EXTREME Net Worth Targets By Age, Income And Work Experience

When it comes to growing your net worth, having extreme net worth targets by age, income, and work experience is a good idea. Even if you can't reach the extreme net worth targets, you will likely have pushed you harder had you not had such aggressive goals.

Most people don't have any net worth targets to shoot for. As a result, they wake up 10 or 20 years from now, wondering where all their money went. They ask themselves why they aren't richer?

After publishing my latest Net Worth Targets By Age post, I received some pushback. Some people felt it was more appropriate to use a multiple of spending as opposed to a multiple of income to calculate a net worth target.

The argument is that most people spend less than they earn, therefore taking a multiple of spending creates an excessive net worth target. Fair enough if you want to make excuses. But don't you want a challenge?

What if your spending goes up drastically due to unforeseen medical expenses? Or what if you have to start supporting more people? What if your investments lose money as we forget they sometimes do? Or what if you get laid off with no severance?

What if you can't sell your house to pay for living expenses because the market dried up? Because there is no rewind button in life, I think it's better to be more conservative with your financial calculations.Inline image 1

Using a multiple of income as a net worth target prevents you from CHEATING. You can just cheat your way to financial independence by slashing spending and eating rice and beans. No. The more you make, the more you will save and invest.

Extreme Net Worth Targets By Age

If you agree shooting for a net worth equal to 20X your income is sufficient to declare financial independence, let's talk about what it takes for someone to get to 50X. Achieving a net worth equal to 50X your average annual gross income is secretly my true net worth target. I'll explain why below.

Take a look at the chart below. To get a better view, mobile phone users please hold your phone horizontally. Sorry for the small print. You can also pinch and zoom.

Extreme Net Worth Targets By Age, Income, Work Experience

For a “normal” extreme financial freedom seeker, I assume s/he can achieve a 50X multiple by the age of 50. Call it 50 for 50 if you will to make remembering the goal easier.

The net worth goals are therefore $2.5M, $5M, $7.5M, $10M, $15M and $25M by 50 for those who earn $50K, $100K, $150K, $200K, $300K, and $500K respectively. Obviously, the 50X multiple target is harder to achieve the less you make due to basic expenses.

50 is a very important age target because the median life expectancy is only about 80-85. You might feel very healthy at 75, but what I've found with more and more people who've passed away recently is that you can look good one day and be dead within a couple years. Once we get ill, it's very shocking to see how quickly our bodies deteriorate.

Health Care Is Expensive

Here's a chart from the American Association For Long Term Care Insurance on the average stay/need for long-term care patients.

As you can see, most patients die in under three years once they need care. Therefore, the best hedge to an early death is to not only get life insurance, but to retire by a certain age and not a certain financial figure. If you can't get to 50X by 50, then so be it.

Average length of stay for long term care patients
Average length of stay for long term care patients

What It Takes To Get To The Extreme Net Worth Growth Target Of 50X Your Average Income

Half the battle of getting rich is believing you deserve to be rich. Getting to the extreme net worth growth target of 50X your average income is hard. So here are some ways to get it done.

1) Extreme frugality.

Living way below your means is a must in order to save 50% or more of your after tax income after maxing out your 401k or IRA. While most of my peers were buying bigger houses and fancier cars in their late-30s, I decided to go the other way by downsizing to a smaller house and buying a Honda Fit after my 14-year-old vehicle couldn't pass the California smog test. I've worn the same clothes for the past 10 years and have shoes from before 2005.

2) Extreme hustle.

Not only do you have to maximize your career earnings, you must also maximize your side income. Take none of your time and energy for granted. Working only 40 hours a week to gain financial independence is a joke. I don't know a single self-made multi-millionaire who works so little before the age of 45.

I love the story about a reader who makes $100,000+ a year and still works at his friend's restaurant every week for an extra $200 – $300. It's awesome to hear from an Uber driver how he drives for four hours in the morning before attending classes at SF State.

Over the years, this hustling work ethic will provide huge returns. People who change from consumers to producers are those who create much greater wealth for themselves. I've introduced 20 side hustles to help make you more money today.

3) Extreme sacrifice. 

Sleeping two hours less a day than you normally do will yield 700+ hours more of production a year. You may need to delay courtship or start a family. You may have to live in your basement while you rent out the rest of your house. Toro sashimi, lobster, and dry-aged beef will need to be replaced by mac and cheese.

Tap water will be your main source of hydration. The thrift store is your Nordstrom's. The funny thing is, what's considered sacrifice in America is considered routine to the average Joe in most other countries.

4) Lucky breaks.

Give yourself enough chances to have as many lucky breaks as possible. We all know that outsized wealth is mostly due to luck. But you can increase your luck!

If you work hard to get the best grades, your luck getting into a good college or getting a good job increases. Get in an hour earlier and work an hour later than your peers for a year. If you do, getting a raise and a promotion increases.

If you spend an hour before work each morning getting smart about investing, your chances of finding a hidden gem increases. Strategically get to know everybody at a bar frequented by wealthier people. If you do, your luck dating and eventually marrying a wealthy person increases.

If you decide to start a website one day and write nonstop for three years in a row, you might be lucky enough to negotiate a severance package and be free to work for yourself. The harder you work the luckier you tend to get!

5) Investment returns.

To achieve your extreme net worth target, you need great investment returns. There is no way anybody at any income level who just aggressively saves can achieve a 50X target multiple without investment returns.

For example, even if a $50,000 income earner saved 100% of her gross income for 28 years, she would still only end up with $1,400,000. The only way a $50,000 gross income earner can get to $2,500,000 in 28 years is by contributing $29,000 a year and earning 7% a year.

Can it be done? Of course it can if you are extreme! $18,000 of the $29,000 contribution is pre-tax anyway into a 401k. Good thing 7% is within the average historical total return of the S&P 500.

For those of you who want to take on more risk for potentially greater return, I think it's better to invest in growth stocks. Your goal is to grow your capital as much as possible and as quickly as possible. Once you have enough capital, then you can invest in less volatile and less risky dividend stocks.

Investment Returns Compounded Annually

I strongly encourage everybody punch their numbers into a retirement calculator and play around with their expected expenses and expected returns to see what their finances will look like. It's a fun exercise that I do at least once a year to keep myself on track.

Invest In Private Growth Companies

If you look around, the richest people in the world are all entrepreneurs with tremendous amounts of company equity. As a result, if you want to achieve an extreme net worth target of 50X your income, you have to take on more risk.

Consider investing in private growth companies through an open venture capital fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment. 

Check out the Innovation Fund, which invests in the following five sectors:

  • Artificial Intelligence & Machine Learning
  • Modern Data Infrastructure
  • Development Operations (DevOps)
  • Financial Technology (FinTech)
  • Real Estate & Property Technology (PropTech)

Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.

Here's a podcast episode I did interviewing Ben Miller, CEO of Fundrise about investing in venture capital and private growth companies.

Why 50X Income Is The Extreme Net Worth Multiple

50X is the magical multiple for extreme financial freedom seekers because matches the Fed's long-term inflation target of 2%. 2% is also the safe withdrawal rate where you will likely never run out of money. In general, the 10-year bond yield, or risk-free rate of return, averages around 2%.

For example, if you earn $100,000 on average and accumulate a $5,000,000 liquid net worth, you can dump the entire $5,000,000 into a 10-year US bond and earn $100,000 a year guaranteed and never have to worry about money again. Declining interest rates have forced us to create or own more income producing assets.

$5,000,000 is probably the most common extreme net worth target to shoot for. Many people I know who are extreme hustlers make $100,000+ a year and can get to $5,000,000, especially with a partner.

The baseline extreme hustler makes the median household income of ~$76,000 and uses his/her extra time to earn double their income through side gigs or entrepreneurial endeavors.

Nobody I know who wants to reach financial freedom early just sits around and watches TV after they come home from work. They are working on their entrepreneurial endeavors!

There are endless ways to make six figures a year at almost any age.

A Balanced Life Is Not Realistic If You Want To Achieve A Big Net Worth

The only people I know who've achieved 50X without too much sacrifice are those who won the lottery, worked at a startup that became a huge success very quickly (Instagram, WhatsApp, Facebook), or who already came from wealthy families.

I know a lot of you will say or think things like, “there's more to life than just money,” or “I'd rather enjoy my life now,” or “YOLO” etc. That's totally fine. Only a small minority of people are extreme. 

Similarly, only a minority are entrepreneurs, multi-millionaires, or weirdo early retirees. Heck, probably only a minority of people read personal finance sites on a regular basis.

But what some of you may not realize is that after sacrificing for so long, sacrifice no longer feels like a sacrifice. It feels like normal everyday living because hedonic adaptation works both ways.

My Current Net Worth

Based on my latest net worth, I'm at a around 35X multiple of my average gross income over the past three years. It does help that I make less now on average than in the past.

Given I plan to continue saving and investing 50% of my after-tax income, I believe I will get to a 50X multiple by age 50 in 11 years. After age 50, I plan to accelerate my giving before the government takes half of my assets away!

The fact of the matter is, you don't need an extreme net worth equal to 50X your average annual earnings to live the ultimate lifestyle. I still think once you get to a net worth equal to 20X your average annual income, you're good to go!

But if you like a good challenge and want to create generational wealth, shooting for an extreme net worth is a worthwhile endeavor. Just make sure to have fun on your journey! After all, after you accumulate 20X, anything more is gravy!

After reading this post, doesn't having a net worth equal to 20X your average income seem so much more achievable? Even if you don't achieve the goals, you'll go much farther than if you had no goals. Here's the original net worth target by age chart again for your review.

Net worth targets by age, income, and work experience by Financial Samurai

Build Extreme Net Worth Through Real Estate

Real estate is my favorite way to achieving financial freedom. It is a tangible asset that is less volatile, provides utility, and generates income. By the time I was 30, I had built an extreme net worth for my age largely by investing 70% of my savings each year into real estate.

Today, real estate generates over $150,000 a year in passive income. A big reason is due to investing $810,000 in real estate crowdfunding to diversify across the heartland of America. The spreading out of America is real thanks to technology. People are willing to move to save money. Take advantage of this trend.

Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore.

Fundrise: A way for all investors to diversify into real estate through private funds with just $10. Fundrise has been around since 2012 and manages over $3.3 billion for 500,000+ investors. 

The real estate platform invests primarily in residential and industrial properties in the Sunbelt, where valuations are cheaper and yields are higher. The spreading out of America is a long-term demographic trend. For most people, investing in a diversified fund is the way to go. 


CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 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.

Recommendation To Track Your Finances

Sign up for Empower, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use Empower's Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms.

I’ve been using Empower since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

Empower Retirement Planner
Is your retirement plan on track? Find out for free after you link your accounts.

For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.

115 thoughts on “EXTREME Net Worth Targets By Age, Income And Work Experience”

  1. I’ve got a long way to go to get to 50x salary. I would be surprised if I ever got there, unless of course I built up 10 million or so and then switched careers into something that dropped my salary to a much lower number like 200k which would put me at the 50x mark. So then I could easily see me getting there, but if I were to stay on the traditional career path, I would need some amazing investment returns which I’m not sure will happen or not with VOO.

  2. Always an intersting read! I think it does put in perspective what one can achieve with full dedication. I guess it comes down to what you want out of life, both short and long term. I’m 43 with a net worth of 1.3M – this is fully self-made with no luck or help. I’m in a good place now and for “early retirement”. My goal is to be able to retire at 55 while still living comfortably but below my means in the short term. That takes away goals for extreme net worth for me and I’m ok with that. I mostly love my job but certainly would like to be able to walk away early. I also want to be able to travel and see the world, now and in the future.

    I’ll keep reading your posts and keep looking at ways to improving my financial situation. Right now, with conservative estimates, I would be able to retire at 57.

  3. I’m a little bit surprised to see that there are no figures listed earlier than 22. I am 19 years old, didn’t bother going to college, and current net worth is $65,000, making 65k annually as a systems administrator. I think I’m just about the luckiest guy on the Planet. I was homeschooled, so I managed to get a job very early on, bought a $3500 car and put state minimum on it. Currently living in my Aunt’s basement for $300 dollars a month. Don’t eat out, wear clothes from Goodwill, cut your own hair. All in all per year I spend $2000 on car insurance, $3600 on rent, about $2000 on everything else. (Gas, clothes, shoes, books, etc.) Everything else (after taxes) gets invested. Obviously I don’t want to live in my Aunt’s basement forever, but due to the time value of money I think it is worth it for a few years to give my savings a head start. Anyways, just wanted to weigh in and say that from my perspective, this looks totally doable. So to the naysayers, this is definitely achievable, at least under a particular set of circumstances.

    1. JD that’s great. There’s nothing under 22 because I assume that most people don’t plan to retire that early and are still going through education and discovery of what they want to do before then.

      But good job living below your means and hustling!

      1. Can we get an update on JD? Would be a super interesting read. Would love to see if there’s been a transition from expense reduction to revenue optimization.

        1. Got married, moved to a higher income, higher COL area, household income is ~220 000 now.

          So yes, I’d say I transitioned. Wife was really what did it, living like that is a lot more acceptable when you’re on your own

  4. Artful Money

    Not bragging here, but I am ahead of schedule! Through a combination of luck and trying hard to reach high goals, I have been able to make some really great investments. I am 24, soon to be 25, and I should be at a net worth of $220,000 by the end of 2017. I fall into the $50,000 per year range, but only recently. My actual average income over the last 6 years was only $42,000. There’s a lot that went into it for me, but the biggest things were these:

    – I did not take the traditional college route (no family money whatsoever) so I financed my college through an employer starting at 18. Employers often have these agreements waiting for people to take advantage of.

    – Having had a full time career starting at 18, I was able to buy a house (barely) at age 20 with my savings. I chose to buy the biggest building I could with 3.5% down using the FHA program. I bought a 4 unit in a good location. I just barely had the right work and credit history, to be completely honest, I had been working on it since I was 17, which is not typical, I just really wanted my own place and investments of course!

    – I started a 401K ASAP (which was at age 19, stupid company policy) and started with 15% of my income.

    So I ended up with a bachelor’s debt free, a four unit building, another small house I live in and rent a room to a friend (going on three years), and I recently bought another building I am renting to college students. That has given me the huge advantage of time and I am ready to start some other investments. The $250,000 mark for the $50,000 income range at 35, I should hit in early 2018 before age 26.

    My property equity is now on the rise and it approaching $1,000 a month. My 401K is building itself, and I have two investment properties. I also expect a total passive income of about $17,000 for 2017.

    For anyone who reads this that is older, out of the 20s or 30s or wherever you are, Sam has good advice, get discouraged, or get motivated. I recently got discouraged but I just keep plugging away, every day for the past 9 years. I eat free food even if I really don’t want it, I loose sleep because I am shoveling, salting driveways, repairing sinks etc., I don’t have many many things I could have (and I want), but I will continue to put them off, because that end goal is just to good to pass up.

  5. 50X of income too high. Living that frugally does become a way life and a habit, but man you gotta live a little! For instance, I own a very modest cottage with a small sailboat – two luxuries that make no economic sense but have enriched my and my kids life enormously. Seeing Paris at 26, before children – priceless! Lusting (and I mean lusting) over a Porsche since 11 years old, and buying a used one on your 40th birthday! Cash drags all – but part of a life well lived!

    My thought is 25x is plenty and 4% annual return is a very achievable target.

    A 2% bond provides no inflation protection, and you are going to need it if you retire at 50 and live to 80. To drive 4% you need a diversified common stock portfolio and dividends or rental income – both of which (dividend and rent) rise with inflation.

    And the 25x should be on projected required retirement expenses… i.e: kids are gone, school and mortgage is paid… minus any government pension income. For example, we have Old Age Pension here in Canada that everyone is entitled to, regardless of income level.

    Based on these spending assumptions, and projection of wealth accumulation through 50 years old, I’ll be right around 32.5x … comfortably above my 25x target and with no regrets along the way.

  6. These targets are definitely possible if you hustle hard and get abit lucky. I am 33 and my average yearly after tax net income is around $400k-600k depending on how my business and the stock market does that year. My current net worth is around 5.1 million. I started my business at age 24 and my net worth at that time was around $75k

  7. Hi Sam – as I’m using this article and the one on “regular” target net worth, I’m wondering what income I should take in consideration.
    Let’s be specific, I’m in my first year of work after graduation, and I’m 29. So I’m referring to net worth by working years not age. And when I see that I should aim for 0.5 to 1 time my income in 3 years, does it mean my income now, or my future income in 3 years?

    Thanks from London where Brexit is completely depressing.

  8. I’d like to know how savvy investors can bank on 7-8% annual return on their investments in today’s unprecedented regime of low (and even negative) interest rates world-wide by central banks, causing an asset inflation in the stock market which is almost certain to face a crash in our lifetimes. We are in uncharted territories and we do not know what the next “black swan” event will be. With that in mind, a 50X savings goals sounds to be only a “best case scenario” without at all accounting for macroeconomic risks. That does not mean we should stop saving or investing, but above those two things, we should all be prioritizing to diversify asset holdings to prepare for the impending burst of this “free for all” cash bubble.

  9. I like the idea of Extreme Net Worth Targets. Extreme by definition does not mean the least that you need to retire as you have pointed out a few times. I think you have to be smart about spending and investing money but you do not have to deprive yourself to get to these targets as some posters have suggested.

    I agree that the best withdrawal rate is not touching the principal and so far I have only been withdrawing some money for travel since last year and take less than half the earnings of the previous year. I could have been more Extreme in my targets if I knew then what I know now. I have more Extreme targets now.

    I wanted to make the point that salary based targets are harder for older people. I am older and salaries were much much lower when I started out and we didn’t have the retirement tax deferral vehicles available now, so even with aggressive saving, NW does not grow much until later.

    For example, my first job I made $2,400 a year (1968) and my last job $86,000.(2005) So if you calculate the average of that being $42,000, I should have had NW of $2M by age 50. I had just $368,000. not counting a small pension accumulating.

    However little you make and save, NW grows faster and faster after a certain point with compounding and if you are smart with investments. When I was downsized in 2005, my NW was $622,000. Since then my NW has grown to $3.5M between investments and real estate equity because I got smarter with my investments. Also, the bigger the NW, the more you can take a bit more risk.

    In my city, real estate is always been a good long term investment especially using leverage so when I was downsized I sold my condo and bought a big house in a good neighbourhood with some rental income potential and took on a big mortgage, thinking interest rates would stay low for years. I also started managing my own investments and did very well, saved my severance pay, and had a few good paying contract jobs the first few years. After that, my freelance income was minor, just enough for basic expenses and a few trips a year. About five years ago I finally quit altogether and live on rental income, pensions, and withdraw some investment income for travel.

    So I agree with your idea of NW targets, just showing a different growth trajectory can work too.

    1. The point you made about your net worth accelerating the more you have is particularly true during a bear market. Although I’ve written that the first million might be the easiest due to our endless energy when we are younger, the compounding after $1M has been pretty surprising on my side as well. This is why I’m aggressively trying to decrease exposure and pay down debt so I don’t give it all up.

      How old are you now?

  10. I just ran my numbers today, and it’s a bit disheartening. I don’t want to live completely frugal when I retire so I’ll have to cut out extras between now and my 13 year goal.

    So if I retire by 46 or 47, I will need 2.6 million. Yikes! That seems Extreme to me at this point.

    Luckily I have plenty of financial blogs like this one to read to help me on my journey.

  11. Sweet Sam…thanks for the great article, and you know I love me some Arnold.

    I’m shooting for the 50kx50x50years….so 2.5 million by the time I’m 50 (currently I make a little less than 50 as I’m a school teacher, but I’ll get there).

    I plan to do this by practicing frugality and extreme low cost of living <—-Midwest living has its perks:)

    1. Sounds good Clint! I want to invest in the Midwest, and so do many coastal residents. Therefore, I would buy up all the prime Midwest property as you can BEFORE we start coming. We have already infiltrated Denver and Portland!

      1. LOL, I have no doubt you and many other buyers will arrive. Land is pretty cheap here, especially undeveloped so maybe I’ll hedge for that. I know a lot of rich older folks around my area who have used the buy and hold strategy and are sitting on millions of dollars of real estate/rental properties, so I also may go that route. I think I’m going to head over and read your invest in real estate as early as possible article that I just saw. Maybe it will spur me on!

        1. Get neutral inflation Clint. We’re coming. I’m sure of it, because institutional investors are coming. They pool money from outside the midwest and then go deep buying up areas that have the highest yields e.g. Midwest. Investors no longer have to own physical property. There’s all these real estate crowd sourcing companies now that are enabling more and more people to invest. In essence, the arbitrage is getting smaller and smaller. Trust me on this Clint!

      2. Sam, you’re telling Clint, a school teacher who makes $50,000 per year, to buy up all the prime Midwest property he can before you and other investors. You completely ignored his comment of practicing frugality to achieve his financial goals while being a school teacher.

        Do you think it’s realistic for someone making less than $50,000 per year to try and compete with experienced real estate investors?

        I think you completely ignored his comment and chose to brag in a big d*ck contest instead.

        1. Dick contest? If you think so.

          “I’m shooting for the 50kx50x50years….so 2.5 million by the time I’m 50 (currently I make a little less than 50 as I’m a school teacher, but I’ll get there).”

          Clint is shooting for a $2.5 million net worth by age 50 and I believe him. $2.5 million is not something to sneeze at, it is particularly impressive for a school teacher.

          Half the battle is BELIEVING you deserve to build wealth and be rich too.

          I’ve been buying midwest/sunbelt property through private real estate firms like Fundrise and the likes since 2016. It only takes $10 to start investing in Fundrise, which buys single family and multi-family homes in the Sunbelt. In other words, anybody can start investing in Midwest properties.

          If someone challenged your manhood, hence your comment, confront them! Go to the source, not online with two people having a separate conversation. The best clap back is to live your best life. GL!

  12. Wow, 50x income is extreme. Only a few people can achieve that level of wealth by 50. Even you are only at 35x and you are an elite in the world of FI. We have no chance at all.
    Personally, I think it’s too much. That kind of goal will drive the person a little crazy. Sometime enough is enough. I guess it just depends on your personality.

    1. Just think though, if you were able to get 50 X, then your wife wouldn’t have to work anymore. You and your wife could cheer early retirement, which I think is much more ideal then one spouse working and one spouse being retired don’t you think?

      I bet if you got to the point where both of you and your wife are early retired, you could grow your traffic even more and block away the naysayers who question what retirement really is.

  13. Taylor Lee @ Yuppie Millennial

    While according to your chart I am on track for “extreme saving” there’s no way I am sticking to my current career until 50. I plan to offramp at 35 when I have 20-30x expenses. I’ll probably continue to earn income with whatever I end up doing but it’ll be on my terms and having the time available to spend with future kids while they’re young is worth the extra padding of net worth for me.

  14. I love reading the biggest dreams that people have for themselves. Especially if they feel pie-in-the-sky, because it shows how their brains work. My goals are more modest than yours, but more extreme than most people’s, and that’s alright with me.

    1. All dreams are good! I am a master day dreamer! It’s fun and free. Who doesn’t love to fantasize about what they would do if they won the lottery. I love to dream. And no dream is less than another’s dream.

  15. PatientWealthBuilder

    totally agree with the 50x by 50. People set their goals too low. I’ve been saying over and over – why not $10 million? I mean like you said – the “extreme” sacrifice you mention is what the average joe in most of the world does. There is a lot of American arrogance related to lifestyle and it results in stealth poverty in an attempt to show outward wealth. In the Personal Finance / financial freedom community you hear about stealth wealth while everyone else practices stealth poverty!!!

  16. I think it’s fun to look at extremes once in a while to get inspired by what extreme net worth achievers are capable of. I wouldn’t have got as far as I have today if I only read about average Joe’s and underachievers. I definitely push myself to be better by imagining what it would be like if I could achieve xyz like the pros in various scenarios.

    Very interesting stats on the long term care stuff too. No body likes to think about end of life care including me but it’s an expenses our parents and most of us are likely going to face and the better prepared for it we are, the better.

  17. Patrick The Curious

    What I want to know is what kind of jobs and/or businesses you guys are running that help you make $200,000 a year or more. Several of you have mentioned this in the comments so far and I’m rather surprised to hear of so many people in this situation.

    I just got out of school with a Chem-E degree and may have jumped into the wrong industry (Environmental Engineering), where the income for the top 1% is around $160,000 a year (typically for an environmental contractor). Do you guys work in real estate, law and IT?

      1. Patrick The Curious

        Thank you. I read your article several months ago and it has served as a guide as to what I need to do in the next few years to make over six figures.

        My question though, is slightly different. While there is a good chance that I will hit the six figure mark in the next 5-6 years, I want to know more about the individuals who make $200,000 a year or more.

    1. Most engineering fields offer a relatively high starting salary, but most people reach a quick ceiling if they stay in an individual contributor role in the field. If your primary goal is financial success, then you’ve got to move onto a management and business role and also use other methods to supplement your earning power as Sam mentioned in his articles.

      However, if truly you enjoy/love what your doing, then consider yourself lucky since most people don’t love their work much and instead focus on learning more about your profession.

    2. Here’s my take on making bigger money when working for a company and having a technical (engineering) degree:
      1. become the best at your job (distinguished or fellow engineer)
      2. Go into sales
      3. Go into management.

      1. I would think #1 & #3 is realistic for most as long as they’re willing to work hard, although #3 requires being good with office politics to some extent.

        #2 for most people in engineering field is highly unlikely, since most engineers don’t make good sales people and vice versa.

  18. I’m at the start of the road and something is unclear to me.
    You mentioned 20x of the gross annual income, but my salary kept increasing. So if year by year the salary will go up, do I have to recalculate the 20x on each change?

    1. Good question. Since you are starting off, you are in a discovery period of how much income you need to be happy and how much can your income rise to. Once you discover these variables, then you can apply the multipliers. Or you can just take the average income of the past three years and use the multiplier.

      1. Thanks for answering me, this made me rethink my long term strategy.
        I figured out how much I actually needed to have a decent life, and luckily it’s way bellow my current salary (3x-4x lower), but that doesn’t seem right.
        I tried to keep my life the same, even with the increase in income and I tried to reduce useless costs such as rent where no asset is being accumulated. I know I’m on the right track, but I don’t know exactly how to pinpoint the 20x – 50x.

  19. I would agree that 50X is extreme, but knowing that you have that as a target helps put things in perspective.
    Today, at 35, I’m only at 3X. My current FI target for when I’ll turn 40 (at 25 times expenses) would still only be 6X gross income.
    I do want to reach 40+X by the time I get to 65 and I’m still not sure this is realistic.
    However, like you said, having a (crazy) goal and then trying to figure out how to make it work (even if it fails) might still be the best way to actually achieve more reasonable goals.
    I like your target of 50X income by 50.

    1. Awesome goals you have. 25X expenses at 40 will definitely make you feel financially free to do whatever you want. I like having the option of doing something that pays less, but is much more rewarding.

  20. worn the same clothes for 10 years? psh, I literally am wearing some stuff I got back in 7th grade. No joke. Yes it still fits (I haven’t grown in 13+ yrs…). I will wear them until they fall apart. Not getting fat is easy when you are such a cheap ass they you eat as little as possible to save money. @being_this_extreme

  21. Trying to get ahead

    I love this post. I am trying to hit the 50x income net worth by age 50. I recently bought a house for 1.27x my gross annual household income and am beating myself up over it. I am the smallest house in the richest neighborhood, which is what initially drew me to the house. I’m worth about 3x my annual gross income now. According to the Millionaire Next Door, I should have bought a $350,000 house and lived among mainly blue collar workers but the extra $250,000 worked out to under $1,000 per month of mortgage and about $150 more per month in property taxes. I assume the other expenses difference are negligible. Is this still very conservative? Am I beating myself up for no reason? I constantly balance “living life” with prudence and trying to get ahead financially.

    1. Depends. A $350,000 is what multiple of your gross income?

      I wish I leveraged more in 2003 when I first bought a place in SF. And I wish I bought a place in Manhattan I couldn’t comfortably afford in 2000. Curse you inflation and a demand for prime property in superstar cities!

      1. Trying to get ahead

        $350,000 is approx 75% of my $465,000 annual gross income. I live in a home that wouldn’t make a good rental down the road and where real estate only appreciates about 2-3% per year, so I don’t view my house as much of an investment. It’s really just a place to live and call “home.” This is why I am thinking I should have been more frugal and bought a less expensive home. I didn’t at the time because I felt like a $600,000 home was much nicer than a $350,000 home in my area and the extra cost of ownership is about $14,000 per year. It’s just that I am not exactly the Millionaire Next Door living in a $600,000 house with a $465,000 income. I know I could have “afforded” a larger and more expensive home, but $600,000 is enough where I feel like I am not exactly practicing stealth wealth. I do drive an economy car, but we travel to exotic destinations (which we are considering cutting back on).

        1. I think you are fine. If your $465K/year gross income is sustainable, I think you’re being SUPER frugal with the house you bought. Use this time to save MAX money so that if the $465K goes away, you will be set for life.

          What is it that you do?

  22. The only item I’d disagree with is “sleeping two hours”. It’s okay to skimp on sleep at times, but if someone adopts this habit continuously, they’ll not only shorten their lifespan, but also probably be less productive in whatever they’re working on and may even develop substance addiction.

    1. I didn’t mean sleeping just two hours. I mean sleeping two hours less a day to use that time to be more productive. So many folks say they need 8 hours a day. But do they really? Try 7 hours, then 6 hours. Take a nap in the afternoon. I’ve met so many successful people who sleep 4-6 hours. You can do a lot more than someone who sleeps for 8!

      1. Oops, I meant to type “sleeping two hours less a day”. If someone can get 8 hours a sleep a day or function well over long term getting only 4-6 hours sleep, then I’m envious. I can’t sleep 8 hours even if I tried and can’t nap either. I’m in my mid 30s, and I consider 6.5 to 7 hours continuous sleep as blissful, that’s why I can’t cut two hours. I know for a fact I’ll feel groggy all day the next day.

        But if someone can actually cut 1.5 to 2hrs of sleep a day and still feel rested enough to function well, then obviously more power to that person.

      2. Hi Sam,

        Sleeping two hours less is definitely extreme.
        I am sure I can transform my life if I improve my existing time even without infringing on my sleeping time! And obviously this ties in with getting rid of procrastination!
        Have been meaning to keep a time journal for a long time now. Will aim to get this moving.

        I am a very long time lurker for the last couple of years and this is my first comment.
        Always find your discipline, integrity and analytical approach inspiring. Thanks very much.


        1. Feel free to comment more and share your thoughts! They are always welcome.

          Instead of trying to sleep 2 hours less than you normally do, start with 30 minutes less for three months. You will get used to it I promise you. Then try 1 hour less, etc.

          I dropped 8am calculus class in college b/c I thought I needed 8 hours of sleep. Now I automatically get up around 6am every day (6:12am this morning) no matter when I go to sleep up to 2am b/c I had to wake up before 6:30am for the markets for so long. It can be done!

          1. I agree it can be done. I trained myself to get up at 5 am years ago when I had to commute, and it changed my life. Years later, when I was downsized and went into hustle mode with many jobs, it was easier because I already was up every day at 5 am. I can function well on very limited sleep if I have to and it really gives me confidence that I can cope and not get behind or lose my momentum during the day. I am retired now and still get up at 5 am and really value those hours of the day. I am way ahead of everybody else all day and have a nice relaxed pace all day with no energy flags. No naps for me either.

            1. I’m impressed you don’t take naps. Once I have a yummy lunch it is game over for me and I enter into a food coma where all I want to do is sprawl out on the couch for 30 minutes. It is one of the most glorious feelings ever!

              It takes effort to see the sunrise. Maybe that’s why not many people do it.

  23. 50X multiple just seems excessive. If I have an annual income of $50,000 at retirement and my nest egg is $1.25mn, assuming I can get a 4% ROI I can negate most of my withdrawals — I can probably completely cover it because my expenses should be lower in retirement. Now, I’ll openly admit that $50,000 is going to be tough to get because you’re closer to the threshold of ‘what’s needed for basic expenses’, but if you can’t hit a 20x, you can’t hit a 50x.

    I would much rather live my life as it happens, rather than be THAT frugally extreme. Just doesn’t seem worth it.

  24. What if you’re at a negative X multiple? Just kidding. But I agree that once you aggressively start saving and generating other income streams, it can eventually become a lifestyle. With time, practice, and a positive support group like here, the process can become easier.

  25. Hi Sam,

    I might be missing something but doesn’t it make sense to calculate your multiple on net income? Why factor in taxes when you never get to spend that portion of your income anyways?

    Thanks, Bill

    1. To make the goal more challenging. Using top line revenue (gross income) is a more apples to apples way to help everybody looking for extreme targets.

      The reason is because everybody has different effective tax rates.

  26. I’m aiming for around 16x or 4m. Assuming my house & all other debt is paid off, my actually annual budget including 2-3 trips to carib/europe a year is around $50k. To generate $50k after tax, as a married couple you need about $55k in income pre-tax (get to deduct 21k in exemptions & standard deductions, next 18.5k is @ 10%, rest is at 15%). At $4m savings, I should easily cover $55k/yr expense even with 2-3% inflation/yr and retire around 50. Social security will just be gravy.

    1. I should note 50x, while not needed for me, would also be difficult as well unless I worked till 60, (which I don’t want to do). My comp has gone from ~55k/yr to ~250k/yr in the last ~6 years so I’ve only been able to save a lot for a small # of years in my early/mid 30s. 50x is more achievable with a ~stable income amount or you get 10% CAGR or so on your investments.

  27. OlderAndWiser

    We’re currently at 16.5x. We were on track to hit 20-21x in time for a slightly early retirement, but because we are now thinking of purchasing a condo for my in-laws to live in, I will gladly adjust my goal to 20x with full or nearly full age retirement. While my goals are nowhere near as ambitious as yours, I’m glad that we have “slightly over-achieved” for decades so that we are in the position where we can offer some assistance to the in-laws without totally derailing our own retirement plans.

  28. Sam – love most of your articles but these targets are not only extreme, they are ridiculous and unrealistic, especially for anyone with kids. We’re a family of 4 and savings is non-existent outside 401K contributions for me, IRA contributions for my wife and 529 college savings contributions for my kids. Nothing left after that.

    1. It’s because this is EXTREME baby! Besides, what’s more valuable than having your health and a wonderful family of 4? Nothing. Don’t lose site of all that you already have.

  29. I like it, except I’m confused on a few things:

    1. Do you think it’s realistic to expect a 7% inflation-adjusted return?

    2. Regarding the chart, why is the amount saved per year different while income stays the same? For example, for $50k/yr, the chart assumes a minimum savings of net income of at least $17k, excluding any room for investment gains, while at year 50 (28) years worked, you’d have to save at least $29k/yr net to hit the $2.5M mark with 7% returns.

    1. 1) 5% return + 2% dividend is in the ballpark for the S&P 500. But, I think a 7% total return on average is 1-2% too high now as rates have come down.

      2) The ebbs and flows of life and investment returns. I’ve tried to make the charts as realistic as possible for extreme financial freedom seekers.

  30. A net worth equal to 20X your average income is much more achievable and appealing. 50% of gross income is too much sacrifice, and in my view, it is risky – I’ve had a close friend get diagnosed with stage 4 cancer at 30 and that for me was a wake up call to enjoy every day like it could be the last (within reason, still saving more than enough to hit the 20x target early).

    1. Agree. Live life to the fullest! At the same time, have some stretch goals just in case you live longer than expected. Damn, Europe for 15 days was such a great business trip. I spent out of my mind, and don’t regret it at all.

  31. Fiscally Free

    I think 50X is very extreme.
    Your logic behind the 50X number is to safely produce the same income you had when working, but I don’t think that is necessary. You said yourself that you should be saving at least 50% of your income. Therefore you are living on only 50% of your income, so why would you need to replace 100% of your income in retirement? I doubt most people will double their standard of living when they retire. They might spend a bit more on travel, but not double.

    I also suspect your house will be paid off when you retire, so you will need even less income.
    For example, let’s assume you make $100,000/year. You save 50%, and your mortgage is a fairly standard 25%. That means you’re living on only $25,000 per year. Does it make sense to plan for spending $100,000 per year in retirement?

    I’ve seen a lot of recommendations for 80% income replacement in retirement, but even that seems high to me. Maybe I’m crazy.

    Of course, inflation makes all of this much more complicated, but I won’t go into that.

    1. I agree. I like playing around with retirement calculators and it drives me crazy that it assumes if we’re making more we need to save more, but yet it doesn’t seem to take into account that we are already saving a high percentage of that money and once we’re retired we won’t need that same level of income since none of it will be going into savings.

      That being said, the more money we have in the bank the better I will feel, so heck yea, I’d love 50X but that will never happen unless I win the lotto and I rarely play so…

    2. Nothing is really necessary, except for basic food and shelter. You’re either going to challenge yourself, or you’re not. Or you’re going to find targets that suit your believes. That’s all good!

      50X is for those who want to go to the extreme. And believe me, I know MANY people who are way above 50X as well. I’m at ~35X. I like to have goals. So why the heck not shoot for 50X in 11 years and be able to aggressively help other people financially as well as with these posts? I think it would be wonderful.

      1. Fiscally Free

        As was mentioned before, I think most people are in jobs they don’t really love, so the sooner you can retire the better.
        Using your table, I think the much better play is to retire at age 40 with 20 X your income, rather than working another 10 years just to hit 50 X, which is admittedly extreme.
        Personally, I’m aiming to “retire” as close to 30 as possible. We’ll see how that goes.

        1. What you’ll find is that once you get to 20X your gross income as your net worth, you’ll actually start liking your work and other stuff more b/c there’s less pressure. Essentially, you’ll get that “playing with house’s money” feel. Micromanagers, bad assignments, getting thrown under the bus doesn’t feel so bad anymore!

          1. Fiscally Free

            I’m getting to that point and it does make things better, but you can still only take so much.

  32. saveinvestbecomefree

    I get the idea that (stable) incomes affect the amount that can be gained over many years of “extreme” savings. But in terms of financial freedom, incomes aren’t what matter, it’s the lifestyle you want and that is defined by your spending so using a multiple of your spending is much more accurate. Plus salaries can vary a lot more. I’m conservative like you and use 50X vs spending which equates to a 2% withdrawal rate. Since I make high income right now (but haven’t always), if I achieved 50X salary, my withdrawal rate in retirement would be 0.3%. No way I’m working for 2 decades longer than I want to reach that level of excess. I suspect you just like feeling “extreme” and having big goals. Why not target 50X your wall street salary (including bonus and adjusted upwards to what it would be had you stayed). You might be struggling until you’re 85 to hit that number. I don’t think that would make you happier. It’s great to have tough, achievable goals to stoke your passion but not at the cost of contentment.

    1. It’s a great challenge you’ve given me. I accept! Banking salaries have actually compressed since I left as fees, trading volume, and IPOs have also declined.

      Let’s see… with a realistic stable banking salary as a permanent Executive Director (no promo to MD), I’m around a 20X multiple right now. I’m excited to see if I can do it in 11 years. Thanks for the encouragement!

  33. I like the goal- I’m very far away from it though. It gets tougher as my overall income jumped this year without the NW climbing much so the multiple got compressed. First world problems, I know…

    I’m an extreme person so it’s a good challenge to shoot for. The biggest X factor is if the start up that I’m strongly invested in goes anywhere and / or my side business is able to take off in addition to my work. I have 7 more years until age 50 to figure that out. Even if they both don’t go anywhere things will still be pretty good. Game on!


  34. Is there an article that backs up the 20x savings target? Usually I see 25x or 4% vs. 20x or 5 %.

    Any insight?

    1. Sure. It’s just the inverse. If the risk free rate is 10%, a good net worth target multiple to have is 10X your income. If the risk free rate is 1%, then a good target to have is 100X your income.

      W/ interest rates coming down, target multiples go up. This is what the Fed and technology linking info has done to us. As a result, it makes more sense to leverage up to buy inflating assets with cheap money.

      1. More precisely, isn’t it more correct to say the following:

        Use the 25x multiple of 4% safe withdrawal rate if you assume that you will withdraw money from an INVESTMENT portfolio consisting of stocks/bonds/alts returning a conservative 4% over


        look for the current 10 year yield (call it 2%) and then inverse it (50x multiple) if you want to assume that you derive the necessary income withdrawal from a RISK FREE asset as opposed to a portfolio?

        In this example both 25x and 50x make sense, while as the other commenter pointed out I was surprised and could not find backing for the 20x.

        I know this is a bit nit picking but the two approaches (4% SFR vs 2% RF) are quite different. The latter has much less volatility while the first one will have your wealth significantly fluctuate and your income as well if you kept it variable at 4x current wealth

  35. If only the “build a website and earn passive income off it” was as easy as that sounds haha. Sam Financial Samurai is a great achievement, if simply because the vast majority of blogs out there struggle to cover their hosting fees. I like the 50 rule. A teacher could still be “rich” and a software developer could still be “poor” based on income

    1. EXTREME does not equal easy! But I promise anybody who wants to build a blog or make money online, just stick to the unwavering schedule of posting 3-4X a week, with each post between 1,200 – 2,000 words, and I am SURE you will far surpass covering for hosting after a year.

      Just keep on going. If you extremely want something, you will do it. And if not, no big deal!

  36. Stefan - The Millennial Budget

    “What’s considered sacrifice in America is considered routine to the average Joe in most other countries.” Being a non American this is one of my biggest pet peeves, as I go to school in America. There are many reasons people outside America cannot have the consumption lifestyle they do, for example: we do not have the infrastructure nor the high salaries and dare I say high minimum wage. To put it into perspective the minimum wage is almost 4 times higher than my countries… yet it is not enough.

    On the topic of 50x multiple I think this is definitely for extreme savers and people who want to leave an inheritance to their family. While reading the book, The Millionaire Next Door, this was the main motivation for accruing such a large quantity of wealth. In the end most of these high wealth accumulators gave away a large sum of their money to avoid the government tax, just like yourself! I will be graduating this August and begin working in November so I will let you know how my multiples stack up.

    1. We Americans takes for granted because we don’t experience other parts of the world. Hence, my push to write more Travel related articles and help others see different perspectives.

      Focusing on 50X can be considered a charitable act b/c it is exactly for building enough wealth to give the money away to people who need it most in the most efficient way possible. The government is inefficient.

      Related: Is Not Wanting To Be Rich Selfish?

  37. 50x might be a bit extreme for most people; however, I like to have stretch goals in addition to my standard goals.

    I am shooting for 25x for now, as I am confident that number will work for us. 50x may be achievable for us, but only if we delay having children, as you said.

  38. The Green Swan

    50X is probably a bit extreme yes, however the principle of working hard and sacrificing young rings true. I would say some sort of balance in life if necessary so 50x is not going to fit my lifestyle. Of course I’m still striving for a comfortable number that will allow myself to live after I stop working.

    The Green Swan

  39. I don’t think a 50X multiple is necessary for people who spend a lot less than they bring in. For my annual income, the amount of money I would need to save is absolutely insane and unnecessary. Shooting for 20X is a lot more realistic, but still more money than I would ever need.

  40. Apathy Ends

    Considering my current multiple will hit about “1” this year 50x sounds insane – hell, even 20x sounds crazy right now.

    I think 50% savings rate is a good target and that is where We will eventually set our goal

    Sam – how do you view passive income streams within this model? Is it best to leave them out and look straight at money in hand or use them as part of the withdrawal rate calculation? I think my multiple would change if I had a few consistent income streams

    1. Everything sounds crazy in the beginning of a financial journey until enough time passes.

      I see the assets the passive income streams produce as part of your net worth target goal. It’s all about figuring out how to optimize your assets to produce as much sustainable cash as possible. Not all assets/net worth should be in one asset. And each asset as various levels of returns e.g. my real estate yields maybe 3.6% – 4% annual cash, but has been growing at 7-8% on average a year for a total return of 10-12.6% a year. Then there’s my CDs, that yield 3.5% on average, but no risk.

      Multiples DO NOT change. Get the multiple. Then optimize the assets!

  41. What’s ‘depressing’ when looking at these is looking back knowing you’d have done things differently had you been more focused/disciplined in the past.

    To counter that, nothing like getting smart today because yesterday is already gone and only tomorrow awaits. Within the last 3 years, I finally maxed everything out and, if my calculations are correct, I’m saving about 50% of net (after tax) while still being able to live in the world.

    I may not wind up at the finish line with the expressed totals above but at least I know that Im giving myself the best chance to do so with the way above average savings/investment rate and working hard to get my average fees across all funds down to .13% All the market needs to do is what its historically done, and I should be in very good shape in 10-15.

    Love the posts Sam. Wish you were around to set my 20s-30s self on the path, but again, better late than never

    1. I’m in the same boat. I wish someone had smacked me upside the head when I was younger! Hindsight is 20/20 but it’s the regret that really eats you if you let it. It’s difficult to find solace when you measure your current efforts against the FIRE now net worth number.

      I know of two guaranteed ways to make the time needed to achieve FIRE fly; work harder and grow older. I’ve found that keeping my heading down, working my hardest and hustling my best is a very good distraction. I hope to one day look up and find myself at the FIRE finish line.

  42. Arnold also took a hefty does of vitamins – if you know what I mean – to achieve that body. So, in other words he took and accepted the risk associated taking industrial strength vitamins to achieve the body and fame he wanted. So yes, he was extreme. I guess the equivalent for us investors is perhaps the sacrifices you mention, but also taking more investment risks,and swinging for the fences once in a while.

    1. Love me some hefty vitamins! ha. Let’s see. Maybe hefty vitamins is equal to leveraging the internet to create multiple income rocket boosters for financial freedom fighters?

      Take more calculated risks people. Our safety net has grown HUGE over the past couple of decades.

  43. Shouldn’t you care about 20x or 50x *expenses* rather than income? 50x$100k income doesn’t matter much if you’re only spending $40k/year.

    1. PhysicianOnFIRE

      I’m with Eli. The income multiples work better if you have consistent, steady income from age 18 or 22.

      In my world, you pay tuition for 8+ years, make a low hourly wage for 3 to 7 years, then your salary goes up 4 to 10-fold. I make a great salary now, but there’s now way I could have 20x by age 50, let alone 50x.

      I do have more than 25x my annual expenses though, so my family and I are FI in my book.

      1. I totally agree with those that vote for multiples of expense and not income. In my last year as a wage slave, I made $250K but my expenses weren’t anywhere near that. In my current capacity as a real estate investor, my income is relatively low but I’m focused on capital appreciation. The numbers in the net worth chart align with my goals but it only makes sense if I use a multiple of expense.

        I understand that expenses can go up in old age so I’ve factored for that. My expenses will go down when I stop paying for private school for my kids and saving for college, but that will be offset by increased healthcare premiums and treatments. So I’ve added some misc unknown expenses. If I wrong, it just means I’ll travel less or less lavishly. Heck, if my medical expenses are that high, I probably won’t be needing the travel money anyway.

        1. I guess the good thing about focusing on expenses and not gross income is that it forces people to really analyze and monitor their expenses. If you know all your expenses by head, then you will probably be a more meticulous spender.

          I like things easy. Since I know I spend less than I make, doing a multiple of my ideal income is the easiest calculation possible. Further, as a writer, highlighting a multiple of top line revenue can be applicable to more people since everybody’s tax structure is different.

    2. After publishing my latest Net Worth Targets By Age post, I received some pushback from people who felt it was more appropriate to use a multiple of spending as opposed to a multiple of income to calculate a net worth target. The argument is that most people spend less than they earn, therefore taking a multiple of spending creates an excessive net worth target. Fair enough if you want to make excuses. But don’t you want a challenge?

      What if your spending goes up drastically due to unforeseen medical expenses? What if you have to start supporting more people? What if your investments lose money as we forget they sometimes do? What if you get laid off with no severance? What if you can’t sell your house to pay for living expenses because the market dried up? Because there is no rewind button in life, I think it’s better to be more conservative with your financial calculations.

      Share with us your current progress Eli. How old are you and where are you at?

      1. I understand your point Sam, but I think the only real target multiple should be that of your realistic expenses (with a cushion for those things you discuss). But take me for example, I made over $1m year for years, socking away 70% or more of my take home…(you get crushed in taxes when you make a lot). I hustled that hard so I could have an extremely comfortable early retirement with, you will like this part, a 50X multiple of expenses. I think it is a little silly for me to stay busting my ass so I could have $50M~$80M, I know these people as I am sure you do and they are not any happier than me nor if anything more money equals more problems. One is being sued by his 35/38/42 year old sons because their family trust checks have stopped. Another is a raging alcoholic and has a wife & kids who hate his very presence…sad really. There was a time where I did think that hell yeah, I’m going to create a $100M net worth & who knows I still might get there one day…but it won’t be for the sake of $ it would be a by product of doing something I love and am passionate about. For now I find that the most happiness comes through simplicity in my life.

        1. Perhaps the higher one makes a year, the lower the multiple they need because the amounts are so far above levels required to be happy. I stopped my chart at $500,000 because $500,000 is $250,000 higher than what I’ve noticed to be the maximum income level where earning more brings no more happiness. As you say, the taxes are a killer, so why bother?

          1. When I was at Stanford for business school in 2013, the current research at Stanford showed there was no correlation between income and happiness beyond $70/yr. I’m sure you’d have to adjust for local cost of living, but regardless it was very surprising. I would have guessed around the $250k mark like you did.

            1. It’s partly because a lot of the researchers themselves don’t make much more than $70,000 a year. You can’t measure and quantify what do you do not experience.

              It’s much better to observe from someone who has made nothing to much much more.

  44. Matt @ Distilled Dollar

    My vote is for “reasonably” extreme!

    I never understand why anyone would suggest frugality is a sacrifice. I know I’m probably preaching to the choice here, but I view frugality as being a means to invest as much as possible in ourselves by being able to buy pieces of our future freedom.

    I’m glad you ended the article mentioning how the 20x multiple that is more commonly discussed now appears WAY easier to hit in comparison.

    I think this target will depend a bit on the individual as well. I know a few financial freedom seekers who will be happy to “retire” at 10x, because their free time will involve some level of compensated work.

    Personally, I hope to walk the same path as you, where I can gain the freedom in my 30s. This means a 10-15x multiple of income, or a 20-30x multiple of expenses while still continuing to earn and invest a relatively large amount of income through new projects. 50x seems like a far off dream, but it is helpful to remember an entire portfolio might double/triple in the course of those 11 years, depending on market returns.

    1. It’s always worth noting that financial goals ALWAYS feel ridiculously out of reach until you come up with a plan and start calculating the numbers. Then, over time, you start gaining momentum and realize the impossibilities slowly start looking like INEVITABILITIES.

      Best of luck in your journey!

  45. I’m a big fan of these net worth target posts, but I think it’s important to keep our ultimate goals in focus too. Would you feel the same about you 50 X income goal if you were still slaving away 60+ hours/week at a job that you hated? I don’t know about you, but I already did that for too long. I see some people wasting their lives being miserable for 35 years so they can build a big enough net worth to sit around all day.

    My goal is freedom first (achieved this year) and then net worth. I’m guessing that a lot of readers have the same framework. Freedom comes from a mix of passive income, net worth for security, and side hustling. You do not need anywhere near 50 X income if you create ways to make an income on your terms.

    Now, if you’re goal is to hang out at the pool all day and watch the money pour in then slugging it away at the job you hate until you reach 50 X may be worth it.

    I know that you talk about this in other posts. Still I think it’s important to remember that building a high net worth is very important, but it’s a means to an end.

    1. Fiscally Free

      I completely agree.
      You don’t need 50 X your income to have a very long, happy retirement.

    2. Great point about what if one is still slaving away. I would think, SCREW IT! Life is too short to slave away at a job I hate for money. Good thing I place a target at age 50, so there is no need to be miserable for 35 years, only 23 years after college!

      The question for you is: how do you define freedom? I like to put frameworks behind subjective words to make sure we don’t get surprised.

      1. My current definition of freedom is not having to work to live. Right now that’s a $4,000/month annuity and $2,000/month in rental income. I was making $200,000 last year, but I was miserable almost every day.

        Now I can focus on earning income in ways that make me happy. I work just as hard as before on other projects. I just do it on my terms now. If something big and exciting pans out then I’ll run with it, but I’m not stuck somewhere that I don’t want to be. That’s freedom for me.

        Do you have a different definition that might help me look at it from a new perspective?

        1. If you’re happy with $72,000 a year then definitely focus on work you love that can cover your ideal income level.

          What were you doing making $200,000 a year and how old are you? After a while, I don’t think you will miss the money. I took a big hit after I left and didn’t care b/c I was doing something exciting and new. The severance helped a lot too.

          I do think getting to a 20X multiple of your happiness income is important. So I guess for you, that’s about $1.5M. Where are you now?

          1. Well we make more than $72,000, that’s just my passive income that we live on. My net worth is just over $1.5 million (nowhere near 50x), but I can do what I want. Making $50,000-100,000 a year on a side hustle is not that hard, especially if you’re not bogged down with a day job 40-50 hours a week. My point was saying that freedom isn’t the act of not working. Freedom is living life on your terms.

            I’m 34 years old and I’m still ambitious, but if I want to take the day off and wakeboard, or help a friend remodel a house, then I do it. If a project doesn’t excite me then I don’t have to waste my time on it. My wife is a doctor and she loves her job, but she doesn’t want to spend her whole life at work. So she works part time and took less pay for 7 weeks of paid time off.

            If you’re reading this blog then hopefully you have a side hustle that excites you. You probably also have a solid work ethic and good financial habits. That personality won’t be happy retiring early and then sitting on the coach watching tv into the sunset. The odds of that person making money in retirement doing something that makes them smile when they wake up are very high. Factoring that into our retirement plans is important, especially if you hate your day job and want to break free.

            1. I started a side hustle that has turned into 500k annually. You have to grind really hard for 5 years.

Leave a Comment

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