The Average Net Worth For The Above Average Person

The average net worth for the above average person is largeEverything is relative when it comes to money.  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 given all our 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 of the above average person!

According to CNN Money 2014, the average net worth for the following ages are: $9,000 for ages 25-34,  $52,000 for ages 35-44, $100,000 for ages 45-54, $180,000 for ages 55-64, and $232,000+ for 65+. Seems very low, but that’s because we use averages and a large age range.

After a 13% rise in the S&P 500 in 2014, surely the average net worth has increased even further for 2015.

The Above Average Person is loosely defined as:

1) Someone who went to college and believes grades and a good work ethic do matter.

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

9) 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.

Now that we have a rough definition of what “above average” means, we can take a look at the tables I’ve constructed based on the tens of thousands of past comments by you and posts I’ve written to highlight the average net worth of the above average person.


First, we must highlight what the average tax-deferred retirement savings plan is for those in America. We’ll focus on the simple 401K system we have here where one can contribute $18,000 of their pre-tax income every year in 2015 (was $17,500 in 2014).

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.”


401k Savings By Age Potential

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, and continue on without fail until 65.  The low and high end account for 0% to a relatively conservative 5% constant rate of return.  Of course you can lose money and make much more if you are good and lucky.

This chart does not take into consideration any after-tax savings post 401K contribution. To understand what the average after-tax savings rate is post tax-deferred retirement contribution is a gargantuan task because there are too many assumptions that are debatable eg. income and after-tax savings rate post maximum pre-tax retirement contributions. That said, I’ll offer a base case guide anyway.


Financial Samurai Post Tax Savings Guide Chart

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. Finally, the chart should show you the power of consistency.


A 2010 study showed that the average net worth of a homeowner is roughly $200,000, or 40X greater than the average renter’s net worth of $5,000. We can debate the merits of this study (done by a real estate association of course) all day long (demographic sampling, housing price changes, etc), but the point is, “above average” people generally all own homes and are wealthier, be it 2X wealthier or 40X wealthier than the average renter.

The return on rent is always -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 $221,800 while the average home price is $272,900. You can’t get anything livable in San Francisco, New York City, Los Angeles, and maybe even Washington DC and Boston for $250,000. But, you sure can in the mid west for $250,000.

Hence, let’s construct an equity value chart of something based on a range of $250,000-$500,000, with the assumption that upon retirement, you have your house paid off and can attribute this amount into your net worth, or the capitalized value of all rents you would pay if you did not own.


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 and have 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.

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. It can be calculated as the present value of those future rental payments, or simply the market value of the home. I assume zero price appreciation on the home to keep things conservative and no extra payments to accelerate the payoff either.

Home prices have historically returned just a bit above inflation every year e.g. 2-3%. But given the above average person puts down about 20%, the 2-3% returns suddenly turns into a 10%-15% cash-on-cash per year. 10-15% compares favorably to the average S&P 500 return of roughly 8%. Add on the tax benefits for mortgage interest deduction and owning a home through a mortgage becomes very beneficial for higher income earners.


So far, we’ve touched upon pre-tax savings, after-tax savings, investment returns of 0 for those savings to remain conservative, and real estate. You need to spend less than you earn for that inevitable day you no longer have an income. You also need to live somewhere, hence, you should own your property if you know you will be there for much longer than 5-10 years.

There’s something missing in all of this, and that something is what I call the X Factor. 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. It’s hard to quantify what that X Factor is for the average above average person, but it’s there somehow through music, writing, athletics, communication, entrepreneurship, hustling, and so much more.

The great thing about savings and real estate is that the process is highly automatic.  If you implement the plan and wake up 10 years later, you will inevitably be worth much more provided you keep your job and your home.  Given savings and building equity in your home over the next several decades is largely automatic, the X Factor comes out because you have so much more free time to do something else!


I have gone ahead and averaged the averages for pre-tax savings, post-tax savings, and real estate equity progress in the spreadsheet below. The pre and post tax savings can be invested however you see fit and is a topic of another post. Another thing to note is taxation, given pre-tax savings have to eventually be withdrawn and taxed. Again, these are rough estimates to give you an idea of the average net worth of the above average person.

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

There you have it! Based on my assumptions above, the average net worth of the above average 30 year old is around $250,000. By the time this person is 40, his/her net worth should climb to around $660,000 and all the way up to around $2,180,000 million by the age of 60.

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.

Of course some of you above average Financial Samurai readers will have a total net worth much higher than the chart. But then, I’d have to write another post entitled, “The Average Net Worth Of Financial Rockstars!”

Recommended Actions For Increasing Your Net Worth

* Manage Your Finances In One Place: The best way to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts on their Dashboard so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where my spending is going. You also get your net worth amount sent to your inbox weekly.

One of their best tools is the 401K Fee Analyzer which has helped me save over $1,700 in annual portfolio fees I had no idea I was paying. You just click on the Investment Tab and run your portfolio through their fee analyzer with one click of the button. Their Investment Checkup tool is also great because it graphically shows whether your investment portfolios are property allocated based on your risk profile. There is no better free online tool that has helped me stay on top of my finances more than Personal Capital. It’s important to aggregate all your accounts to get an entire view of your net worth profile. It only takes a minute to sign up.

* Check Your Credit Score: Check your credit score at least once a year given the risk of identity theft as well as the importance of having a good credit score when borrowing money, apply for a mortgage, and applying for a job. For over a year, I thought I had a 790ish credit score and was fine, until my mortgage refinance bank on day 80 of my refinance told me they could not go through due to a $8 late payment by my tenants from two years ago. My credit score was hit by 110 points to 680 and I could not get the lowest rate. I had to spend an extra 10 days fixing my score by contacting the utility company to write a “Clear Credit Letter” to get the bank to follow through. Check your credit score for free here at and protect yourself.

Completely updated 1/27/2015.



Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship. Sam focuses on helping readers build more income in real estate, investing, entrepreneurship, and alternative investments in order to achieve financial independence sooner, rather than later.

You can sign up to receive his articles via email or by RSS. Sam also sends out a private quarterly newsletter with information on where he's investing his money and more sensitive information.

Subscribe To Private Newsletter


  1. GD says

    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!

    • Jonathan says

      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).

    • Christian ✝ says

      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.

    • Christopher Nowak says

      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. Lady Jane says

    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.

      • Sue smith says

        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.

    • Thomas47 says

      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!

  3. Squid4life says

    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.

  4. Matt says

    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.

  5. Eben says

    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?

    • Christopher Nowak says

      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.

      • Eben says

        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

        • christopher Nowak says

          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.


Leave a Reply

Your email address will not be published. Required fields are marked *