Is this data available in smaller ranges like 30-35 and 36-40? Feel like there is a large discrepancy in earnings/savings between early and late thirties.
I'd love to see you guys talk about physicians in their 30s. The late start to saving due to prolonged training and large school debt are a unique challenge. That training lasts through most of the 20s and often into the 30s but big increases in income after that are expected. It's tough to decide how far behind we are!
Common young doctor mistakes- buying the big fancy house with a doctor loan, leasing luxury cars, and sending the kids to private school, and exotic vacations result in low savings rates and high debt. You end up no better off than an engineer or finance worker who packed the money away at a young age. I’ve seen it many times
I have a doctor friend. She paid off her loans as fast as possible, then the bought a house, and has aggressively saved. Like I think her house was pretty unfurnished until after she got the mortgage paid off. It's very possible to jump from horrible student loan debt to much better than 10% net worth in just a few years with doctor wages. It just takes continuing to live like you're still in college for a bit longer.
I don’t think it’s any different, the chart they provide that shows how much to save at a certain age is the same no matter the profession. So what it says a 30 yr old that just starting should save, do that. Cmon, you’re a Dr, figure it out.
@@Moped_Mike many are not earning any money until residency unless they have a small part-time job. Many go in debt just to have housing and food while in school. They'll need to catch up and put more money aside after they become doctors to catch up with their peers. Their savings percent needs to be higher due to losing earned income in their 20s, and also because they will be more responsible for their retirement when they're older. Social security only pays so much.
I'm 33 and a half, by this metric i am a little under the 25% threshold, as my NW is just under 130K. 2023 goal is to hit 175K NW. Pretty good as i just started investing 25% a year and a half ago. Excited to watch my NW increase to the top 10% in a few years.
Age 34, single male, I just bought my first house last year. Current net worth approximately $108,000. Zero debt. Didn't get my act together and start managing my money correctly until 32.
I'm 35 and funny enough I was 32 when I got that light blub moment about managing my money correctly, only have my mortgage left now and should be done within a year to be completely debt free.
I've got a few questions for the comparison. When you say average net worth in your 30s does that mean by 30, 35, or 39? Those should be very different stages of saving if somebody is investing right. My other question is if you are married do you divide your net worth in half to meet where you should be at or is it still cumulative since you are sharing the same costs such as mortgage and house and such?
Thanks for the vid! when you guys say max your employer's retirement plan do you mean to contribute the amount needed to get your employer match OR to contribute the maximum tax liable amount possible? Thanks!
to get the match. If the company plan is decent i.e. good selection of low cost index funds then you can stay there for the maximum tax liable amount, otherwise put the rest in another plan :)
They mean maxing it out to the allowed limit. Getting the employer match is step 2 in their financial operations while maxing out retirement accounts is step 6. They’re good at either mentioning employer match whenever they’re referencing step 2 and only using “max” when talking about step 6
I have a question and hoping someone could answer. When they say to save $811 for age 30, does maxing out your Roth IRA count towards that or do I have to save an extra $811. Thanks in advance to anyone who helps out.
In the market I’m looking in, real estate investors put aside ~ 3% of gross rents for capex (major repairs like a new roof) and 12% for maintenance costs conservatively. Theoretically you could look up what your home would rent for and put aside 15% of that number every month to prepare for those things
Utilities can vary depending on the area and usage, sometimes even side of town. Like some of my coworkers pay 10x more for water and electric because they live in a different area. Good rule of thumb for maintenance is 1-2% of the house's value.
So I didn't things a little backward and at times wonder if I would be better off not paying off my house im 37 with 18000 student loan debt but everything else is paid for including house but I only have 80,000 retirement it sounds okay at first but that retirement is growing pretty slow I suppose the nice thing is I'm able to put the house payment to retirement now but my goodness if I would have invested in my 20s I wonder anyone have any thoughts on this and its a legit? Don't be a douch im not bragging I sacrificed my 20s to be where im at it was intentional. I guess a question is my net worth is pretty decent but is not going to grow like someone's who is invested at a higher percentage so not all net worth are created equal maybe a show breaking that down a bit would be cool and worth doing
Same here with an eventual government pension. What I do is count it as what the minimum value of it is if I retire at 50. So, if I quit tomorrow and have 14 years of service, my pension should be worth $25k a year for the rest of my life, which I should at least live until I'm 70 which equals $500k. I plan on in my same job for the next 17 years at least and my pension should be worth over $1.1 million by that time. If I live until I'm 80, it will be worth $2,000,000. Of course I could die tomorrow and it'll be worth nothing haha
Yes and no. I think you will probably get at least 1 or 2 promotions, or perhaps a career change all together. That's when that stuff started happening for my wife and I. My income at 30 vs 38 is a big difference. But if you're in the top 25%, hopefully that means you've already got good money habits!
This formula is an adjustment of the (Age * Income / 10) formula for expected net worth from The Millionaire Next Door. It doesn't really work at younger ages. For example it says a 20 year old making $50k should be worth $100k already. Adding years until 40 helps to smooth out the curve and make the number more reasonable to hit for younger earners.
Because keeping up with the Joneses means you might appear to be wealthy or have a degree of wealth (ex: a flashy yet depreciating car). Remember, a lot of "the Joneses" are actually broke, they just have big homes and drive nice cars, wear nice clothes, etc. You want to actually own assets and actually be building wealth, not keeping up appearances.
They are saying not to keep up with the joneses in terms of expenses. The net worth by age is so that you could see if you have a net worth of 10k when you’re 40 years of age you probably have some catching up to do. Conversely, if you have a net worth of 200k and your 20 then you are probably ahead of the game.
Women do tend to make a bit less due to the jobs they pick, hours worked, and years of experience. I was actually thinking similar. I'm doing decent compared to the average. Compared to other women, I'm stacking up nicely. You mention debt. I haven't seen a stat for that. I wonder how it varies. I always assumed it would be similar.
@@17h127 Women currently hold 60% of all american student loan debt. It might not be that they take different loans, but they just carry the debt for far longer
@@dirtydan6098 We're talking about 30 year old women, not established women in their 60s. 30 year olds, aka millenials, for the MOST PART have big student loan debts and have careers that dont use their degree. At this point, some of them are already divorced. We're talking about MOST women, not the 4 exceptions. Do they exist? Sure. Common? absolutely freaking not
Turning 30 this year and I really appreciate this video. Thank you and keep up the good work!
Is this data available in smaller ranges like 30-35 and 36-40? Feel like there is a large discrepancy in earnings/savings between early and late thirties.
Assume that this should be your goal by mid 30s or 35
That’s the point of the formula stupid
I'd love to see you guys talk about physicians in their 30s. The late start to saving due to prolonged training and large school debt are a unique challenge. That training lasts through most of the 20s and often into the 30s but big increases in income after that are expected. It's tough to decide how far behind we are!
Common young doctor mistakes- buying the big fancy house with a doctor loan, leasing luxury cars, and sending the kids to private school, and exotic vacations result in low savings rates and high debt. You end up no better off than an engineer or finance worker who packed the money away at a young age. I’ve seen it many times
White coat investor or physician on fire will enlighten you.
I have a doctor friend. She paid off her loans as fast as possible, then the bought a house, and has aggressively saved. Like I think her house was pretty unfurnished until after she got the mortgage paid off. It's very possible to jump from horrible student loan debt to much better than 10% net worth in just a few years with doctor wages. It just takes continuing to live like you're still in college for a bit longer.
I don’t think it’s any different, the chart they provide that shows how much to save at a certain age is the same no matter the profession. So what it says a 30 yr old that just starting should save, do that.
Cmon, you’re a Dr, figure it out.
@@Moped_Mike many are not earning any money until residency unless they have a small part-time job. Many go in debt just to have housing and food while in school. They'll need to catch up and put more money aside after they become doctors to catch up with their peers. Their savings percent needs to be higher due to losing earned income in their 20s, and also because they will be more responsible for their retirement when they're older. Social security only pays so much.
I'm 33 and a half, by this metric i am a little under the 25% threshold, as my NW is just under 130K. 2023 goal is to hit 175K NW. Pretty good as i just started investing 25% a year and a half ago. Excited to watch my NW increase to the top 10% in a few years.
Been waiting for this highlight!
Age 34, single male, I just bought my first house last year. Current net worth approximately $108,000. Zero debt. Didn't get my act together and start managing my money correctly until 32.
keep at it my guy! In an almost identical scenario myself.
Sounds like you've done a sold job in two years of getting on track. Keep it up ^_^
I'm 35 and funny enough I was 32 when I got that light blub moment about managing my money correctly, only have my mortgage left now and should be done within a year to be completely debt free.
Hi Money Guy team! How about making a version of the financial order of operations for your international audience?
Greetings from Norway
I’m 31. If we count our house and car in our net worth, I’m 20k short of the 10%. Makes you feel a lot better about your financial situation
I've got a few questions for the comparison. When you say average net worth in your 30s does that mean by 30, 35, or 39? Those should be very different stages of saving if somebody is investing right. My other question is if you are married do you divide your net worth in half to meet where you should be at or is it still cumulative since you are sharing the same costs such as mortgage and house and such?
've always been curious if these numbers are per individual or per household. Can you clarify that?
They said income numbers were individual and net worth were household when they did the live stream.
I am almost 37 and feel like I have done some things right, but a lot of things wrong
Thanks for the vid!
when you guys say max your employer's retirement plan do you mean to contribute the amount needed to get your employer match OR to contribute the maximum tax liable amount possible? Thanks!
to get the match. If the company plan is decent i.e. good selection of low cost index funds then you can stay there for the maximum tax liable amount, otherwise put the rest in another plan :)
They mean maxing it out to the allowed limit. Getting the employer match is step 2 in their financial operations while maxing out retirement accounts is step 6.
They’re good at either mentioning employer match whenever they’re referencing step 2 and only using “max” when talking about step 6
@@kennycrump thank you so much!
I have a question and hoping someone could answer. When they say to save $811 for age 30, does maxing out your Roth IRA count towards that or do I have to save an extra $811. Thanks in advance to anyone who helps out.
That's total invested, regardless of where you invest it.
@@bryan__m thank you for your response.
For the 25% rule for housing, when buying a house how should we estimate how much to factor in for utilities and maintenance?
In the market I’m looking in, real estate investors put aside ~ 3% of gross rents for capex (major repairs like a new roof) and 12% for maintenance costs conservatively. Theoretically you could look up what your home would rent for and put aside 15% of that number every month to prepare for those things
Utilities can vary depending on the area and usage, sometimes even side of town. Like some of my coworkers pay 10x more for water and electric because they live in a different area. Good rule of thumb for maintenance is 1-2% of the house's value.
Is that chart based of a 30 year old or a 39 year old?
Presumably the average, so a 35 year old.
So I didn't things a little backward and at times wonder if I would be better off not paying off my house im 37 with 18000 student loan debt but everything else is paid for including house but I only have 80,000 retirement it sounds okay at first but that retirement is growing pretty slow I suppose the nice thing is I'm able to put the house payment to retirement now but my goodness if I would have invested in my 20s I wonder anyone have any thoughts on this and its a legit? Don't be a douch im not bragging I sacrificed my 20s to be where im at it was intentional. I guess a question is my net worth is pretty decent but is not going to grow like someone's who is invested at a higher percentage so not all net worth are created equal maybe a show breaking that down a bit would be cool and worth doing
How do you factor in my union pension of $1400 a month and growing
Same here with an eventual government pension. What I do is count it as what the minimum value of it is if I retire at 50. So, if I quit tomorrow and have 14 years of service, my pension should be worth $25k a year for the rest of my life, which I should at least live until I'm 70 which equals $500k. I plan on in my same job for the next 17 years at least and my pension should be worth over $1.1 million by that time. If I live until I'm 80, it will be worth $2,000,000. Of course I could die tomorrow and it'll be worth nothing haha
So if I’m 30 and I’m in the top 25%… I technically have 9 years to catch up into the top 10% I guess
Yes and no.
I think you will probably get at least 1 or 2 promotions, or perhaps a career change all together. That's when that stuff started happening for my wife and I. My income at 30 vs 38 is a big difference.
But if you're in the top 25%, hopefully that means you've already got good money habits!
@@fonz-ys6xu you could say that. Thanks
Why isn’t the formula just years until 50 instead of 10+years until 40 😂
This formula is an adjustment of the (Age * Income / 10) formula for expected net worth from The Millionaire Next Door. It doesn't really work at younger ages. For example it says a 20 year old making $50k should be worth $100k already. Adding years until 40 helps to smooth out the curve and make the number more reasonable to hit for younger earners.
"Try not to become a person of success, but rather try to become a person of value." -Albert Einstein
I’m top 10 nice
Why do I care how I compare to my peers if I'm not supposed to keep up with the Joneses...hmmmm 🤔
Because keeping up with the Joneses means you might appear to be wealthy or have a degree of wealth (ex: a flashy yet depreciating car). Remember, a lot of "the Joneses" are actually broke, they just have big homes and drive nice cars, wear nice clothes, etc. You want to actually own assets and actually be building wealth, not keeping up appearances.
They are saying not to keep up with the joneses in terms of expenses. The net worth by age is so that you could see if you have a net worth of 10k when you’re 40 years of age you probably have some catching up to do. Conversely, if you have a net worth of 200k and your 20 then you are probably ahead of the game.
40
This includes women though, who drag those net worths way way way down. (Low income and HUGE debt)
You sound like an incel
Not talking to the right women then
Women do tend to make a bit less due to the jobs they pick, hours worked, and years of experience. I was actually thinking similar. I'm doing decent compared to the average. Compared to other women, I'm stacking up nicely.
You mention debt. I haven't seen a stat for that. I wonder how it varies. I always assumed it would be similar.
@@17h127 Women currently hold 60% of all american student loan debt. It might not be that they take different loans, but they just carry the debt for far longer
@@dirtydan6098 We're talking about 30 year old women, not established women in their 60s.
30 year olds, aka millenials, for the MOST PART have big student loan debts and have careers that dont use their degree. At this point, some of them are already divorced. We're talking about MOST women, not the 4 exceptions. Do they exist? Sure. Common? absolutely freaking not