The Average Net Worth For The Above Average Person

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

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

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

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

Average Net Worth By Age In America

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

Under 35: $76,200

35-44: $288,700

45-54: $727,500

55-64: $1,167,400

65-74: $1,066,000

75+: $1,067,000

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

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

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

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

The Above Average Person Is Loosely Defined As

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

2) Does not irrationally spend more than they make.

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

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

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

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

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

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

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

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

11) Does not confuse brains with a bull market.

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

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

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

The Above Average Net Worth Deconstructed

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

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

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

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

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

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

Financial Samurai 401(k) Savings Guide

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

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

Below is the recommended 401k amounts by age.

401k by age savings potential guide

401(k) Contribution Assumptions

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

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

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

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

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

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

Financial Samurai Post-Tax Savings Guide (Taxable Investments)

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

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

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

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

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

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

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

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

The Importance Of Real Estate

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

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

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

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

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

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

Real Estate Investing Arbitrage

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

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

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

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

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

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

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

private real estate investment dashboard

Financial Samurai Home Equity Guide

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

Financial Samurai Home Equity Accumulation Guide Chart

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

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

Paying Down Debt Is What Above Average People Do

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

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

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

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

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

The Average Net Worth For The Above Average Person

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

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

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

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

$250,000 by 30

$429,000 by 35

$660,000 by 40

$914,000 by 45

$1,240,250 by 50

$1,684,000 by 55

$2,180,250 by 60

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

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

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Stay On Top Of Your Finances

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

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

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

Retirement Planning Calculator

Invest In Real Estate More Strategically

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

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

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

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


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

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

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

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

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

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

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

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

    Here is what “average” is:

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

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

    1. Greenbacks Magnet

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

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

  5. Poor in SoFlo

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

  11. Sam,

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

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

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

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

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

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

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

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

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

      2. Hi Sam

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

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

        Thanks. Really enjoy your writing.


        1. Hi Jesse,

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

          — back of napkin —



          NP=Number of periods=5.5

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

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

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


  14. Oliver Doolin

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

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

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

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

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


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

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

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

  16. Prospective Home Buyer

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

    Do you have any insight / analysis on this?

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

    1. Vitamin_Dee

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

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

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

      Of course this still required me getting rid of the mortgage in order to enjoy this savings… two ways about it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      And in the meantime, enjoy life!

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

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


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

    1. Robert Ruschak

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

      Great content

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

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

  24. Fit Financial Coaches

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

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

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

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

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

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

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

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

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

    Thank you for your time.

    Too Early to Know

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

    2. a fantastic social security calculator is at

      good luck to all and happy holidays

    3. Still figuring it out

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

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

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

  27. Green Field

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

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

  28. Hey Sam,

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

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

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

      1. Christopher

        Financial Samurai

        Good morning

        This is my first foray into a discussion forum!

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

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

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

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

        I would see the following included:

        Social Security
        Military retirement
        Medical care/insurance
        Life insurance

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

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

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

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

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

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

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


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

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

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

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

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


          1. Sam

            Good morning

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

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

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

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

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

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

            Thanks for the response and interaction!


          2. Sam

            Good Morning

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

            You perplex me!

            But you are intriguing!


    1. Marvin L McConoughey

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

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


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

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

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

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

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

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

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


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

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

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

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

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

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

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


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

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

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

    Any advice would be appreciated.

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

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

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

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

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


      1. Charles conrad

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

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

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

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

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

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

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

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

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

      3. Gary

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

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

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

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

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

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

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

        Lessons learned when buying property in Key developments:

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


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

        Install sprinkler system for the yard.

        Lay Sod versus seed where applicable.

        Build Stone walls with Wrought Iron fencing to see through.

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

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

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

        Sold out at cost no skin lost!

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

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

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

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

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

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

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

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

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

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

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

        Trust yourself more than anyone else but listen anyway!

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


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

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

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

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

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

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

    Unless expenses are high, this is true!

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

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

    Now, I’m not convinced renting is throwing money away. I think it depends on the circumstances. I agree with much of the guidance from this link :

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

    $24,000 annual rent/$500,000

    This equates to 20.83 P to R

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

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

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

    1. Joseph R Nelson

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

  38. Am_I_Delusional?

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

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

  39. Very useful.

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

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

  40. Good rough estimates but room for improvement

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

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

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

  42. The average net worth was for a household.

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

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

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

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

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

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

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

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

  44. Edmund Honda

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

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

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

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

    2. Rebekah Kondrat

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

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

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

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

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

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

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

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

  45. Nordic Fire

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

    – Nordic Fire

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

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

    Thanks for the great article.

    1. Hi Ernie –

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

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

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

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

    1. Frank Moolah

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

  48. David Michael

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

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

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

    3. Michael,

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

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

  50. Brian Weitzel

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

      1. FinallyAdulting1

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

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

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

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

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

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

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

  57. FinancialSurfer

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

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

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

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

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

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

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

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

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

      Congrats and thanks for any learnings you can share!

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

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

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

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

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

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

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

    Total Net Worth: $120,752.19

  63. AlwaysWorriedAboutRetirement

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

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

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

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

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

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

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

    Thanks for reading.

  67. Chris Cerda

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

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

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

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

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

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

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

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

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

    2. Randy Evanchyk

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

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

      Quit crying and set some goals.

  71. Profitable Matters

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

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

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

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


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

      Real Estate Is My Favorite Asset Class To Build Wealth

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


  72. FinancialRewards

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

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

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


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

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

    Real Estate:

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

    Post tax/Personal savings:

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

    My personal situation:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    1. FinancialRewards

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

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

      Best, Sam

      1. FinancialRewards

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  77. Right Hand Money Man

    Thanks for all the work on this post!

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

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

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

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

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

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

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


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

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

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

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

    1. smartrenter

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

  82. FinancePatriot

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

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

    Nice article, well written.

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

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

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

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

    1. Hi Mike,

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

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



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

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

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

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

  85. Multimillionaireroad

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

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

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

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

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

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

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

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

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

    If they would buy only QQQ, 511k.

    If they would buy Vanguard 2050 fund, 312k.

    Those high savers sound unrealistic. Am I missing something?

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

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

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

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

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

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

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

            1. smartrenter

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

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

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

    1. John Fourteensix

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

      1. John Fourteensix

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

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

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

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

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

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

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

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

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

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

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

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

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

  93. I just happened on this article and site.

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

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

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

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

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


  94. Kye Andreopoulos

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

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

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

    Thanks for your thoughts,

    Kye A.

  95. Millennial Millionaire

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  102. John of the North

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

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

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

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

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

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

      See: Overcoming The One More Year Syndrome To Do Something

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

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

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

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

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

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

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

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

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

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

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

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

    Good luck everyone!

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


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

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

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

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

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

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

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

        1. John,

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

            Check out some related fun posts on Millennials:

            A Massive Generational Wealth Transfer Is Why Everything Will Be OK

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

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

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

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

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

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

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

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

    1. Hey Chidu,

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

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

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

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

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

      1. Lauren,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    These 20-somethings must have amazing jobs.

    1. Hi Lauren,

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

      Again, these figures are above average folks.

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


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

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

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

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

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

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

          Why Tough Love Is Important For Your Finances



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

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

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

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

            Where did you gather your sample of people from?

            1. Lauren –

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          Good luck!

          1. I appreciate the support.

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

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

            1. Hi Lauren,

              I recommend doing several things:

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

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

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

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

              Other Related Posts

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            4. There’s actually no hyperbole, Jonathan.

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

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

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

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

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

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

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

    2. Finance Solver

      Hi Lauren,

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

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

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

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

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

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

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

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

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

  112. John N. Chicago

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

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

      1. John N. Chicago

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

      2. John of the North

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

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

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

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

          1. John of the North

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    2. KP at PassiveFinance

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        2. James silvester

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

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

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

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

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

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

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

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

            1. smartrenter

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

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

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

                Related: Buy Real Estate As Young As You Possibly Can

            2. smartrenter

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

        2. Cory @ Growing Dollars From

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

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

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

      4. NoMoreSillyComments

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

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

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

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

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

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

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

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