work and $$$ at that time :)

  327. Family of four – 78K in traditional IRA and 401K, 225K in Roth IRAs, 200K in Home Equity.
    Puts our net worth at about 500K – low by your standards (we are 45). Also have 60K in 529s for kids college (dont count this towards net worth because its going to be spent!). We make about 80K a year jointly.

    My advice – we built the bulk of our savings and home equity prior to having children. It was easier to save even while paying student loans – we were also making 2x’s what we make now. Once the kids arrive, you are going to want to scale back on work and we decided not to move for job opportunities so the kids can stay in the same schools district their whole education.

  328. OK, I’ve read your stuff and it’s a great achievement. You were diligent, had a plan, and achieved the freedom you wanted at an early age. As is obvious, you still have financial goals, and perhaps need some active income to achieve that. However you stack it, it’s an impressive feat ($2.5-3m diversified net worth by mid-30’s?), and should you decide to pursue work, it’s on your terms. This is a great achievement and merits a book and a blog.
    The one thing a little distasteful about your comments is the acerbic tone you use to disparage the observations/criticisms of others. While you are young, intelligent and you can do the math, you probably don’t understand the trade-offs made in highly individualized achievements, having kids, pacing life, etc. While merited sometimes, other times your comments come off as self-congratulatory and disparaging to others that are making reasonable points.
    Either way, I’ll keep on reading your stuff and the comments made, as there’s some great info and great stories. Accumulating wealth is something we all have to do, though ultimately it’s how you use it. Your story really begins now. Good luck.

    1. Thanks for the feedback Martin. I really appreciate it. There is a fine balance in defending and arguing a point every blogger must go through. I’ll try and be less acerbic in the future.

      Do you have a blog, or write regularly for readers to criticize? If so, let me know as I’d love to read it. One of the strategies I’ve thought about was just reducing comments down by 90%, or altogther, or just don’t respond to criticism. What do you think? Saves me a lot of time and allows me to focus on writing.

      Do you mind highlighting a couple specific examples of where my comments rubbed you the wrong way?

      Check this post out, “Too Many Comments Can Be Detrimental To Your Health

  329. Interesting blog. A little bit too much emphasis on social status and ego for my liking rather than projections of future wealth & freedom, though still a fun read.
    I was a pro sportsman in a minor but global sport for 12 years. I didn’t accrue the wealth possible due to dot com crash at my peak earning period in 99-00, too much on chasing women around the world, traveling for fun, pilot’s licence, MBA and a general lack of knowledge about how to invest rather than save.
    Took a steady job in 2005 and started immediately investing in 401k/403b at 100% plus contributions, and last year a multi-family residence. To me this is a necessary investment if you can deal with the stress. Write off mortgage interest, depreciation (and 80% of expenses if it’s a primary residence), and you’re getting others to contribute to your cash flow and future wealth. I’ll probably do more, though unsure if I’ll do multiple residences by borrowing on the others or if I will use cash for a large down payment. ROI is still good even if using cash. End game is a mid-sized luxury multi-unit run by property managers.
    The other thing I will do for the foreseeable future is open an LLC using my skillset, sellable outside of my 8 month working position, and could create $30-60k per year without much stress. This also seems to be a good way to write off some necessary living expenses like car, home office, paying family for work, etc.
    I have a 5 year old son and a wife that earns well; she has an amazing state-run pension in Canada ( I work in the US and commute), owns a $1m+ house since she has benefited from the 15 year consistent increase in home value. If all goes pear-shaped, we keep our own assets. She’s worth around $1.3m, though is nearer 50 than 40. Still beautiful.
    Due to this, I judge my assets on personal walk-away (not from my son!) assets. If I had to sell everything tomorrow, my personal assets are less than the figures mentioned for my age (39), around $360k, nearer $300k once 401k penalties, real estate fees, etc are played out.
    I’m happy though. I have a lot of quality time to spend with my family, freedom and a little cash to think about other investing ideas. I’ll never be rich, though I have had an interesting time so far, and I should be able to push toward retirement around the 50 mark, seeing as I would rather lie on a beach in Thailand, hang out with family, play tennis, read and research ancient sites and play with my consciousness rather than have the cottage, boat, fancy cars and accoutrements of the aspiring upper-middle. To me this is like death by blonde and bland Stepfordness.
    My 2 cents – if you are not in a high-earning job (banker, real estate finance, etc), follow your skills and/or passions. Perhaps take a job, though definitely open an LLC, even as a consultant, to funnel expenses through. Invest in rental properties, though understand cap rate and other relevant indices. Don’t get involved in chasing what your peers make or buy. Get the fundamentals right, and maybe one day you will have a bit of spare cash to throw at higher-risk investments or start-ups, or better yet, explore other ideas unrelated to the accumulation of wealth.

      1. Appreciate the reply and the references. I’ll take a look. I found the blog because of the thing I was mocking – trying to figure out where I stand.

  330. 38 years old, My net worth is close to 5.4 Million US. I made almost a million saving and investing diligently and investing conservatively (stocks/bonds mainly). I own my own home and own a rental property. I made the rest of my money when I sold my business, I started. There is no better way to accumulate wealth then having a business. I never thought I would sell my business or that anyone would want it, which is why I saved a lot in retirement and non retirement accounts. This is a great site and just what I was looking for. It is amazing to see all the people that are doing extremely well saving too, it inspires me and humbles me to read some of the stories. I have been incredibly blessed there is no denying it and will be retiring in a few more years to focus on my family.(when I am 43) I live in a very affordable part of the USA, which allows me to do that. The Financial freedom my work has provided me, has definitely taken a toll on my family and it is time to priortize them as number 1 and enjoy life before it slips away. That is what I am learning to do now, I actually never thought it would be that hard, but I guess I was wired to just think about ways to make money so for me it continues to be a struggle, but it is a challenge I will overcome. For all you savers, take it from me and enjoy the ride along the way to your fortunes, after all that is what life is about.

  331. Joseph Alexander

    I am 44 years old and about to hit 45 in few weeks. My net worth is close to $7,900,000.00. i was taken out of high school before graduating due a my father falling ill and having to “take over” the household and work. Thus I do not have a high school completion nor any other schooling afterwords. Five years ago I had a very bad accident where I almost lost my life and had a two year span of rehabilitation. I bounced back and took on life by the horns. I live in Toronto Canada (where our winters are not that bad and our spring and summers are very beautiful and warm). The real estate market here has been very strong and I am a 100% believer in owning your own home and other real estate. Where else can you leverage your asset(s) like you can with real estate. Now the interesting thing is I am always an optimist in life, I believe no matter how bad things look, there is always a route around the mess some how. I grew up some what poor until the age of 12, my parents where European immigrants that came to Canada with not a penny to their name and worked hard. With no insurance, no real savings, and no real assets accept some real estate, I learned a hard lesson in life when my father had is issue with health. You can utilize your principal residence on a rainy day if you have to, you can not do that with a rental that you don’t own. I know I am an above average earner, and I took many chances in life, I have no regrets. My beautiful wife and two children are my reward to all my hardships and accomplishments. Yes Canada has a high personal income tax structure, but our corporate tax structure is quite low compared to most G7 countries. Get some good accountants, bookkeepers and lawyers behind you and enjoy life.

  332. I highly doubt these stats are accurate. They may be, but what percent of persons or families are you basing this information on. Or better yet how many people in total really have these amounts of cash at age 45 or fifty. Not many.

  333. Wonderful article! I didnt meet the average goal of where i should be, and this refocus my savings goal. The best part is the X factor. I 100% agree with that statement.

  334. This was a great article; I really enjoyed reading it. My wife and I are quite a bit above the average. We’re both 30 years old with a net worth of ~$465k.
    $130k paid for house, $212k in retirement, ~$70k in liquid savings, $12k emergency fund, + no debt, pay for everything with cash.
    My wife stays home with our two kiddos. I’ve had a 100% commission job with the same company for the last eight years. I’ll make ~$175k this year.
    Living the PAW and Dave Ramsey lifestyle. Hope to retire around age 60. Great site, I’ve enjoyed surfing around here!

  335. I would consider my wife and I AAPs, but we’re well below the low end of your net worth table for our ages. We’re both 30 years old, college graduates, both are working on advanced degrees where the tuition is covered by our employers, and currently have a base household income of $163,000/ year. I graduated without student debt and she graduated with about $12,000 in student debt. We both put 14% of our before tax income in to our 401ks, have both been working and renting for about 6 years, and have what I would consider a relatively high net savings each month. We also are about to close on a $460,000 home, are putting $50,000 down on it, and plan on paying the loan off in 15 years. Our net worth including our 401ks, savings, assets, and debt is currently about $204,000. That means were less than half of where you say we should be for AAPs.

    1. AAP? Above average people?

      I donno man, if you can only put down 10% on a home, I would say you guys are no more than average. Those who only could afford to put down 10% were the ones who go us into this mess.

      Can you not put $100,000 down? With a $50k buffer?

      1. AAPs= Abover Average Persons

        We could have put 20% down but that would have cut in to our buffer. My wife’s real estate law professor for her MBA recommended we get in to a house while interest rates are low, even if we were only going to put 10% down. Our original plan was to put 20% down and have a $50k buffer this winter, but we bought a house earlier to take advantage of a 3.75% interest rate.

        You grossly over simplify the real estate melt down by stating that the people who could only afford to put 10% down are “the ones who got us in to this mess”. The vast majority of the people that got us in to this mess bought over priced homes with no money down and didn’t have the means to pay for them. A variety of banks made very risky loans and those loans were repackaged as investments and sold on the market to put it simply.

        The median HOUSEHOLD income for the US is about $50k/ year. Any single person making that amount has an above average income. The median net worth of a household in the US in 2010 was $77k. Any single person at or above that is above average. I think this article should be titled “The Average Net Worth of the Far Above Average/ Exceptional Person”. Seems this article serves the purpose of making financially secure people feel insecure about where they are. If you can save that much and build that much equity all by yourself by the ages you state, you either have a far above average income or don’t have much to live off when it comes to your remaining expenses. Any single person who is meeting these targets is doing very well, and far above average compared to the rest of the US in my opinion.

        1. Your net worth estimate belies your net household income. What on earth are you spending it all on? You don’t need an expensive car, home, or suit and timepiece that proclaim to the world your level of income, but I’d bet you’re both driving really nice, overpriced cars in the best clothing. If my wife and I can improve our net worth by $30K per year on less than half of your net household income, then you should be able to do much more.

          I agree with you on what got us into the mess with the housing market. It’s shameful what the mortgage industry has done and continues to do. It’s also shameful how credit-dependent everyone is.

          We really wanted to pay cash for our first home, but it was going to take too long to get there and we, like you, were throwing money away on renting, setting us back further. We settled on putting 1/3 down and paying off the rest rapidly, so here we are now a year into the mortgage and 9 years into principal. Our next home purchase, if ever, will most certainly not involve a mortgage.

    2. i agree with Financial Samurai. I am below average on my savings. I earn 90k, and my wife stays at home taking care of my son. But i already achieved your financial goal.

  336. This makes more sense than CNN stat as it is being skewed due to age range. Since I am heavily into commercial assets, I’ve surpassed way over million dollars mark in total assets. I also have sizable 401(k), but my real estate portion is much larger.

  337. Your descriptions of an above average person describe me and my husband to a “T”. Your figures for an above average net worth, for our age, is exactly what we have.

    The only thing is we didn’t go to college. Our parents could never afford to send us so we started working out of high school. Maybe we’re ahead because we never had student loans?

  338. Miss T @ Prairie Eco-Thrifter

    We have two income earners and are doing ok by your estimate. We are in the above average group. Our after tax saving is not as high but that is because we pay almost 50% tax in Canada. We do have a lot of retirement savings though and real estate equity. I think we are headed on the right path as far as growing our net worth.

      1. We don’t pay 50% tax in Canada.

        Taxable income is income after certain deductions, among them the basic personal amount which is $10,527 (Federal/2012) and $9405 (Ontario/2012). Basically your first 10K is tax free.

        After that, here are the rates:
        Federal/2012:
        15% on the first $42,707 of taxable income, +
        22% on the next $42,707 of taxable income (on the portion of taxable income over $42,707 up to $85,414), +
        26% on the next $46,992 of taxable income (on the portion of taxable income over $85,414 up to $132,406), +
        29% of taxable income over $132,406.

        And for the most populous province, Ontario, the provincial rates are
        5.05% on the first $39,020 of taxable income, +
        9.15% on the next $39,023, +
        11.16% on the amount over $78,043

        So yes, we get taxed at close to 40% on salary earned over $140K, but everything below that is taxed at a lower rate. Our effective tax rates are never 50%.

        1. Got it. 29% as the highest rate isn’t that bad at all actually, even if the income level of $132,406 is much lower than ours in the US.

          The big difference is that if you have a nice $30,000 mortgage interest a year, you can’t deduct that from your income.

          It’s colder during winter too right? :)

          1. He got it wrong. Yes, there is a way you can deduct whatever mortgage interest you have from your income in Canada. I certainly have done that.

            Also it’s not the entire Canada is colder than US. I used to live in Boston, it’s no way better than Toronto in terms of coldness. Chicago is damn cold too. Victoria / Vancouver region is heaven compared to Minnesota

    1. Canada has done well. I have a real estate appraisal business and have worked in this field over 30 yrs. The real estate market will never be the same here. I am in New England. For young people it isimportant to to be fluid You are being told that you will change jobs every few yrs and have several careers. That does not create stability in a society. It is not a healthy environment. The depth of the fraud by Wall St. , BIG BANKS. Is ten times worse then you can imagine. Be fluid. Aim to be debt free asap and if you are young and adventurous you may want to look outside the ol’ USA for jobs. Things will get much worss I’m afraid. Both parties are very corrupt. Just had a seminar on this. It’s going to get worse. Oh 401Ks wereNEVER NEVER meant for retirement. Read about them. They were tl be in addition to your pension. Oh right those are gone.

  339. I will count my husband and I as one unit since we have lived off of only one income for the large majority of our marriage. We wedded shortly after our college graduation, and I only worked for one year before we had our first child. I have been a stay-at-home mom now for the last ten years (one child attends a public charter school, one child is homeschooled due to a special needs). Our net worth is a little less than what you would project for our age. We are 33 and are at about $300k. The breakdown of our accounts is quite different than what you have listed, however. Retirement is at $72k, college savings at $28k (not listed, I realize), cash at $50k, and home equity at $150k, the value of our house. (We live in the midwest, and though it is smaller than the average home, we like it). Anyway, we wanted to pay off our mortgage first before heavily investing in retirement. My husband contributed 10% to his 401(k) yearly, we made sure we had about $20k in the bank, and everything else went to the mortgage principal. At age 30, it was off our hands. My husband was making $50k at the time, but has since been promoted and is now at $80k. We have since invested much more heavily in the 401(k) and college savings for our children…while having extra money for special classes and extracurricular activities for the kids. It might not seem like the wisest choice to have attacked the mortgage first, but we wanted to make sure that no matter what happened with my husband’s job, our home would not be taken away. When our kids are in college, I plan to work (I hope to also do part-time work in a couple of years from now, too, if we are able to find an appropriate school for our oldest child.), but we probably won’t to be able to save as much during those 6 years at university, so our net worth probably won’t be anywhere near what your chart says, but I think that we’ll still be okay when it comes time to retire.

    1. Sounds good to me Renee! Seems you guys are on the right track, and the 28K for college education can be considered savings.

      How about gradually increasing that 401K contribution by 1% a month for the next 10 months and see what happens?

      1. Thanks for the advice, FS! We’ve decided to up the 401(k) by 3% for now and start paying maximum contributions into IRAs–that way at least a little something will be in my name even if I am the beneficiary on his 401(k). If something were to happen to him down the road and things and I couldn’t touch the funds due to the complications in the court system or something, he thinks it would be good for me to have easy access to some funds for a little while. We’ll try to get the 401(k) up to 10% more than what he was investing over time–this year’s activity fund for the kids has kind of exploded but I think we should be able to start adding 1% per month after the holidays. Just curious, is there a reason that you suggest on this post maxing out the 401(k) but make no mention of IRAs? Thanks!

        1. Hi Renee,

          Good work! I didn’t mention the IRA in this post b/c I’m focused on the 401K. Furthermore, the IRA is only available to people making under X amount (I think it’s around $110,000 per household), which is disappointing since I believe everybody should be able to contribute to their retirement.

          Good luck!

          Sam

      2. Jim McGarry

        All good info…..simple question, hopefully the wife is incorrect lol
        I have 60k income that is totally tax free ! I feel that it is actually near
        70,200 17% higher considering no fed, state or local taxes. also I pay no real estate taxes on my home (5,000), now I am up to 75,000.
        Is my thinking clear.

  340. I enjoy these charts, for net worth at certain age brackets etc.

    In reviewing my situation, I’m a little “behind” on the scale. And yes part of it was stupid financial decisions early on (listened to the wrong people, had the wrong girlfriend…many of us have been there).

    However, one big reason is that I spent almost my entire 20s pursuing the dream in music. I’d be 26 years old, spend my Saturday nights playing shows for free, and spending my $2k tax return on a much needed new instrument for our upcoming demo. And while a financial education would have served me greatly, at the time I was thinking, “success first, finances second.”

    And then around age 30, I spent a lot of time with startups, only this time I did have a financial education. Still, the landscape was one of working hard, for very little money, but if things took off, the sweat equity would have paid off in spades.

    It has only been recently that I really focused on current cash flow instead of laying the ground for a quantum leap. Did I sell out? Anyway, my net worth is almost 10 years behind what this chart says for my age. My “number” would be much much higher if I had walked a different path, such as a friend of mine who graduated college, went Big 6 accounting firm, wrung himself for every hour of overtime his body could handle, and within 10 years became senior management for some very large projects in Europe.

    1. Jason, but at least you pursued your dreams and had a lot of fun right?

      Is your friend happy? Because although a lot of us work hard and have a lot of stress in our jobs, many of us are also very happy.

      1. I DID pursue my dreams, and had some very good success with them–just not the financial kind.

        I am no longer in touch with that friend….we simply grew in different directions. I do know he worked himself to the bone during his mid-20s, and was developing a problem with alcoholism which he used to hang on. Later I heard he was at the forefront of a major economic expansion with some country, and became quite wealthy. Haven’t heard anything else since.

  341. I am a 52 year old, homeless, unemployed female. The conversations had here have created such a sense of dispair in my heart that it is overwhelming. The only assets I have to my name are a $320k retirement/investment account and a 1.5 acre of land assessed at $65k. I am about $10k in debt. How do I find “nivarna”?

      1. Fortunately, I do have rooms to use free of charge just not of my own. I need a plan for purchasing and furnishing a home while still maintaining a reasonably prosperous retirement fund. Got any other ideas?

        1. I don’t know about retirement “right now”, but you could make a decent start in the midwest or southern states. You obviously had a decent career; perhaps you could ply your skills in a new career where living is much cheaper. We considered Belize, on the south-eastern side of the Yucatan peninsula, but retiring to another country seemed a bit extreme for us.

          1. I realize this is an old string of conversation, but I found it alarming that someone with $320k in retirement accounts and $65k in assets is homeless.

            Fortunately, the market has grown tremendously in the last 6.5 years and I hope your portfolio has grown with it.

            Were I in your shoes at the time, assuming the land was not where I lived, I would have liquidated it, invested about half in your portfolio, the remainder in CDs/money markets (almost 0% back then) and used that roughly $65k to live off of to avoid paying fees on distributions from retirement accounts. I’m conservative, but my plan is, when it comes time to, live off of 3% of my portfolio per year, which allows it, hopefully, to outgrow inflation and absorb dips in the market. Well, 3% of your $385k would have netted you 11,550/yr. Even without growth, and it would have, that 65 would have lasted almost 6 years, which very nearly gets you to the age you can withdraw from retirement accounts without fees.

            That’s $962/month, which won’t provide much, but basic accomodations, such as a room in a low-cost area for say $400/mo. That leaves $562/mo. Again, not much, but enough to survive and pull yourself together. This money is theoretically indefinite. I wouldn’t put your money into owning a house, because that provides you no positive cash flow.

            Of course, if you had done this, your principle would have grown, despite your withdrawals. I’m spit-balling, but the market is up roughly double since the date you posted this, and I suspect you’d be up 30-50% overall if invested in an 80/20 or 60-40 portfolio while withdrawing 3%. So, at this point, you’d be at around $500k pulling out 15k/year. $1,250/mo is getting somewhere.

            Now, having said all of that, that money and any welfare should have provided the foundation to get it together and find a sustainable job that would have allowed you reduce your dependency and let your nest egg grow until you truly are eventually unable to work and must retire. But hopefully, that would be past the age that social security benefits were available to you.

            Now, there’s a lot that we could delve into, but I’ve spent a bit of time thinking about this despite the fact that neither you nor anyone else is likely to read it for some time.

  342. I’m a 30 years old captain in the Army. So far I essentially meet your average above average financial qualifications. I got started late, by your standards, at 25 years old. When I deployed for the first time as a Captain, I was able to take advantage of a $35k bonus, and the lack of bills allowed me to save a significant portion of the money I made. I caught up by investing as much as possible during that and another subsquent deployment. Now I have 86k in retirement accounts, $110 in normal investments, $16k in savings, and roughly $30k in assets. My budget allows me to save $2,500 per month. With an increase in pay from promotions and time in service, I should stay somewhat close to your charts above, though by my calculation, it’s going to take 38.800 in investments or returns between 30 and 35 to stay with you. However, I feel that I don’t really have to keep up, because military retirement as a Lieutenant Colonel with 20 years of service (age 42) is worth close to $48k/year currently and *should* keep up with inflation. The value of that retirement is comparable to pulling 4% of a $1.2 million principle. Thus, if I stay in until retirement, and have approximately 800k in investments at that time plus military retirement, I will be in a way above your templated average above average situation. I’m not sure I can stomach 12 more years in the military, but reading this type of information certainly gives me some incentive to do so. No X-factor here…. just prudent saving and the sacrifice of a 20 year military career.

      1. The wife and I retired last year with 20 years each, no kids, and no home. Trust me, it’s worth it to stick it out. Just do yourself a favor and set it in your mind now that you WILL retire at 20 years. You’ll have plenty saved, and on your pay you should have either paid off your home or saved enough to pay cash. As lowly enlisted folk who came together with debts from previous marriages about ten years ago, we’ve made about a 300K impact on our net worth in the ten years we’ve been together, going from -60k net worth to +240k. We’re 8 years ahead on our mortgage just one year into it, and we’re still saving money each month. Retiring at age 39 (my case) is not much different than at 45. Still young enough to start a new career, and financially wise enough to make it work without going back to work. Most say I should go back to work, but who’s going to watch my foxes and coyotes all night?

    1. You’re lucky that the government pays for your retirement. In the private sector, we have to put aside money for ours. Reitre at 42! Unbelieveable! I’ll be 65-70 when I retire.

        1. I knew going into it at the wise old age of 17 I was in it for the long haul, and it was quite the positive experience, at least for the first 8 or 10 years. I wouldn’t necessarily say the government paid for my retirement, but that’s just semantics. The skill set I employed and my responsibilities, even as a young Soldier, were on-par with those of much better-paying jobs “on the outside”. At about 5 years into it I was responsible for about $200M in equipment and supervised a crew of 19 technicians, on a salary of less than $20K per year. Even at the end of my career I wasn’t making much past 35k/yr, but with housing and meals covered, living expenses were pretty low.

          In my decision to serve, retirement at twenty years was second only to my desire to serve this great Nation of ours. Given the choice to do it again I’d probably do it, but the leadership climate and demands put on our servicemen are getting worse with each passing year. Perhaps being public servant as a civilian employee would be less stressful, but that doesn’t come with an option to retire at 20 years, although it does come with 401(k) matching up to the first 5% of salary.

    2. Wow, I remembered this article and wanted to see how I was doing compared to it, today. It’s been 6.5 years, and from the looks of it, I’m still between the mid and high ends of the charts. Now, including investments and liquid capital, I have ~$620k, though I consider the market to be overvalued.

      My assets are in the ballpark of $60-70k, conservatively.

      I had a setback in my career. As an infantryman, after the surge, a lot of us were pushed out, and after another civilian job, it took 1.5 years before I found a way back onto Active Duty. I still hope to retire as a LTC in 2026 @ 44 y/o, and I suspect I’ll achieve my goal of $800k invested as long as the market sustains current prices or grows. The setback was a painful thing to go through, and through my planned future into turmoil. Now, even as I expect to retire, I’ve found a way to get the Army to send me to school for my masters full-time on their, and I’ve switched from infantry Operations Research Analyst, which would make for a very lucrative post military career, if I choose to, or need to, pursue it.

      I still have no real-estate, but I would very much like to purchase a house in the near-term (2-3 years). I believe leveraged real estate is a great way to hedge against inflation while remaining primarily invested in higher returning investments. To this point, I’ve never lived anywhere long enough for a home purchase to make sense, but I have a very good chance of that in my next assignment.

      1. Yet another 2 years has passed. The market has been roaring, and I managed to avoid several declines that were exceedingly stressful to others.

        My assets broke $900k, this month. I am way ahead of the game, now. My packet for the promotion board to LTC was submitted, today. Things look positive. After 20 years since I took my first oath as a cadet, it’s hard to fathom how far I’ve come.

        While my goal was to be at around $800k at the point of military retirement, I do wonder if these numbers have been updated to account for inflation. Perhaps, the numbers make us feel good, but they might be in dire need of an update to reflect the contemporary environment.

        In any case, now is not the time for greed. I’m beyond my “number” and well positioned to reach financial independence by retirement from the Army. What an exciting thought!

        1. You have reached your goal! Whatever you decide to do now. I have found it’s the freedom that is the most valuable. Congrats…

          1. I moved away from the market and regretted it for a brief time toward the end of 2021. However, 2022 has validated my position. My investments are ~$940k, I have is excess of $100k in assets. I still wish I had real estate, but it never worked out. I feel the free loan environment passed me by. Maybe one day…

            Regardless, I am finally a LTC and fully expect to make it to retirement. I currently value that retirement at ~$1.5M, and outside of the pension + benefits, I value my current net worth at ~$1.05M. I will be financially independent, and now 80% of the way through the 1st, I must determine how to achieve fulfillment throughout my 2nd chapter. I’m very excited for the years to come.

  343. I like the info. Averages are a good simple math but distort the true story. Wages haven’t grown in decades even for the financially responsible set. This info does not calculate negative equity that many homeowners face, especially those with higher incomes because they bought homes when the market was up too. Not accounting for student loans is bad because even the financially responsible took out loans to get graduate degrees. I agree they are better off and the article displays that very well. I just don’t agree that there is that big of a difference between average and above average. Plus the older people get the more financially unstable they get due to high health care costs. A small group navigate this well but for most even the achiever’s have a difficult time.

  344. financialsamuraireader2012

    I graduated with a Ph.D. when I was 30, so I started in the workforce relatively late. I’m now 40 and am making $150K (in California) now, which is more than my peers (in age and field). When I started out, I took a job as a postdoc which didn’t pay much, but it me started in retirement savings in the university’s 403b, and now I have been maxing out my 401k every year (except two years where I switched jobs and there was a 3-4 week gap due to unemployment — would appreciate an article on how to properly max out one’s 401k in that situation or catch up).

    My current savings total $194K in 401k/403b and $152K pos = $346K total. My annual savings are $23K in 401k (my own plus company match) and $35K post. I own a small house with about $70K equity. I have 0 debt other than my mortgage (is that considered debt?).

    So given these facts and looking at your charts, I don’t know whether or not to classify myself as “age 40” or “10 years worked”. The former seems to be more consistent, except for the fact that my salary and income is on a higher trajectory than non-PhDs. The latter seems more appropriate, but obviously I will end up with about 10 years less time to work. I did the calculations a few years ago, and even at the reduced salary of that time, the commitment to the PhD seemed to be a net financial gain.

    1. You can classify yourself in either category. It depends on how long more you want to work. The chart should give you some motivation, or some comfort. It shouldn’t alarm folks unless people are seriously spending more than they make.

  345. I am 30, I own 5 houses 3 cars all 100% paid off. I went through a divorce in 09′ and only had 1 house and 1 car and about 3k in cash. 3 years later I have all of this and my net worth is $297,000.00 and growing fast.

  346. The rent vs. own discussion is interesting. There is no law that say houses will go up in value in the long run. There have been times in history they have been good to own, and times when they haven’t. Additionally, even though the return on rent is always -100%, so is the return on house taxes, insurance, maintenance. Everyone compares rent rates vs. mortgage costs.. including those three items, it’s much more expensive to own a home. For the approximate annual cost of those three, I couldn’t rent my exact home, but one that’s pretty close, and dollar cost average the amount that would have been my mortgage.
    I think the real pros and cons to home vs. apartment are non-financial. Do you want stability, or do you want flexibility? Do you want a customized living environment, or just a good roof over your head?

    1. It’s financial for sure. If you never own your own, you will rent forever. That is the true value of your home.

      Furthermore, the rental stock is inferior to the ownership stock here in SF, hence why I bought. I wanted a nicer place to live.

  347. 20's Finances

    Technically, I’m above the average, but not above your above average. ;) How’s that for a vague comment. I agree with one of your earlier comments that some of the studies about people not saving enough just gives most an excuse not to save. I like your aggressive net worth scale, but I will fall behind quite rapidly unless I start earning 6 figures.

  348. Yes, Ph.D. and I would absolutely LOVE to participate in your article! And can help you do some research too….lots of my friends are Ph.D.’s. Let me know how I can help.

    On a different post, I saw your comment in response to someone else’s comment re: that maybe you should cost-average your equities down monthly instead of constant buy/sell. You replied that you liked your method and were 5-6% ahead of the market. So my Q is: Why trade so often and pay 30% taxes to Uncle Sam instead of 15%, if you hold for a year or longer?

    I’d like to hear from others regarding their trading strategy and how much they make day trading vs selling after making X% profit vs staying long in a stock.

    Me, I prefer to be long in most stocks as I think you make the maximum this way and also dont get “hit” by daily fluctuations. But I also like to trade now and then if I have made >10%.

  349. First timer. And want to say that I LOVE this site!! Have already learned a lot and have also very much enjoyed the comments of all. GREAT site!

    Based on the number of years worked, I’d say that my net worth is higher than that listed, in all categories. I’ve been lucky, but have also saved like mad. Like you, Sam, I dont order soda when eating out and almost never buy anything unless its on sale, online and further discounted via coupons. On the other hand, if I really like it, I will buy it. But my needs are few and very simple.

    Would like to comment on whether you should sell your house. No, you should not. Market is not right and you will not get top dollar. Besides, you seem to love your house, so why not enjoy it? Its better to own than to rent, and as you said, a rental won’t be as nice as your house. Wait a few years, let the market come and then sell at top dollar. We kept our first house and are glad we did.

    Another thing you can do: Rent a place for a few months and see if you like it. That way, you can always change your mind and go back to your house. Even better, rent out your house for a month and go rent an apartment in Paris for a month!!

    1. Welcome Ash! I’m testing the real estate market now and asking a price where I think the house will trade in 2-3 years time. If there is no bid, then I won’t sell since I just refinanced.

      On sabbatical now, so looking through all options!

      What do you do? Cya around!

      1. I dont think that a 2-3 year time projection is enough. I think the market
        will rebound very strongly only after 5 years. Meanwhile, the price will only
        go up. You have to stay in your house at least 12 years or so to get back
        any sort of “serious” money and to allow for market fluctuations.

        But there are several ways to monetize your house….rent out your
        basement if you have one. Or rent out a room to a grad. student [they
        work a lot and wont mess up the room or be too noisy], but this comes
        with privacy issues. If you have the space, put an addition to the house
        and rent that room out.

        btw, in another post you had talked about making money/income on
        the side. I really liked your ideas! Like you, I spend a LOT of time thinking
        about ways to make extra cash without killing myself! Its great fun! I
        actually did make a little money [6k] selling my paintings, but it was also
        difficult to let go of some of my art…

        Oh, Im a professor and I teach and do research….and I love it so much
        I doubt I’ll ever retire!! I’d go NUTS if I retired as I would not know what
        to do with myself. I NEED to be engaged and I love being stressed!!

        1. Very cool that you are a professor. PhD perhaps? I have a post on PhDs coming up, which you might want to participate in!

          Housing prices went down about 10% in SF but are marching back up to peak levels again. We’ll see!

  350. @PK

    I also think the “above average” person would consider graduate school in a professional area such as law, business, accounting, or medicine. This doesn’t account for non-undergraduate student debt. I agree that this person would catch up by 35 or so but the 20s are often about paying down debt fast.

  351. Script for Money

    Interesting analysis. My first impression is that this seems a little high for the average person. It would also make sense to break this down to location. I would imagine you would end up with a higher net worth in a larger city or more expensive city. Even though your costs are higher, you would have a higher salary and a more valuable asset in your home. In the mid-west, an $85,000 salary would represent someone who is doing very well in most cases.

    Thank you for putting in the time to analyze this. Very nicely done.

  352. I have generally found your numbers to be high relative to my world. Having a non-working spouse with student loan debt has not helped. But my kid gets the kind of attention we prefer. I can’t pin all the financial lags on her as I had no 401k contributions for an 8 year period and my first 10 years I did not come close to maxing out.

  353. I had a substantially longer than average education due to grad school. Bottom line is I’ve only been in the work force for not even 4.5 years. So by age, I’m way behind. But by years worked, I’m on point.

  354. I’m 34 and I have a net worth of $220K, about 80$ in stocks and rest in cash. I also own a home which is paid off and it’s worth about $100K. Since the cost of living here in Romania is about half of the one in US I could say I have a net worth of $640K. My wife is a stay home mom, but she is also managing an online business we have. Looking forward to double the cash and stocks portion of the networth in the next 2 – 3 years.

  355. Hi Sam,

    Thanks for your keeping your blog for so long…I’ve enjoyed reading your posts.

    There are definitely exceptions about your comment on renters versus homeowners, namely myself. I’m happy where I live for now and I pay 600/mo or 7200/yr to stay in a nicer area of town. Granted, I am living in Texas so cost of living is lower and I have a roommate.

    However, if I were to buy a home, it would likely be at least 250,000 which can get you quite a bit in Texas. With a 250,000 home, I would pay roughly 6500 a year in property tax alone! That is 250,000 x 3.5% property tax rate (totally realistic here in Texas) x .75 (tax deductible) = 6562. On top of that, I would have to add mortgage interest, home owner association fees, property insurance, maintenance/repairs, vastly increased utility bills, and I also have to fill the home with all that square footage.

    I would say I’m very disciplined in my saving habbits (about 65% after tax savings) and all of my money saved from renting goes towards investments. My point is, in Texas at least, it can make sense to rent sometimes because there is no state income tax and I am able to avoid high property taxes – something that probably infuriates you, sorry.

    For background I am 23 yrs old, no debt. I have 3 rental homes, 65k in taxable stock accounts, 28k in IRA, and 45k in cash (trying to acquire 2 more rentals this year). I feel extremely lucky to be in this position due to being blessed with a high paying job out of undergrad (100k+), and also an inheritance of 90k tax free last year.

    1. 3.5% in property taxes is ridiculous! It’s “only” 1.17% here, however prices are 5X more.

      $600/month rent is cheap. How did you amass 3 rental properties so soon?

      Also, you should definitely share your story about making $100,000 right out of college. I’ve been telling people on this site for years a lot of people make a lot of money, and there still is so much disbelief.

      1. I’ll share my story and hope it will help anyone reading this who may have kids in high school. This is a long post, sorry in advance.

        I studied way too much in high school but as a result, I graduated top of the class and had options for college. I ended up choosing a state public college for the following reasons:

        College credit – I took so many college credit courses in high school that I essentially started college as a junior. Most top private schools won’t accept any credit because it’s not good enough for them I guess…As a result I could graduate college in 3 years and save a year of expenses and time. Advice is to take as many college courses as you can while it’s free in high school.

        Price – Tuition cost me 8k a year for in-state tuition. Private tuition I was looking at would have cost me 30k a year. Also, state schools are willing to give A LOT more scholarships. My parents were middle class meaning they were too poor to be able to pay for my college but too rich for me to get any freebies from the government. FAFSA (student aid) and federal grants are BULLSHIT a lot of the times because they give money directly to students instead of the institutions. This means a lot of the grants meant for school get squandered away through Macbook Pros, fancy apartments, etc.

        In the end, I was able to graduate a year early (age 21) with a starting salary of 90k with 20% bonus with extremely generous benefits. One large caveat to my story is that my major was petroleum engineering. There is a huge demand for petroleum engineers right now. It has ultimate job security even in these rough times. This is a result of oil and gas companies not hiring anyone in the 80s and now they are screwed because everyone is retiring with no one to replace them.

        My story would’ve been completely different depending on what major I chose. Looking back, I was lucky again to have chosen this because quite frankly, I didn’t know what the hell I was doing in high school or even why I chose this major. I definitely believe college is an investment and should be treated as such. Some majors give a lot better return on your money than others.

        As for my ability to have 3 rental homes, I have been in the workforce for nearly 2 years now so I’ve had time. I put down about 15k per home to gain control of them (100-140k homes). Sort of complex so e-mail me if you’re interested in details. It involves creating equity from the start of the process and seeing about 250-300/mo cash-flow until you’re ready to sell. Can’t count on appreciation here in Texas.

        I do have a question for you though. I don’t contribute to my 401k because I am interested in cash flow more so than ultimate net worth. I don’t hate my job but would love to accelerate the time it takes to live off of income producing assets. Thus, I would rather have 70,000 generating cash flow that I can live off of NOW rather than having 100,000 generating cash flow that I can’t touch until I’m 60. Furthermore, the returns I’m seeing in real estate are so much more than my 401k. I’ve been back and forth so many times, am I being crazy here? Could you ever justify not contributing to your 401k?

        Thanks

  356. 32 year old renter from your area, Sam. I’m over $650K. Mostly from savings, as opposed to appreciation.

  357. I think these are very realistic numbers for those of us who went to college and have normal spending habits. I’m in my 40s and am around $1.3 million.

  358. I’m a 29 yr Software Engineer in NY(moved from southwest a few months ago).
    I’m still well below the 240k of net worth(my net worth is hovering around 140k).
    Most of it is from 230k house with 180k loan back in the southwest.

    I’ve had the same thoughts you posted about home ownership vs rental. I have been thinking that I should buy a condo/coop around NY area(I’m currently renting for a year to see if I like NY), but the shear cost of purchasing a shoebox still intimidates me(comparing to the space v cost from southwest). What do you think? Should I wait another year or so to purchase in the NorthEast?

    Thanks for your inspiring blog!

    1. Buying a home is a gamble on your longevity in one place. When I bought my first property, I knew with 95% certainty that I would be there for 3 years, and 80% certainty for 5 years given I had to finish my graduate degree.

      If you see yourself there for 5 years or longer, I’d buy.

      How did you find my site by the way? Always curious to know. Thx

      1. I found your blog while trying to search for an answer on where my 401k should be around at my age and profession. I think the search landed me on a very detailed post with clear numbers. It inspired me that I need to save a lot more =D

  359. One observation in the table… at age 55, total net worth is about 1.5M, going up to 2.0M at age 60 and 2.5M at age 65. If we have a lost decade like the 2000 – 2010 period it will be very hard to achieve that rate of growth… savings along won’t create that much growth.

    It goes to show that once you accumulate a lot of money you have to be careful where you put it… if you can put it into a rising market that is a bonus but if not the case you can come up short. Timing is everything…

    -Mike

  360. Damn, I’m well below the average as well.
    Even with a property under my belt, I’m still under the $239,000 / 30 Yr Old avg.
    Never the less your post is very interesting Sam.
    Somehow though the numbers you present are in the ideal world, there are way too many variables for a 30 yr old working for 8 years roughly to achieve that net worth. Doable? Absolutely, but one would have to come out of college with virtually no debt, which we all know that in today’s day and age is pretty tough.

    1. There certainly are a lot of variables Eddie. I bake in practically 0 returns on property and savings for all these years to account for the good and the bad.

      Yes, student debt is a big one, hence why I added an 11th point in the post to address.

      1. Yes you did address that Sam. One thing that particularly stands out for me in
        terms of building wealth is that as a single household income, my wealth building
        income streams are x3. I think the days of a single income, and getting ahead
        are slowly diminishing.

  361. Kris @ Everyday Tips

    Darn, I am not an above average person!

    Also, I have often wondered, are these charts for a household, or individual? My husband and I have always just lumped all our money together, except for 401k contributions obviously. Since I am 44, should I solely have a net worth of 891k to be above average? (And my husband also have 891? Or did you explain that and I somehow missed it?) If that is the case, I would probably be qualified more as a ‘substandard person’.

    Very interesting post Sam.

    1. Defining a person is somewhat subjective. It depends on how strongly you believe in your marriage. A person is a single person before marriage. If you absolutely know for sure that your marriage will last, then you can treat your marriage as a person too. Just be prepared to divide the assets up in case anything changes.

      At 44… an above average married couple if defined per person is closer to around $1.4 mil.

      1. Kris @ Everyday Tips

        Well, I will have to accept my substandardness! :) However, I would not do anything different. I still would have stayed home with the kiddos and chosen private school. At least I am not a drain on society. (yet :) )

  362. Edward Antrobus

    I am 30 (well, 31), but between taking 5/6/10 (depending on what accounting system you use) years to graduate college, and being unemployed & underemployed for the last 3 years, I haven’t been in the workforce for anywhere close to 8 years. I’d say more like 4 years of working for somebody else and 2 years of eating my savings while trying to make a go of working for myself. And saving $50-85k? That’s more than I’ve personally made in my life.

    If we ignored when I was born, and worked off your charts, we would guess my age to be about 23-24.

      1. Edward Antrobus

        Well, as my construction job winds down, I’ve been putting out feelers to get a job, or at least an internship with a geotechnical firm. My degree is in physics and earth science, but I managed to graduate without any meaningful experience, so I’ve been having trouble actually getting my career started.

        Once I actually get started, I will go into high powered debt repayment and saving mode.my wife and I are paying debt and doing some savings, to the tune of a little over $10k/yera. With a “real” job, our combined income could go up anywhere from $20-40k per year This would allow us to pay debt and save at 2-3 times our current rate.

  363. Nunzio Bruno

    I loved the X factor you described. I’m 27 now and probably closer to the 25 year old you described so I’m a little behind but not by much. I’m hoping that in the next few years my X factor will continue to push me forward and not only meet but exceed these figures. I like how you described it as being more than just some get-quick-rich-scheme because it really is. Everyone has ideas about fast money but to be successful the focus should be on sustainability and building wealth.

    1. I think there are wild swings in the first 5 years, but things start smoothing out the older we get. Perhaps it’s because we make more, want less, or appreciate more as we age.

  364. Marcus Lewis

    Sam,

    We’re 51 and 50, both with good jobs living in the NE. Sent 2 kids to private college for 4 yrs each (both kids have some student loans, <$20k, so they'd have some skin in the game). We consider ourselves savers, but those kid raising years really are expensive. That been said, we're right in the middle of the range for pretax savings, trending towards the high end of the range for after tax savings and over the top for the HE (we have a vacation home).
    Seems like we're headed in the right direction, thanks for the charts and comments.
    I enjoy your blog, seems like you're absolutely headed in the right direction at a young age! Congrats!

    1. Hi Marcus,

      Thanks for sharing your perspective and info as a couple in their early 50’s! I do not know what I do not know since I’m not that age yet. However, these ranges are based on what I think are above average net worth ranges for above average folks.

      It’s good to hear you guys are buttressing the data!

    1. Being content to be “just okay” does not describe American people.

      It seems strange then, how suprised the above average Americans are when people of average means say things that represent an average American’s life. Ex: “I went to college but then the economy went crabwise and now I work at McDonald’s and have no safety net if my car gets crashed.”

  365. I appreciate your bullishness on leverage. I’ve noticed we’re always more bullish when we are younger, and then after years of experiencing up and down cycles, we become less so.

    I hope creating wealth really is that simple and that you accumulate more than your wildest imaginations.

    1. You’re saying things are easy to spot and investing is easy, yet you’ve barely seen one cycle.

      If things are that easy, then you should be wealthy by now don’t you think?

      You have good comments. Just make sure you put things in perspective. Things are NOT as easy as you think. And if you think things are easy and have the audacity to say being wealthy and investing is easy, then you better have the financials to back it up.

      Take my advice and be more low key with your words on investing. If not, I guarantee you that your interviewer will slaughter you and never give you a chance. Or not, and continue to rebel against the very gatekeepers that decide on letting you in or not.

    2. Good man. Being more low key, especially about making money in the markets is a very smart idea when talking to others. EVERYONE in the business has lost money before, and coming in what a cavalier attitude that you never have and are a genius will lead to an instant pass.

  366. Casey Berman

    A nice structure and guide to reference, that can be tailored to our specific situations. Thank you.

  367. Most homeowners were renters once.

    You just have to do the calculation over TIME. What is your return on rent after 30 years besides a place to stay? The return is -100%, and you will have to keep on renting unfortunately.

    1. It’s just accounting. You have 20% liquid in cash, or 20% in your property.

      Even through all the ups and downs of the past 10 years, I wish I had invested more in real estate in SF and elsewhere. The cash flow is very good, and thanks to inflation, a fixed or lower rate, things get better practically every month.

      To be able to own a home, or several homes free and clear when you’re retired or decide to do something else is an amazing feeling.

  368. Good point on student loan debt. Would it be safe to argue that the above average person got scholarships, help from their parents, and worked jobs to lessen that debt level or eliminate it altogether?

    I guess I could subtract $20,000-$30,000 due to debt in all the columns, but it doesn’t really make a huge difference towards then end.

    1. If you went to Harvard and didn’t get a scholarship, you would by definition be above average out of graduation and probably get a waaaay above average job and income no?

      1. Not necessarily. This is unrealistic for the average American, by far. There is a student debt crisis that was ever present even when this article was written 5-6 years ago. According to Forbes and the Fed, student loan debt in the US has reached 1.3 trillion, with the average student in the class of 2016 having $37,172 in student loan debt at approx. 6% APR. Figure that that into your average net worth scenarios, and then we’ll be seeing true average representations in this article. Otherwise, it’s not a representation of the average middle class.

        1. @Michelle

          The article is not supposed to be a representation of the average middle class person. The article refers to “the Above Average person” and Financial Samurai goes on to define what that means in his article. There are plenty of above average people who have no student loan debt because their parents paid for their schooling. Of course the average person probably has debt, and a number of other factors may make it more difficult to have a net worth as per this schedule… However, for the above average person, I think he’s right on. I am well above these figures at 48 years old. I went to a SUNY (Binghamton) and had student debt at graduation, and I don’t meet all the criteria with lower middle class parents, who were unable to help me much financially. I was well behind the figures in my early 20s, but my net worth grew with the start of my own business, real estate investments over time, and with the bull stock market of the past 8 years… I know many of my peers/friends from SUNY B are also well above these figures, so I will argue that it is a good benchmark for the above average person… You don’t need to feel bad or be angry if you are way below these figures. My parents are still way below these figures, long retired, in their late 70s/early 80s and they are doing just fine.

          I think the article serves it’s purpose of giving the reader a benchmark for where you can be financially in an above average situation, NOT in an average situation…

        2. @Michelle,

          It’s not meant to be representation of the average middle class. It’s meant to be about the above average person as defined in the article.

          I am well above the figures at 48 years old.

          I went to a SUNY (Binghamton) and had lower middle class parents who could not afford to give me a lot of financial aid, so I had student debt at graduation..

          I was certainly below the figures in my early 20’s, but my net worth increased over the years with the start of my own business, real estate investments, and the bull run of the stock market the past 8 years…

          I think it’s a good guideline and lets you know where you could be financially as an above average person. Most of my SUNY B peers/friends are above these figures (in my estimation) as well, so I think the figures are very attainable for the above average person…

          You don’t need to be upset if you are way below these figures. My parents are way below these figures, in their late 70s/early 80s and they are doing just fine.

          It’s intended as an informational tool, and I think enough people have responded positively to tell you these are not unrealistic figures for above average people, who are focused on building wealth.

          Now if it were written about the average person, then I’d agree that it’s way off.

          My figures roughly
          $2.6m real estate
          $1.5m stocks/liquid investments
          $0.5m 401k
          $0.2m bank

          48 years old, married with 2 kids.

          1. That’s great, Mark, but your assets in NY are probably double or more, at 2% of the nation’s. Yours would not be representative of the needs of most Americans, by far.

    2. Gen Y Finance Journey

      You can major in art history at Harvard too. Not everyone coming out of an Ivy League school gets an Ivy League salary.

    3. I feel the inclusion of help from their parents in the above average person’s financial plan for college is a little odd. IMO the above average person would not need help from their parents, certainly not a luxury I had or would change because it made me the financially conscious person I am.

  369. I am about 30…I am much higher in some categories and much lower than others. I think it is pretty aggressive to assume maxing out of a retirement account at 25 especially considering the recent study that said most 50 year olds have less than 100K in retirement accounts

    1. I think you can max out your 401K after 3 years of working, making $50,000 a year if you really wanted to Evan.

      I don’t care about studies of 50 year olds having less than 100K. That’s just an excuse to make people feel better about not saving.

      You want to be a 50 year old with less than 100K?

  370. I am 38 but have a NW (me and DW) that is greater than the age 65 category for this post… I think it depends on the type of job & career you can make. Living in a low cost of living area is a big bonus as well.

    -Mike

      1. Have been to some extent.

        Relative to annual expenses I donate about 50% to charity, plus family.

        -Mike

        1. Naah, I’m not going to bet against Obama. As Wesley Snipes said (in demolition man???), always bet on black…

          -Mike

  371. I’m on the low end of the 401(k) for my years worked (2), but I only started maxing it out after I’d been working for 10 months and that amount went to after-tax savings instead. I’m years ahead in after-tax savings though (closer to about 8 years worked) and I would guess that my net worth is around 5-6 years worked from your chart.

    I am renting now and banking plenty of money while doing so. I don’t know when in the future I will buy necessarily, but I probably will at some point in the next ten years. In the meantime, I’ll just continue growing my net worth.

    I’m definitely ahead of my age bracket though.

  372. As a 65 old person, I am in excellent shape, if I include the fixed portion of my retirement into the equation. I calculated the equivalent based on a 5% return. I think that is conservative since there is a built COLA and lifetime medical. This is what early planning does for you.

      1. Unfortunately, I need to teach just a little longer (approx 5years) to vest for full retirement and receive lifetime medical. I am putting off taking Social Security until I turn 70 years old to max that as well. Although teaching has changed with my new assignment, I looking into changes there too. 5 years is a relative short time to nirvanna. Things may change in the next few years, but I am prepared for retirement and other opportunities.

  373. I am a bit behind for my age bracket and a lot of that is because I didn’t start contributing to a 401k plan for several years after I started working and had a low salary out of college. I think I’m doing pretty good now though and think I meet your 10 point definition for an above average person for the most part. It’s definitely a good kick in the pants for me to keep working hard and to keep saving as much as I can looking at all the cool tables you put together!

  374. Another great post!

    I’m 29; net worth = $340k; home status = own.

    I have about 180k after tax saving; 110k retirement (401k & roth);50k home equity. I’ve been very fortunate to graduated from college without debt (combination of scholarship & working 30+ hours/week for 4 years), above avg. job for my age. At the same time I’m very discipline with my personal finance (considering myself an above avg saver), made a lot of sacrifices.

    My goal is to increase my passive income revenue stream. I attempted couple business opportunities but no real return so far. Any helps, recommendations, leads are greatly appreciated.

  375. Jacob @ iHeartBudgets

    Based on the above chart, I don’t rank at all! I don’t have a real appraisal of my home, but based on Zillow, I am negative (though I think an official appraisal would put us about dead even). I’ve only got about $15k put away in retirement savings (I’m age 26) and about $20k in cash-savings. My net worth on my Mint account says I’m at about -$30k. I have some work to do!

      1. Jacob @ iHeartBudgets

        I’m hoping so. After reading some of your posts on investing and retirement goals, I can’t help but think back and wonder what life would be like if I had made my money work for me instead of blowing it all. But I am definitely motivated, that’s for sure.

  376. Michael Crosby

    The X Factor really jumped out at me. That’s it. That is why LBYM is so important.

    ERE mentioned something like this awhile ago: Imagine someone has $200K in debt and another has $200K in assets. One has to pay 6% interest while the other gets 6% interest. Both make $50K/year. The one in debt has now $38K, while the asset person now has $62K.

    While one is worried about making payments, the other is free to explore the X Factor you mentioned. Never thought about that, but how true. That’s why even if I have a lull in my incoming monies, no bother, tomorrow’s possibilities are real.

    1. Good points. When money is working for you, you don’t have to worry about it. I’m looking at the structured notes to invest so I don’t have to worry either knowing at the very worst, i’ll get my money back.

  377. That will depend heavily on the individual. I definitely believe that on average, homeowners are wealthier than renters, but not necessarily because they are homeowners. I am a renter, but I own three rental homes as well. At this stage of life, it’s easier to rent an inexpensive, small house where I don’t need to worry about maintenance and don’t feel compelled to upgrade and then pour all savings into buying more cash-flowing rentals. Basically, a person can be a smart renter or a smart homeowner – both involve assessing your needs and your budget and sticking to both.

  378. JW @ AllthingsFinance

    It’s sad, but your average net worth numbers in the beginning are pretty accurate. I work with investors everyday and what I see scares me. Many retirees are sitting on less than 6 digits. As you’ve talked about in a previous post – I suppose they’re all betting on social security.

    My net worth is slighty below what you’ve listed but only because I have snatched up some real estate during this amazing opportunity (low rates and prices). Currently, I’m renting the homes out while I await a housing recovery. During that time, the renters are paying down my principle while I reap the tax benefits.

      1. JW @ AllthingsFinance

        I’m a principal of an OSJ (office of supervisory jurisdiction), so I have to approve all accounts, trading activity, etc. One financial aspect I can’t see is housing. I’m assuming and hoping that most of the retirees have their home paid for in full. If not, I don’t see how they could live on Social Security coupled with their meager IRA distributions.

        I believe that the main contributing factor was the lack of retirement accounts in the 70s and 80s. Most large firms did not offer 401(k)s until the mid to late 80s. Pensions were also more common than they are today.

        1. Gotcha. So actually, they could have a $500,000 house fully paid off at least right?

          Also, a pension paying just $50,000 a year for 20 years is worth well over $1 million. Hence, we shouldn’t be too concerned right?

  379. I’m not doing too well by these standards, but I have only recently begun to take control of my finances (instead of having them control me), and I am still sort of young, so hopefully I can catch up. I like what you have written about passive income streams and I am trying to find my niche in that area.

  380. From Shopping to Saving

    By your estimate, I’m almost at the average net worth for a 24-year-old. Of course, going back to school and taking out loans will drop me down all the way to negative :( Hopefully I can get back where I want to be (by the standard of your chart) after I graduate… Ahhh, this is making me nervous. By that time I should have property though, so we shall see how that works out.

    1. A snapshot of property is just accounting… but over time, property becomes an important part of your diversified portfolio. Are you living at home or finding a new place during law school?

  381. retirebyforty

    Is this per person or family? What if we have two income earners? We are doing ok by your estimate. The after tax saving is not as high, but our real estate equity made up for that short fall. I was too aggressive with my stock market investing and I think that hurt me in the long run with the schizo over the past 15 years. I’m not comfortable sharing our net worth yet and I’m curious if many people will share.

    1. “The Above Average Person”… however, I recognize things change in life and people get married, quit their jobs, be SAH parents etc. Hence, it depends on one’s definition of person and the union of marriage. If marriage = one person, one and the same, then this can be for a family.

      I encourage everybody to look as these number from an INDIVIDUAL standpoint because it’s: 1) more conservative, and 2) bad things happen with marriages as well. Got to count on yourself and hope for the best.

      1. Joe @ Retire By 40

        That’s true about marriage these days. We are still ok from the individual standpoint because we are both savers. Once I leave my job, it will be a lot more difficult to stay with your curve, but that is expected.

      2. I suppose all the above average people don’t plan on having children? Or living to 93 years old?

        Is 2 million enough to live 28 years If invested correctly?
        Sure, own a small apartment, don’t develop any health issues, don’t spend money on pointless things, and hope inflation doesn’t get high. (23yrs x ~3%=69%) Assuming you don’t have a recession, despite them seeming to happen every 30 years, won’t they cost of living increase anyway?

        Does all the above sound like an average life?

  382. Shawanda @ You Have More Than You Think

    Where I live, I think a responsible renter can accumulate a higher net worth than a homeowner easily. Home prices in the DC area are ridonkulous. If you invest – I mean really, invest and not blow – the amount you save by renting instead of owning, you should be able to come out ahead of the average homeowner. Later down the road if you wanted to own a home, you could just move to a lower cost of living area, pay cash for a house, and have a more diversified portfolio of assets.

    1. The question is, have renters, or people in general shown enough discipline to consistently “save the difference” and invest?

      The monthly temptation to spend is difficult to overcome….

      1. Shawanda @ You Have More Than You Think

        Not for me. If your plan is to invest the difference, then you execute on the plan. I know a lot of people don’t follow through, but they’re just trying to sound smart while simultaneously being mediocre money managers.

          1. I am a renter and invest the difference. I’m 27 but line up just over your 25 y/o benchmark. By 30 I expect to be somewhere around 200-230 depending on returns, extra saving, ect. I’ve crunched the numbers and with my median income it would be impossible to save as much as I currently am with the housing prices in my area (Boston). I know people who have property tax bills of $10,000, combine that with $10,000 in interest, a couple thousand in extra utility bills, a couple extra thousand in upkeep/furniture/insurance/ ect. and you have a pretty crappy investment. There are definitely locales and situations that would make home ownership make sense but blindly labeling it as “responsible” would be like suggesting a whole life insurance policy was an “investment”, sure you get returns, but are they really good?

            1. I am really late to the game but I don’t necessary agree. If you don’t buy a million dollar house then your property tax won’t be 10k. I currently own an apartment in greater Boston area. I bought it a bit more over 500k and right now its estimated to be a bit below 700k. Because I live in my property I got 2000 dollar tax exempted so my property tax is only 1500. Plus the rest is tax deductible. I put a big down payment so my monthly mortgage payment (payment + interest + property text) is 1800. If I rent my place the rent is about 2600. My hoa is about 300 and it includes heat and water and garbage. So my additional utility is really just electricity which is about 50 a month. You have to pay electricity even if you rent. My friend got a place 4 years ago for 400k and similar story as me. 3 years later they sold it 50% more than their original price and was able to purchase a bigger place a little further but still in the city.

          2. I made $1.2 million as a renter/investor. My rent was $1000/month for a private 1-bedroom apartment vs $2700/month if I would have bought something slightly larger in my area. The opportunity cost of that difference played out over 15 years made all the difference.

            1. That’s great but I don’t know how good $1.2 million is without context. How much would you have made buying the same condo years ago plus investing in the stock market? They aren’t mutually exclusive.

              A lot of people move on with their lives and live in a nicer places after college. I don’t know many couples or families still living in a one bedroom condo after college.

              After selling a property in 2017 I bought in 2015, my $315,000 downpayment turned into $1,788,000 after all fees and expenses. It was the easiest money I’ve ever made, just living in it and renting it out for several years.

              How old are you and do you live by yourself?

            2. A big concept about renting for the long haul that people don’t quite grasp that they are actually have a lot of debt. The debt is “off balance sheet” in the form of an “unfunded future rent liability”. Since rents increase over time…its a growing problem. In equity research on retailers that lease all their stores, analyst often put a figure 7x -9x annual rent as the amount of debt the firm really has.
              To be fair to the renter. They could over come this liability with an solid amount of investment gains outside of real estate that offsets the liability or inherit a property from mom and dad that they can live forever.
              On the flip side,, people who own a house with no mortgage don’t grasp the concept of owners equivalent rent. As an example, perhaps the house you live in that is worth $1MM would rent for $5/month in nice neighborhood in Boston. The family that owns the house and lives there gets $60K a year in owners equivalent rent or 6% rate of return on the $1MM of value they have in the house. …only takes 16 years in rental value payments to own the house for all time.
              Let’s say the family moved away and rent the same house to someone for $5K/month. That renter would have to make in w-2 income at least $6500 to pay the rent (taxes take a bite) or $78K per year…and the end of renting the have nothing. This is why owners of long lived appreciating assets get wealthier than people who don’t own the same assets.

          3. I’m a renter, I’m 36. The cost of a condo where I live is 500k. The property tax on that is 10k(2%) approx. The condo fees are around 400$ a month. This is around 15k total. My Rent is 18k. The difference between owning and renting is 3k. At the bottom of housing crisis it would have been great to own a condo that was selling at 200k,but now it does not make sense to own. I have saved 1.2mil including all my accounts(330k in retirment). Now I could just put that 1.2 mil at 3% CD (would not be terribly bad). My friends making the same amount as me bought homes and there cost of living is 20k higher than mine.
            With the new tax laws I dont think it makes sense to buy.

    2. I really fail to understand your high contributor column to 401k retirement accounts.

      You went from 25-27 to 100k-200k. So if maxed at 18k for those 2 years you’re at 136k but by age 27 you’re at 200k. Huh? That’s a return in 2 years of about 47%.

      From 27 to 30 you went from 200k to 350k, again 3 years @ 18k deposited is 54k, so 350k NAV from 254k is 38%. Again uhhhh how? You yourself took the conventional ROR of a traditional 7-8%. So how you are earning all this massive compounding I don’t know. That kind of out-performance while possible of course is completely unrealistic, so I really need to hear how you got to those numbers.

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