Net worth is one of the most common ways to measure overall financial health. But net worth is closely linked to your age – if you’re older, you’ve had more time to work and save than a young person right out of college. Naturally, the older you are the higher your net worth tends to be.
Recently I got my hands on some net worth data for U.S. age brackets. I decided to make a grid to visualize the data…
This grid shows how your net worth stacks up against people who are similar to you in age (in the United States).
An example of how to interpret this graph: If you’re in the 18-24 age group, you need to have a net worth of at least $10,000 to have a higher net worth than 65% of people in your age group.
Some Interesting Observations
- If you’re in the 18-24 age bracket and have a net worth of $1, you have a higher net worth than 35% of your peers. (As recently discussed on Twitter, Ty from Get Rich Quickish pointed out that most people in this age bracket have student loans, auto loans, and consumer debt so it makes sense that most of them have a negative net worth.)
- If you’re in the 30-34 age bracket, you only need $19,000 to have a higher net worth than half of your peers.
- One out of every four people in the 55-59 age range have a net worth of less than $20,000
“Middle of the Road”
In order to be in the “middle of the road” and have a net worth higher than exactly half of the people in your age group, here’s how much you need:
In order to be “financially savvy” and have a net worth higher than 75% of the people in your age group, here’s how much you need:
In order to be a “financial powerhouse” and have a net worth higher than 90% of the people in your age group, here’s how much you need:
If your net worth isn’t as high as you’d like, start focusing on your savings rate. Look for ways to live more frugally. Be sure to focus on your income (especially if you’re young) and keep investing simple with index funds. Building wealth takes time. Here’s some more resources that may help you on your financial journey:
My personal recommendations for products and services: Recommendations
Why income usually matters more than investment returns: Here’s How Much Investing Returns Matter Based On Your Portfolio Size
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Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.
Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
His favorite investment platform is M1 Finance, a site that allows him to build a custom portfolio of stocks for free, has no trading or maintenance fees, and even allows him to set up automated target-allocated investments.
His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.
His favorite micro-investing app is Acorns, a free financial app that takes just 5 minutes to set up and allows you to invest your spare change in a diversified portfolio.
His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.
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