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ever wondered how your net worth Stacks
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up against others your age whether
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you're in your 20s and just starting out
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with some debt or if you're in your 40s
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building your dream life or let's say
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you're near 60s nearing retirement we
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have data on all those decades and
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everything in between we're also going
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to be covering in my opinion what your
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net worth goals should be by age in
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order to set yourself nicely for
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retirement and these are going to be
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above average targets the data say comes
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from the survey of consumer finances as
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well as the anonymized user data from
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Empower personal dashboard as of late
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2020 four as always there will be time
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stamps so if you'd like to just skip
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around and go to your decade you can do
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that let's start with the decade of the
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20s so the median net worth in this
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category is
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$752 that's as of the most recent data
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that we have but that also happens to
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put you in the bottom 20% of all wealth
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quintiles but the thing is
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$752 in net worth is a lot more common
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than you might think especially in your
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20s when you might have debt like
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student loans now
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$752 in net worth doesn't mean that you
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have that much money just sitting around
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in your checking account net worth is
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the total value of everything someone
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owns known as their assets and you
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subtract everything that you owe these
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are called liabilities this is a number
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that you should know like the back of
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your hand so if you have $10,000 in a
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checking account $20,000 in a retirement
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account but you owe $50,000 in student
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debt technically your net worth here
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would be --2k as your net worth grows
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over time I think it's a better
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indicator of wealth over income because
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compare somebody with a $1 million net
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worth who makes $50,000 a year versus
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someone with a $100,000 net worth who
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makes 500k a year while you can have a
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large amount of income if you're
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spending it all then at the end of the
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day you have nothing to show for it so
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in a way net worth I think also accounts
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for discipline and behavior which we
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will talk about shortly if you're in
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your 20s and your net worth is above the
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median another Benchmark to consider is
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the average net worth according to
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empowers data the average net worth for
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someone in their 20s is
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$10,250 this number is significantly
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higher than the median likely because
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individuals with exceptionally higher
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net worths are just skewing the average
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upward that's why I think median is a
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better metric to pay attention to
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because it represents the middle point
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of the distribution that way it gives
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you a clearer picture of where most
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people actually stand the average on the
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other hand can be distorted by outliers
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making it less reflective of the typical
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experience within the age group what if
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you don't want to just be a median type
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of person so here are some stretch goals
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for you so if you're in your 20s looking
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to be financially free one day these are
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more above average Targets on the low
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end We should strive for a
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$42,500
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495 and if you're somewhere in the
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middle that might look like around
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$53,000 in net worth now if you are
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absolutely killing it I have a column
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just for that and if you want to be in
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the top let's say 10 or 5% of net worth
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by the age of 30 you should have a net
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worth of
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$250,000 I developed these net worth
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stretch goals by projecting out real
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realistic income levels for each age
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from 20 to 65 and then averaging them by
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decade I then combined this with the
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money guys shows net worth formula so
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they have a really great formula on how
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to calculate a benchmark net worth for
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your age and I adjusted the denominator
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for those before age 40 and over age 40
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and finally for the killing it targets I
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just actually Incorporated inspiration
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from the financial Samurai stretch goals
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that's a popular blog and that gives a
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high achieving perspective for those
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that are absolutely saving and earning a
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lot of money I'll make sure to link both
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of the resources in the description
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below but I will be referencing this
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type of methodology for the rest of the
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video if you're in your 20s right now my
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top three goals for you are the
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following so number one I think you
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should systematically be trying to save
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15% of your income or more if you can
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let's say you can only save and invest
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around 5% of a $60,000 salary that means
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every single year you're investing
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$3,000 this is a way better use of money
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than say 125 door Dash deliveries over
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the course of a year you can feel free
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to debate me on that but you can see
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that even at $3,000 a year if you get
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the average returns at the S&P 500 of 8%
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by the time you're in your 60s you'll
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still end up with an ending balance of
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over $1.18 to million also huge spoiler
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here but the median net worth of someone
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at the age of 60 is around
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$454,000 so you could literally start
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this at the age of 30 invest $250 a
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month and you would be way above that by
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the time you're in your 60s goal number
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two is to not have any consumer debt
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this will give you a really strong
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foundation for the rest of your life
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personal finance is 80% behavioral and
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if you're able to make sure you never
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take on high interest rate debt you'll
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be a lot better off throughout the rest
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of your life when it comes to
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compounding that wealth student loan
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debt is still okay if the interest rate
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is low especially at this stage and just
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make sure you have a plan to pay that
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off reasonably and goal number three for
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your in your 20s is to have a plan to
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make more income eventually in your 20s
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it's not super imperative that you're
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raking it in like crazy but you should
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have some sort of idea of how you'll be
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able to increase your income like crazy
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in your 30s or your 40s your 20s are a
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great time to experiment with a lot of
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jobs careers and have a lot of coffee
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chats with people in industries that
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you're interested in to see what you
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would be interested in long term all
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right let's get into your 30s now so
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it's in this decade that you're likely
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building your dream life out perhaps
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you're hitting your stride in your
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career and you may also be starting a
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family and have some big purchases
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coming up like a home or a wedding to
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pay for the media net worth at this age
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range is $35,790
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average is
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$37,500 or you're still in debt it's
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really still not the time to panic in
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your 30s it's still early enough to
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where if you start taking things
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seriously now you can take some
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actionable steps within your own
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Financial life and then you'll be right
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on track for the future the goal of
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today's video is to show you how most
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people are doing in the United States so
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if you aren't in the spot you want to be
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financially I'm glad you found this
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video and I hope you are taking some of
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the steps needed to get started with
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investing saving and making a plan for
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your finances now in terms of net worth
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goals especially stretch goals I think
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on the low end you should strive for
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$162,000 by the time you are ending the
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decade of your 30s on the high end
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that's going to be $270,000 in plus and
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if you are killing it you may want to
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strive for the $660,000 mark by the time
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you're 40 now let's take the middle case
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here 197k in net worth at the age of 39
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if you have a net worth of
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$197,000 you're still on track to become
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more than a net worth millionaire by the
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time of age 65 because with 25 years of
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compounding until the age of 65 as long
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as you don't lose the money you should
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be able to get that net worth above the
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$1 million Mark provided you continue
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doing what you're doing in my opinion I
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think there are two main goals in your
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30s that you should be focusing on goal
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number one is to avoid lifestyle
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inflation and keep your spending as low
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as you can the 30s are going to be a
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decade where you start earning more
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money and often times what creeps up is
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that you will want to spend more money
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especially to keep up with others so
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while getting new pair of Nikes might
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get you some clout among your friends
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they won't pay for your retirement
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expenses if you haven't watched my video
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on why looking poor is important I will
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link it down below and at the end screen
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of this video but one of the main
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principles is that 65% of Americans are
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living paycheck to paycheck and
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sometimes a difference of just a few
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lifestyle choices can have a huge
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material impact on your net worth down
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the line if you can save say $500 a
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month by looking poor and not succumbing
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to Lifestyle inflation after one year
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that's going to be $6,000 that you can
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can use to invest or perhaps you use
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that money to invest in your own skills
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to make more money later on an extra
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$6,000 per year invested into the s&p500
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can be well worth over $500,000 in 25
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years which could be a huge difference
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for you in your life if you're willing
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to forgo some of the material
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possessions in your 30s goal number two
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is to be completely debt free so
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everything except your mortgage debt by
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the time you are 40 the idea here is
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that in your 30s since you're in your
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Prime earning years this is the decade
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to really start ramping up your net
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worth the last thing you want are credit
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card payments and other existing loans
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that are slowing your compounding of
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wealth so personally I paid off my car
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back in 20120 when I was financing it
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before so I was even financing it at a
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pretty low interest rate my rationale
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was that I really just hated the monthly
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payments I had some cash that I could
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afford to put towards my car at the time
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I wasn't using it for anything else I
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just really wanted to know what it felt
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like to not have a car payment anymore
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and let me tell you once I did that paid
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the car off a weight was like lifted off
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of my shoulders and I really felt free
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like I could operate more freely and I
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could just really focus on increasing my
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income all right so now we're in our 40s
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the media net worth here is
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$14,597
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76,000 so still what we're seeing here
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is that you're going to have those
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really high earners skew this number way
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higher but we should still stay focused
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on our own Targets on the low end in our
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40s a stretch goal is to have our
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household net worth be over
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$385,000 the middle case would be 434k
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and the high end would be over $600,000
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now if you absolutely killing it then
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you might be over seven figures by now
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but again this is household net worth so
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this is pretty much usually a
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combination of typically two people in
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your 40s there are a few goals that you
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should be shooting for in my opinion so
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number one you should have your
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retirement number in mind you're
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probably still about two decades or more
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away from retirement but your
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investments will need to be able to
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support your lifestyle in retirement A
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good rule of thumb is that you want to
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be able to live off of 4% of your total
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investable assets per per year during
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retirement and this is known as the 4%
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Rule now in a recent video I debunked
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the fact that you always have to default
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to let's say 4% and while 4% is
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conservative even the founder of the 4%
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rule has slightly revised it upwards to
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4.7% the idea here is that a 4 to 4.7%
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withdrawal rate is safe because while
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you are withdrawing that money your
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Investments are still earning the
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average market returns of 8% per year
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and replenishing what you use I always
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like to use a million dollar as a
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benchmark here so if if you have a
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million dollar invested and you withdraw
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4% per year that means you are getting
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$40,000 every single year if you know
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your lifestyle cost $40,000 per year
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then a million dollar should be your
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target if you have a higher slightly
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withdrawal rate say 4.7% then you would
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need around $851,000 to make that work
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so in your 40s if you can figure out how
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much you want your expected lifestyle to
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cost one day when you retire you can
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easily back into the final goal number
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of what you're aiming for and I have a
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lot of resources on the channel on how
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to do that once you have that number I
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think that sets up a really good
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Northstar goal for the next decade or
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two of your life and now you kind of
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figure out what number you need to work
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towards now I think we all want to have
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the baller budget but I think what we
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really need to do in this case is to be
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Ballers on a budget and be realistic
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with our goals here goal number two in
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your 40s is to have all your big
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expenses accounted for that could mean
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paying off your house or saving for a
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college fund or just simply prioritizing
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your retirement and goal number three in
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your 40s is that you want to be paying
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off your mortgage in full ideally by the
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time you're age 50 therefore this
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eliminates one of the largest expenses
00:11:03
that you will have which is housing and
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that gives you more options once you
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retire with this goal I would also want
00:11:08
you to stay away from the temptation to
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borrow against the equity of your home
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you just really want it to be paid off
00:11:14
and then you really just want to think
00:11:15
deeply about what types of financial
00:11:17
decisions that you want to make with
00:11:18
only about 15 or 20 years left until
00:11:21
retirement we want to focus on making
00:11:22
good decisions financially and that
00:11:24
means preserving our Capital so the only
00:11:26
way that we could really derail our
00:11:28
retirement plan right now now is to lose
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a bunch of money now ideally you're
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making good financial decisions into
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your 50s and now that we are in our 50s
00:11:35
the average in Media Net worth get
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pretty crazy starting here the media net
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worth for someone who is in their 50s is
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$287,400 and the average is over 1
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million at $1. 389 million again we have
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our stretch goal targets here for the
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lowend middle end and high end of the
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netw worth goals I'll put them on the
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screen and if you are absolutely killing
00:11:56
it you should have over $2 million by
00:11:58
the time you end the decade of the ' 50s
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I think there are three big goals for
00:12:02
the 50s decade here so number one is to
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seriously start retirement planning it's
00:12:07
likely that your kids are out of the
00:12:08
house now so you can get a really good
00:12:10
sense of how much you're spending on a
00:12:11
monthly and yearly basis to plan even
00:12:13
further you'll also have more time for
00:12:15
other Hobbies so for example my mom
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started taking up floral arrangement
00:12:19
classes once I got out of the house and
00:12:21
I thought that was pretty cute and what
00:12:23
I'm just trying to say is that with all
00:12:24
this extra time you're going to have
00:12:25
plenty of times to think about your
00:12:27
finances which is really great and
00:12:29
hopefully a new hobby as well you should
00:12:30
also be maximizing your retirement
00:12:32
Savings in this decade you want to take
00:12:34
advantage of your Peak earning years
00:12:35
that you have left and you want to
00:12:37
really take advantage of the catchup
00:12:39
contributions in 401ks IRAs or any other
00:12:42
tax advantage accounts to ensure that
00:12:44
you are comfortably getting to
00:12:45
retirement goal number two in your 50s
00:12:47
is to diversify your Investments even
00:12:49
further perhaps invest in businesses
00:12:51
real estate and you also want to be
00:12:53
shifting your asset allocation in your
00:12:54
retirement portfolio towards more
00:12:56
conservative picks and cash flowing
00:12:58
assets and number three I think the goal
00:13:00
in their 50s is to re-evaluate all our
00:13:02
priorities and just make sure they're
00:13:04
aligned with our future retired self
00:13:06
that means reviewing what actually
00:13:07
matters to you so is growing your net
00:13:09
worth still a priority do you actually
00:13:10
need an estate plan or life insurance do
00:13:12
you want to pay for your kids college
00:13:14
all the way through or do you just want
00:13:16
a really fancy espresso machine so that
00:13:18
you can make your $6 lattes at home what
00:13:20
actually matters to you should be
00:13:21
answered in your 50s so that by the time
00:13:23
you retire you don't have to think too
00:13:24
much about it this is also the time you
00:13:26
should be estimating your future
00:13:27
expenses and assessing whether whether
00:13:29
or not your savings and Investments
00:13:31
align with your retirement goals you can
00:13:33
also meet with a financial planner at
00:13:34
this stage just to make sure that you're
00:13:36
on track with everything going on all
00:13:38
right so by the time you hit your 60s
00:13:39
the media net worth here is
00:13:42
$439,000 in America and the average is
00:13:45
$689 million now if we go back to our
00:13:47
net worth go table that we've been using
00:13:49
in this video on the low end you should
00:13:51
be aiming for
00:13:53
$550,000 and on the high end
00:13:56
$843,000 if you're absolutely killing it
00:13:59
perhaps your household net worth is
00:14:01
close to $2.8 Million by now I think
00:14:03
there are a few main goals at the age of
00:14:05
60 and number one is to finalize your
00:14:07
retirement you want to evaluate whether
00:14:09
or not your retirement savings will
00:14:11
match up with your projected expenses
00:14:13
every year you'll also want to consider
00:14:14
your withdrawal strategy at this age
00:14:16
especially if you have traditional
00:14:18
retirement accounts where you may incur
00:14:20
some taxes on your withdrawals goal
00:14:22
number two is to reduce your risk and
00:14:23
focus on Capital preservation by the
00:14:26
time you're about to retire the goal
00:14:27
shouldn't be to take on a bunch of risk
00:14:29
to make more money but rather your money
00:14:31
will go further if you protect it so
00:14:33
sadly that means no investing in fart
00:14:35
coin or chill guy meme coins out there
00:14:38
you just have to really just stay away
00:14:40
from that stuff lastly goal number three
00:14:41
is to have a solid long-term plan for
00:14:43
your estate your beneficiaries or anyone
00:14:46
else you care about in your life like
00:14:48
your favorite Finance YouTuber me the
00:14:50
major components of an estate plan are
00:14:52
documents like a living will a
00:14:54
healthcare power of attorney and these
00:14:55
are documents that will state your
00:14:57
preferences in case something were to
00:14:58
happen to another benefit of an estate
00:15:00
plan is that it allows you to designate
00:15:02
a legal guardian for any minor children
00:15:04
that you might have so ensuring that
00:15:06
they are cared for by someone you
00:15:08
actually trust that mostly takes care of
00:15:10
everything that I want to cover in this
00:15:11
video today if you are interested in
00:15:13
joining a nice Discord Community with
00:15:16
other like-minded investors and I also
00:15:17
drop two exclusive videos in there every
00:15:20
single month as well as show you what I
00:15:22
invest in you want to make sure you
00:15:23
check out my Community all right
00:15:25
guys let me know how much you have in
00:15:26
net worth in the comments along with
00:15:28
your age and if you wanting to watch
00:15:29
that video that I mentioned earlier
00:15:31
about how looking poor is very important
00:15:33
to building your wealth I'll leave it up
00:15:35
right here and I will see you guys in
00:15:36
that video or the next one on my channel
00:15:39
lastly if you're still here make sure to
00:15:40
follow me on Twitter and Instagram I
00:15:42
post there almost daily and I can't wait
00:15:44
for you guys to follow me there as well
00:15:46
all right peace
00:15:49
[Music]
