Average Net Worth by Age (How Do You Compare?)

Episode #586

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Are you beating the average American in personal finances? Today, we’re sharing the average net worth by age to see where exactly you stack up. Whether you’re in your twenties, thirties, forties, or fifties, we have the data showing whether you’re behind (or ahead of) the norm. What do you do if you feel like you’re falling behind? Don’t worry; we’re also giving tips on how every age bracket can improve its net worth.

Don’t know how to calculate your net worth? It’s easy, and you can do it in minutes after (or even during) this episode. Once you know your net worth, it’s time to decide your next move. Do you need to make more money so you can invest faster? Are you close enough to FIRE that you can let your foot off the gas a bit? Should you buy that new boat? No! Don’t ever buy a boat.

We’re also sharing our own net worth journeys and the money moves we made that skyrocketed our wealth to millionaire status. You can’t go back in time and copy everything we did, but you CAN copy some of our same strategies to boost your net worth!

00:00 Intro
04:14 How the Rich Invest
07:31 Calculating Your Net Worth
13:21 What to Include
19:06 Age: 20 - 29
27:01 Age: 30 - 39
31:02 Exploding Your Net Worth
37:46 Age: 40 - 49
39:58 Age: 50 - 59
44:07 How Do You Compare?

[fnamelname]

Millionaire at 37… that was 15 years ago. Current networth close to $8M. Very simple portfolio. Rental real estate equity $4.5M, SP 500 index $2.5M, $2M primary home. Semi retired… life is good!

[fstr]

I think the question of what do you include in your networth mixes financial metrics. Net worth is a balance sheet number - everything you own - what you owe. If you can sell it for money it is included. That doesn’t tell you if you’re financially independent which is an income statement item - what earnings do you generate vs the expenses you pay. It would do people a lot of good to understand you need both to truly know your financial health. Excluding items from your networth because they aren’t income producing keeps you from seeing that you may have a lot of worth tied up that could be redeployed to generate more earnings and can hold you back. Include everything and then ask yourself is that how you want to allocate what you own or do you need to sell something to buy more of something else.

[emocoreschecter]

My wife and I calculate our net worth on the last day of every month. 33 & 34 and we just hit $133k. Of that, $99k is in retirement. Still contributing to retirement accounts but also focusing on after tax brokerage, liquid cash (hysa), and paying down the mortgage/debt to avoid the middle class trap while becoming debt free.

[NewGuy]

Our first million net worth was probably in 2013 at 36 years old.

Crazy that our net worth today is $5.4 at age 47. Our house is only 5% of our net worth. Things really took off since 2019 and we invest most of our income in our very low cost state.

[paulnovak]

Another great episode Mindy and Scott! As for the questions you asked in the video first net worth. I calculate this monthly. I am 39 and currently have a net worth of $1.35M. I do include my vehicles, and personal residence but no other personal assets. I do this because I feel confident that I could sell them for value but you make a good point that they are expenses, not generating income. My personal residence I am torn on. I did a cash out refi about 4.5 years ago and that is where we got the money to start in real estate. Since then I have been able to use our HELOC as a way to get a short term influx of cash to keep investing in real estate. While my home itself is an expense the equity allowed me to get started in real estate which helped my net worth take off. If I go back to just September of 2022 our net worth was $690K. Lastly for how I define rich I will also say it's FI. When you no longer have to work for money. This obviously makes the number different for everyone but when you have enough money to sustain your lifestyle for life that is how I define rich.

[melinda]

Good morning!!! Love your content ! You guys are my favorite bigger pockets podcast! 😊

[NiranjanBendre]

Yes consider personal property in net worth. If time comes to it one would sell their house to get the equity out of it so why not consider it?

[quindutton]

Not counting your primary home in net worth is like not counting growth stocks that dont pay dividends. Does not make sense. Ofcourse its an asset and counts toward net worth

[IronKneeClimbing]

$1.9 Million at age 35. $1.4 million without my primary residence. Bought a rental in 2011, rental in 2012, and another house in 2018. Buy and hold!

[sportsbeast]

Love the episode Scott and Mindy! When I calculate net worth I include my personal residence (however it is a single family househack that I am planning to sell one day) but don’t include my cars or other personal effects.

I love the ending of the episodes reflecting on what is reasonable/achievable to reach FIRE at different milestones. I crossed the $100k net worth line a few months ago and would rather FIRE closer to early 40s using a simple investment strategy without having to start or invest in garbage businesses which I hate doing even more than my day job xD

[JK-rwzn]

I include my primary residence in my net worth, but for calculating my position in retirement it's a bit different. The reason for this is that my residence is fully paid off and therefore significantly reduces my monthly expenses, and I assume this will continue into retirement. To achieve this monthly expenditure I obviously can't use the equity tied up in the house, so I exclude that equity from my calculations.

[chris-sc]

If this is data from the Federal Reserve Survey, then these numbers are actually median net worth numbers for households. So if the median net worth for the 50s age group at the 90th percentile is $ 2, 672, 160 (see at 42:00) then this net worth would place the household actually at the bottom end of the Top 5% households. The Median of the Top 10% is the bottom of the Top 5%. Hence, 5.001 million gets you into the Top 2.5% (just at the bottom).

[tkid]

I never understood the "We need to pay teachers more line". Gym teacher when I was in HS in NJ back in 2005 was pulling down $125k a year. Meanwhile off summers, holidays, and weekends. I work at a Credit Union now as an assisntant manager and make $22.10 an hour. Dont ever hear anyone saying I should be making more

[NoviceExpert]

I don’t understand the argument when net worth = cash value of assets - cash value of liabilities. Just lookup the definition of assets and liabilities, and there is your answer 😅

[devinfitzgerald]

Great presentation on this Scott and Mindy. Appreciate you both.

[dstevens]

Best video on net worth I've seen yet, and I've seen lots. The in-depth analysis of the makeup of that net worth (stocks vs rental real state vs principal residence) and what to focus on in the various decades is exactly what folks should be paying attention to, rather than just how they're comparing. Work smarter, not harder, so figure out where your effort is going to get you the best bang for the buck.

[davidleslie]

I only use rental property equity, Stocks, and Cash. No personal property, nothing with wheels, also no primary Home. I also don't include my primary home mortgage on the liabilities.

[albertrichardson]

Our current net worth is 3 million, we achieved our first million in 2012. Our primary resident and are second home are completely paid for: we have never included our two homes as an asset nor do we factor them into our total net worth. Also, we’re currently receiving $200K in passive income yearly. Our monthly living expenses never exceed $6, 000. When you’re passive income, exceeded your burn you are wealthy.

[bulldogfightingforfreedom]

42 years old, networth $4.2M usd, working 24/6 days, currently no debt. I am aggressively investing, and take q vocation every now and then, single, no kids. I own properties, stocks, bond and target retirement accounts .. and never pay a single attention to celebrities or trending BS.

[debbie.torres]

To answer the question on net worth calculation, I exclude my home. My actual numbers I’m working with toward retirement is the actual cash I can spend without becoming homeless (or displaced to rent), but that is because I’m focused on keeping expenses super low longer term. If I want to feel better about my number on paper then I look at Rocket Money which includes my house. I love the Scott & Mindy combo, especially when Scott has his hands on a spreadsheet! There’s nothing like it. 😂 Thank you!