How Much Should Your Net Worth Be Right Now?

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How Much Should Your Net Worth Be Right Now?

Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.

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I always found this net worth calculation interesting when one switches jobs and can suddenly become a UAW or PAW by salary alone.

RichardMahler

Last time I saw this video I was way behind. Now I’m on track thanks to this channel.

bsktballman

I'm 50 and have been tracking my MND net worth (referenced in the video). That may be too high when you're young, but it is too low when you're older. Most of mine is in my house, which doesn't really help.

MarcPage

My husband's income doubled in the last year and a half so we don't come close to the number we should have according to this. But if I use our previous income then we're right on track actually higher than where we need to be. Kind of hard to use this formula with such a big income jump.

betsyradford

So its (Age * Yearly Income Pre Tax) then divide by numbers of years until you’re 40 + 10. For example if you’re 30 (10 years till 40), you divide by 20.

officialdannyg

I know this doesn’t take income jumps into account, but I’m apparently 191k behind at 31 and feeling pretty hopeless lol

brendinho

These numbers are always so skewed when you have big increases in income. I guess it’s best to calculate off of an average or maybe what income you actually need rather than your current?

Icemanfan

Thought i was good but turns out i was off by a decimal point. Anyone got $600k they feel like giving away?

bombconnery

I’m 41 and actually well over my calculated number, doing better than average.

eplugplay

Or, don't worry about "where you should be" as it relates to income. Know your goals and know what you'll need at retirement.

*Not financial advice, just my strategy... Looking for citicism to see if I am overlooking anything.

Break down your living expenses. Adjust with a reasonable expectation of inflation until your retirement age. Add 10% as a buffer. Project how much is needed with your current starting point, accounting for 8% returns (approx. Historical of the global market). If that monthly contriubution is in your busget, you are on track. If not, see where you'd need to be with the max you can afford. The difference between that and how much you have now is how much you need to catch up on.

TalkToMeDay

Any adjustments for couples? Especially where one spouse is stay-at-home?

pavlindrom

wonder what’s the basis of this calculation .. but it’s better than any that just based on age.. i was trying to see where the networth with combined social security earnings .. it’s like 3/4th and not sure if it’s reasonable considering all those taxes paid etc.

robertmarlo

Doesn't seem to work too well for people pursing FIRE. The income might be very high, but that's because they're front-loading their income to achieve early retirement.

Azel

Is that monthly income or yearly income, and is it before or after taxes? I’m new to this so I feel like I’m missing some of the nomenclature here

startnine

I feel like the hardest part of this equation is that my number changes often due to income changes. Not complaining….that is a good problem to have

MsJacquese