Great content in your channel, Erin! I’m 53 and my wife and I reached $1M net worth in 2017, five years later it’s $2.4M. Our yearly salary is a little over $100K. We drive older cars, cook at home, eat leftovers, and have 2 in college. We saved for college and our boys help by working. They will graduate debt free.
My demographics are similar to yours, and my wife and I also live a very modest lifestyle. I would love to know how you grew your net worth so much over the past five years. I'm guessing real estate investments.
@@zzanatos2001 Glad to hear, Zach! My N.W. grew through a combination of saving, 401(K) and Roth investment growth, and home equity. We have no other real estate.
Much of your story mimics my wife and I except we are a decade older. Sincerely, good for you. My wife and I were both self employed for most of our adult lives (rental property, me-CPA, her). In dealing on a personal basis with literally thousands of individuals and couples over 40+ years "lifestyle spending- carelessness" is the number one mistake amongst all income earning groups. My wife had a surgeon client making almost one million a year declare bankruptcy when his emergency room nurse wife stopped working to care for their new born child. New Mercedes always for both, etc., etc., etc.,. I love to hear stories like both of yours, what a stress reducer!!!!!!
“When you look to buy something do you need to look at the price tag?” Yes, that’s how I got into this category, and if I stop looking at the price tag then I will probably fall back out of it.
yeah well said. We have over 1mil net worth and eat home and buy used late l model cars and compare price everything we buy. We have no cable only rabbit ears and are fine with that.
I no longer look at price tags. I know instinctively if I can afford it or if it is worth its price. Really, today the only big purchases are for ‘assets’ I believe will grow in value over time or at least not lose value. The smaller costing things in life are of no consequence. For example, I don’t look at the price of gas, I figure I have to buy it anyway. Like food. I just stick with the middle grade of gas and have been doing that for more years than I remember.
NET WORTH 2:34 Poverty Class = $6030 4:27 Lower Middle Class = $43,760 6:26 Middle Class = $104,700 7:47 Upper Middle Class = $201,800 9:19 Upper Class = $608,900
It's funny I stumbled across this video. I was just telling a friend the other day most people are doing well to reach a net worth of zero. He looked at me like I was nuts until I explained that means no debt. No credit card balances or mortgage. I'm a janitor with a net worth of 7,000. That might be just a smidge more than poverty level, but I'm actually doing better than some of my friends who make a lot more, but have tons of debt. I'm free to grow my wealth. They can't even begin to do that until the debt is gone.
I couldn't agree more. In my late forties I had a middle class job and a net worth of about $60K in the hole. The stress... the debt collectors... it was horrible. But as soon as I committed to cutting my expenses to the minimum and attacking my debt one at a time it got better. I tracked everything on a spreadsheet and stuck to it. It took 5 years, but when I became debt free it was an incredible feeling. Once the debt was gone I took that same discipline to start accumulating wealth. Now, 15 years after eliminating my debt, I've retired (age 59) as a multi-millionaire, and I'm just a year from heading around the world in my sailboat. One smart/lucky move I made was investing a big chunk of my savings in Tesla, which paid off big. But even if I had played it safe I could have retired comfortably. But just to reiterate... debt is enemy number 1.
No mortgage means you add in the value of your home to the asset side of the balance sheet. Owning a home free and clear with no other debts puts net someone well into a positive net worth.
Great Video ! I always got depressed because my income rarely went over 50k ......but my net worth of 650k gives me a more optimistic approach to retirement
It's always important to understand that income doesn't always equal wealth. A friend of mine is a lawyer who makes over $140,000 a year, but he and his family live month to month. How you live and where you live is vastly more important than outright income.
You've made it! Your income of 50k - after taxes, social security, and savings contributions probably left you with high thirties. 650k in assets @ 4% would come to 26k per year spendable income (plus some asset growth). Add a (smallish) 14k per year in social security, that brings you to 40k (before tax), that's probably 35k or such, but you also won't have less health insurance costs (3k per year?) with Medicaid. If you are not retiring tomorrow but a bit later, you'll likely be better of (financially) in retirement than during your working years. You accumulated assets worth 13x your annual income! Well done.
Im getting there myself at 31 I build my house with my own hands on 5 acres. The 5 acres cost me 30k and is the only debt I have. The house is done a year later and the estimated value of the property has jumped to 150k. I only make 50k a year working two jobs so I was surprised to see I am not that broke.
Interesting video, I’m 69 single, never married, no kids… had a decent job… have net worth a little over 2 Million…with pension and good social security…feel so blessed…
Every High School student should be required to watch this video at least 1X each school year. Then, another 10 hours of class time should be devoted to research, discussion, and better understanding these concepts.
My husband and I are 33 and 35. I’m a couple weeks from delivering our 2nd baby. I’m a SAHM and he’s an NCO in the military. Our net worth (based on my quick calculations) is right around $105,000. We’re not wealthy, but we have ZERO debt. We stick to a monthly budget, make healthy retirement contributions and other investment contributions. Despite the craziness of the financial market, I feel secure with our future because we plan ahead and make the best decisions we can.
Always smart to plan ahead. I'm glad there are still people who think like this. Get debt out of the way because no matter how good your networth is it'll always get dragged down by debt.
@@oliverheaviside2539 Definitely. That's what I plan on investing on once my credit is in a good position and once house prices drop. What I'd recommend would be for you to get a loan for a house, rent it, let the house pay itself, and once you pay it off you can either keep renting it, or sell it by payments with interest which will make the buyer pay more money than the house is worth by the end of the contract deadline.
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life
When I saw testimonies all over the place I thought it was all made up stories till I saw my next door neighbor sharing her testimony I was convinced and said let me try hima out. I don't regret the move I made because I invested my money with the right person
Chris is not the kind of person that will tell you with just $500 you can made $45,000. He tells you all you need to know and how he can help you with the little you have
Net worth is heavily dependent on age, so maybe a breakdown for age brackets would be useful. $100K is a lot for an 18 year old, but too little for a 60 yr old...
How is it too little for a Sixty year old??? At 60 you shouldn't have a house payment or a car payment. I retired at 60 all my stuff paid for, with $160,000 in savings. Between Social Security and one of my retirement plans I have about $2,800 bucks a month coming in. Depends on how good you are with your money.
@@timnewman1172 if you have a $1M house and still owe $100K, but you have $200K in the bank, then your net is $1.1M. If you take $100K from savings and pay off the house tomorrow, you still have a net of $1.1M, Net isn’t a ratio, it’s assets - liabilities. Shifting from one pile to another doesn’t affect the net.
Long ago I adopted a herd mentality approach to net worth. I examined the top 10% to determine all of the common characteristics, to see what I could replicate. Here's what most of them share, business ownership, investment real estate, stock or mutual fund investing, and higher than average income (which was a byproduct of the other 3). Intentionally accumulating those income producing assets propels net worth far more than a 35 year career employee can save. After 25 years, those assets began to provide more income than I could've ever earned as a career employee, in upper management.
@@JasonG123 "and 4) their parents were probably rich or had an above average net worth" Maybe or maybe not. My family was lower income. Only one parent graduated high school. I was a first gen college grad. After college, I got a job and I also tried several different side gigs, and one grew into a legit business, which ultimately replaced my day job. Total cost to start that business was $7,700. In my opinion, business ownership can be the quickest path to grow net worth.
@@DaveM-FFB congrats, I am in the exact same boat as you were. First gen college grad, grew up single parent in bad part of town, working on side gigs now as I work my regular fulltime and hoping that something takes off. I agree that branching away from the status quo is the fastest way to break out of the cycle.
@@gipnor sorry, his podcast is for entertainment purposes and yes, he's rich, but just because he's rich doesn't mean he's right or using correct data. Also, he has an agenda to make money off of you, so of course he's selling you what he wants you to believe. Real life is different
It also depends on which geographical region in USA. Here in California, $600K net worth is at best middle class but could well be upper class, for say, in Alabama.
8:53 would have been true if we are in the 60s. I'm a "multimillionaire" and I still shop on store coupons and often beat myself to death whenever I for not getting a bargain. Just because I can afford it doesn't mean I want to pay for it. A million dollar is not something to write home about these day.
Our feelings of security have increased as we've worked our way up, but my husband and I still retain many of the frugal habits we practiced during our aggressive saving years.
As a single 24 yr old I can agree that financial habits are the biggest factor for how fast one can accumulate wealth. I myself am currently at a 80k net worth after working for two years and paying off my student loans. My income is not that high 70-80k but I have been saving consistently from day 1. Some of my older married relatives don’t have a net worth/savings greater than mine and that is because they like buying cars (leasing one every few years), going on vacations and just generally spending more. I heard someone call this lifestyle inflation and honestly I believe this is what holds most Americans back.
I'm with ya on that Angel! I am also a single 24 yr old and I have a $140k net worth. I have 5 years of working with an avg income over those years probably around $40k-$45k. I wouldn't say I was saving from day one, but I did pay down my debt as fast as I could and I do not spend much. I didn't do anything special, and I even set myself back a solid $15k by going to college. The only lucky opportunity I've had is family rent between $300-360 a month throughout the years. Good habits and an "I care" attitude make all of the difference. Building wealth is easy and fun.
Thank you and other UA-camrs who are trying to turn the tide on American's as horrible savers. My husband and I are 56 and our net worth is north of 3M and we supported our daughter through college and helped her buy her first home. All by saving when we first started working in the '20s, nothing fancy, no new cars, a nice house but did all repairs ourselves, no extra stuff and we live a great life. In our late 20s and early 30s, many of our friends would buy expensive stuff (boats, Sea-doos, label brand items) but we did not. We splurge on memories, Europe, Grand Cayman, Australia, Cruises, we travel, that's our fun. Who cares if my shoes do not name brand, I have the financial freedom to do what I want for the next 30 years debt-free.
Great Video Erin! I look more at our Net Worth and I teach people here on UA-cam to do the same! Knowing what you own and how much of it that you own is VERY important! It's the same with debt! Our Net Worth crossed $1 Million last August and it was because we had the money working in stocks, real estate and crypto. We started low income and through education, networking and hard work..have been able to make more and have that grow on the back end for us! Like you said..it's all about money management! Again..LOVE your videos Erin!! Keep the content coming sis! ❤️
My neighbor across the street would have at least 40 times a year of all sorts of services to their home, such as tree pruning, plumbing, drywall repair, electric, pest control, food delivery, and dry cleaning and delivery etc. I have been wondering how much he spends on those kind of things a year because I do all those work myself.
@Homo Sapiens. Truth. I do a lot of repairs around the house myself and I know it has saved me lots of money. Most of it you can learn from the internet these days. The lady across the street, who is younger than me, is paying a fortune for people to do work for her. And then she complains that she is upside down on her mortgage. Stop having restaurant food delivered and do some yard work yourself. LOL. It's not difficult.
I'm retired. I owned and operated an apartment building for many years, saved a ton of money doing some jobs myself. I recently found my log book and counted 47 hot water tanks that I replaced by myself in that building over the years. I always had 3-4 new ones on hand in the maintenance shop. Many of them started leaking on Sunday for some reason. Try getting a plumber on Sunday. My goal was to have hot water tanks replaced within 8 hours of receiving a call. I put drain pans under them all along with earthquake straps. The pans drained though pvc tubing outside the building near the air intake grill. Sometimes when I was walking by and saw water dripping, I knew what was in store for me in the next day or two. I sold that building a few years ago and never looked back. I'm almost 70. I just changed my own garbage disposer 3 days ago, boom boom, over and done, no hassles, no cost. I had 8 brand new Badger 5's in boxes that I kept after selling the other building. That batch should last a lifetime.
Hi Erin....very well done. I've been working in Finance for 28 years and I know most of what you are talking about. However, I rarely see anyone who can present it as well as you. You keep it interesting and it is easily understood be people with less knowledge. Thanks for all you do.
In the past racists in Europe to Naz i Germany organized progroms to attack those that lent them money in order to avoid paying them (typically against the Je ws) Today we see the same racist mentality happening again but this time, the narrative of dehumanization is directed against the Chinese It is shameful to think that we humans are no better than 80 years ago despite swearing to never repeat the mistakes of the Na zis
Love this video! I FIRED at 38, my husband loves his work, so he keeps working. I got so excited when you mentioned FIRE. We stared seriously saving and investing about 10 years ago. We had rather unimpressive salaries (between $18K and $90K) over our 15-year work history and that was enough to allow both of us to FIRE before the age of 40, if we wanted to. Granted, we don't have kids, so that helps. Your breakdown of the income brackets reminded me of what my research method's professor said during the 1st year of my PhD program when he commented that everyone answers on surveys that they are middle class. Your breakdown also made me realize we are at the top of the wealthy class. And there is nothing special about us. You are exactly right. Barring major discrimination or disability related issues, almost anyone can join the middle class.
Wife and I have a net worth of $1.6 million. No mortgage (house), no credit debt, both vehicles paid cash. Truck is 6 months old, our SUV is 2 yrs old. We don’t see ourselves in a class. Both educated and well paying jobs. No keeping up with Mr and Mrs Jones. Solid retirement plan. Enjoyed the video.👍
Erin, Another great pod cast. I would be interested in a view of the average net liabilities both by age and among the 5 classes of American families. For me my net-worth number is influenced a great deal because I fully own my house…but that value is not really liquid. So my living style is more effected by income like pensions, social security, and investment income. Owning a home that has no mortgage and having no other debt upon retiring is the biggest factor for me to a very comfortable retirement.
I don’t bother including the value of my house in my net worth because I don’t plan to sell or encumber it. Adding the equity of my unencumbered house to my net worth would likely warp my assessment of my net worth.
There is some data about high net worth individuals which is apparently 1 million outside of home equity and retirement. The home value should definitely be included in your net worth. It’s “return” is the rent you don’t have to pay
I was wondering the same thing. If home equity is part of net worth a lot of people who live modestly on median incomes are considered part of the wealthy class. With the crazy appreciation of home values the last couple years it isn't all that hard for someone earning under $100K a year to have over $600K in home equity. My house went up over $300K in value just last year. As you state it's not very liquid unless you borrow against it or sell. The big issue is property taxes which are based on appraisals. People are being taxed on unrealized capital gains. We're retired and seriously thinking of selling our home to get out from under the brutal property taxes we've had the last couple of years.
@@TimRileyGPlus A home's not really an asset unless it makes money for you. If you live in the house, then it's not really making you money. It has annual maintenance costs, utility costs, property taxes, and insurance costs. Those costs are real and subtract from your net worth every year, unlike home appreciation, which is only a number on a piece of paper that only becomes real after you sell the house or do a reverse mortgage. Most people think home ownership is great, but people really need to look at this with both eyes open. If you financed your home, you probably paid at least twice what it cost to the mortgage company. You've had to pay insurance in case the home gets damaged or if someone is inured on your property. You've had to make major repairs like replacing the roof, plumbing, electrical, evac and structural problems. You have to pay for electricity, water, heating, and waste disposal. And then there's property taxes, which is a story all to itself. When you add all that up over 30 yrs, is the home really something that adds to your net worth? This is why I don't include it in my net worth calculations.
10 years ago I was under 20k net worth. Today I'm squeaking into the upper middle class. Its all priorities, habits, small changes sustained over time. Give me another 6-8 years i could very well be in the wealthy category. This blows my mind. My advice is to write your goals down twice a year. It has a profound effect written down. Great video. 🙂
This makes me feel much better about my finances! I don’t bring home as much money as I would like. The last video you did regarding this topic with annual salary put me squarely in the middle class but my net worth puts me in the wealthy class. I never really looked at my net worth as putting me in a wealthy class. I was guessing I was doing better than average, maybe upper middle class.
Thanks, Erin. I am very surprised of the net worth in the upper two categories. I know it’s extremely hard for those with low incomes to save, and as you said in the video some lower income earners save a lot. I would have expected those with much more disposable income would save more. I guess it shows how varied values are among people.
Hey Robert! I'm always surprised how low the figures are at the upper end so these lists! Sometimes it. seems like wealth is very prominent - but then you see these numbers and it just doesn't seem to add up.
I think the stats are very deceiving as in general higher net worth individuals live in higher cost of living locations. You may earn $250k a year in So Cal, but your cost of living is triple of that in Nashville TN. In addition your taxation rate as well as breaks on tuition assistance and so on are limited. Thus, your ability to save each year is limited. Since 2020 there has been a massive rebalancing of income / location due to Covid and legitimate remote careers. People finally figured out... you can do a lot of jobs run a number of businesses remotely.
Really interesting content! Maybe you could do a video about what size nest egg you need for different levels of retirement income. Rather than comparing ourselves to each other, we can compare ourselves to who we want to be.
Great attempt to educate people. Albert Einstein once commented that the most powerful equation in the world was not the famous E=MC^2 but the simple compound interest formula FV = PV * (1+i)^n where: FV = Future Value PV = Present Value I = interest rate or earnings yield n = number of compound periods. This simple formula is the power behind converting small sums over many compound periods to grow net wealth. I learned this as a Sr Chem E student because it's also the basis for discounted cash flow (DCF) and drives all capital allocation in the global economy.
I just stumbled on your channel and appreciate the sound information you provide. Now in retirement, one area most financial advisors don’t talk about is health. Maintaining health throughout life can be another way to accumulate wealth and save. Perhaps a video that discusses health “net worth”.
Wow Erin. 40 percent of people making over 100K and living check to check! I don’t feel so bad now. Anyways congrats on the 100K views on that recent video! You deserve it. You are sweet, humble, and a natural for this!
Great video. Loved your thoughts Erin. I am in a high cost of living area on the coast in Ventura County California. Your thoughts on making over $100,000 and not having any money saved are spot on. My wife and I have a household income of close to $200,000 and yet after taxes and living expenses their isn't much left. We do fund our 403B accounts at work and those have grown significantly over the years. We own our home as well, although I am of the mindset that we need to live somewhere so I don't include our home as part of our net worth. Some may disagree with that. I see a home as something that cost me money to live in and not as an asset. If I were to sell the home then it would become an asset although I would need to then purchase another home. That being said I am told that we have close to $500,000 in equity on our 60 year old home. LOL
Used to live in that same City, it has always been high relative to income. If you have family commitments stay. Otherwise you know your answer. Hard to leave those sunsets.
@@selrahc2061Sorry for the late reply. I seem to neglect responding in a timely manner. Yes family commitments do keep us in place. Daughter is still in high school and two other kids in college locally. At this point staying is the priority for us.
Awesome video! 🙌 At 53, my wife and I have a current net worth of $1.2M. According to your scale, we’re in the top 20%. Believe me Erin, we live close to the Bay Area, and we certainly don’t feel wealthy.
Anyone can earn a dollar, not everyone can save it. This is the difference between rich and poor. I came to the USA (legally) with a plan, many years ago with nothing but a suit case. I got educated while working multiple jobs which got better as my education made me more marketable. Today I would say I fit in top 10%. Decide what you want to do for living, as doing something you hate regardless of pay will make you unhappy. Save your money and don't waste it keeping up with Jones'. They live off of credit card... Lastly, life should not be all about the money. Some of the richest people are very miserable. True wealth is deep inside you, not at the bank. But the money does help...no doubt.
Don't forget the regional impact on class. 100k in New York and you're almost impoverished. 100k in rural areas, or many small to medium sized towns, and you're upper middle class.
200k in bergen County is 100k Bonners ferry Idaho. In NJ After federal , state, property , ss, open space tax , etc net is 48 cent on the dollar . No wonder so many have moved to Pennsylvania, Florida etc.
Erin is fun to watch simply because she does the research. I have my daughters watch her channel when a lesson needs to driven home. That said, at 8:56 she says that the upper middle class probably does not look at a price tag when purchasing something. As a retired blue collar household with a net worth well north of 2M I always look at the price tag. in our case we could not have a comfortable retirement without paying attention to where the money goes. Although the hardest thing I needed to learn when I retired early was learn to spend the money we saved.
In order to accumulate any kind of net worth you need to be conservative and price conscious for your working life. The fact that you retire and have a certain level of security, does not change your financial habits of 40 years. I thought the same thing we she mentioned price tags.
Erin - your comments regarding knowing how to handle money wisely as being more important than the amount of income one makes rings true in my observations of many people over 40 years of working. My wife and I loathed debt. We built our house with our own hands and finished it in our early 30s and never had a mortgage. That allowed a massive savings rate as most of our paychecks went into retirement savings and other investments over the next ~25 years. We were early versions of what are now called supersavers. It allowed us to retire at 54 /56 and worked out better then we ever imagined. We drove economy cars for a decade. We lived well and traveled some, just not some place exotic routinely. If we went to Europe, we'd find bargain trips in off season - for example we had a week in Italy for about $1000 total a few years ago. We go to Maui, but when there we catch the weekly ads and coupon shop and can keep the costs similar to when home, so it is mostly lodging and flights. We love to snorkel and have our own equipment so that is a free activity when there. Paradise on a beer budget, sunset looks the same ;) Several years ago I was joking with another retired supersaver friend and referred to him via the old adage that he was so "thrifty" that he probably had every dime he ever made. That got us thinking and we realized that in some ways it was possible to achieve. We started the "every dime club" where the goal is to have your net worth (not including the house) be at least as much as the total lifetime earnings reported in your individualized online Social Security account. Obviously you can't just save to get there, you need to have invested well and let compound interest do the heavy lifting. But we decided it was possible to achieve. My wife and I each crossed that mark and joined the club in our early 60s. We had good jobs, not even doctor money let alone anywhere near that of the 1%, but our lifestyle of living below our means eventually get our net worth there. Everything I read about compound interest back in my 20s has been true and it is an amazing thing that I wish more young people would learn about and take advantage of. We trained out kids, and I try to share it with young people when the chance arises. It can set you free and get you into that "every dime club."
Erin, I’m really impressed! It wasn’t long ago in one of your videos you were telling us that you had 100,000 views on all your videos and now just one has achieved that! Congratulations ! I watched your other video and wasn’t surprised to find myself in the middleclass as an income earner but was really surprised to find myself in the wealthy category in net worth. I don’t feel wealthy but I feel very fortunate. I’m near retirement and I can’t say I feel ready to retire . It is an uneasy feeling but I have to trust that as we go Into a more fixed income that all will work out. Thanks for what you are doing and I think the numbers are showing that many want to hear the message that you have.
My husband and I are retired, our house and cars are paid off, the oldest car is 5 years old. We've saved, have a home that's probably bigger than we need, but it's paid off, so, who cares. Here's the thing, we can live on our SSI and put away 1k per month, we don't touch our savings. The 1k per month we put away pays our property taxes such are 4k-ish a year right now, what's left over goes to our savings account. Our utilities are paid from our SSI as are groceries and eating out (which we haven't done much because of the virus). Anyway we're doing MUCH better than I ever thought we'd be doing. Our monthly payments for our health insurance also comes out of the SSI. I almost forgot about that. We can do what we want. We've held up a trip to Italy and surrounding countries due to covid. That vacation fund keeps growing. I think having a mortgage free home is the key to anyone's retirement.
I was very surprised that the top 20% was only $600,000. I think most people would look at that without a number and say the top 20% would have to have several million dollars. Now, if your net worth is $600,000 you more than likely don’t see yourself as uppee class. Or, maybe I can't see it and others do. Great video, and glad you used the median. And it’s funny, I was just about to type something about the 150,000 views video 🤣. That's awesome! Big congrats, Erin!
Net worth is not just assets, but liabilities too. If you're thinking the upper 20% have millions, you may be right. But many people have debts too -- loans, accounts payable, wages you pay your employees if you run a business, etc.
I was pretty surprised by the $600k mark as well…it just seems so…low. The US Census Bureau defined these categories. I would guess most Americans don’t start to “feel” wealthy until maybe $1.5 or $2 M…maybe more? I mean there are so many factors at play in that feeling.
Love the video! Since this can be local to where you live, by age, married, have kids, whatever situation you are in. I think you should do a series of this by states or region of the United States.
This is a good delivery of this content but location also plays a large factor determine which quintile you're in. Upper middle class in the middle of American is similar to living paycheck to paycheck if you live in SF or NYC.
There is a thing called "net worth poverty." If you are "net worth poor," that means your net worth is 1/4th (~$4k) of the income poverty line (~$13k for singles). A person who is "net worth poor" may not be considered "poor" in income. As your video says, a $100k income could still mean you live paycheck to paycheck (and/or have unpaid car loan, student loan, home, etc.) I've heard of some studies that showed that net worth poverty had a greater impact on a child's well-being than income poverty. I've been trying to find a copy of such a study but haven't found it.
Another good video. I’ve always said it’s not what you make, but it’s what you invest. I saw so many people my age buying the latest toys, the biggest houses, a new car every three years. I did basic investing and recently retired. I’m well into seven figures of net worth with no debt. I graduated college with $1,500 in my bank account. That’s all I had in the world. I obtained a government, and paid my son’s college. Nothing fancy, just discipline and not relying on anyone else to take care of me.
That last part is golden… “just discipline and not relying on anyone else to take care of me.” That’s what I wish more people listened to! That’s all it takes! 🙌 asker said than done for most I suppose though
Your 100k views are well deserved, Erin! Congratulations! It’s no surprise to me, though, as you talk about money in a non-judgmental manner. Keep up the great work!
I think net worth is a more holistic measure, but factoring in a home really changes things. Whether you inherited property has a *huge* impact on your quality of life. People who don’t have to pay rent (just taxes, maintenance, etc. but no mortgage) means you have significantly less debt than mortgage-havers and more wiggle room for discretionary spending. I like the net worth assessment, however, because it takes account how much you actually save/invest instead of solely how much you earn. I am 25, make $63K but have a lower middle class net worth. However, I know people who make significantly more and have a negative net worths. Basically, I think the net worth metric is more holistic but much easier to skew (with the house).
My mom passed on Jan 11th due to cancer at a pretty young age of 57. She was always a saver and investor but most of her life was in the lower income range due to having me at a young age. When she passed I realized her investments and savings instantly put me in the upper 20% of wealth that you mentioned. It’s interesting since I never new this about her. I think her highest pay was $16 an hour. So to have that much wealth at age 57 shows exactly what you mention in this video that you don’t have to be wealthy to build wealth. Personally I’ve always worked on building higher pay checks rather then saving but I have realized I need to do both. Also I have to say this is the first video I have seen of yours and something about you is very kind and smooth to listen to. Take care and keep it up.
Great video! It is interesting according to your video based on income my household is lower class, according to this one we are middle middle class. Last year we paid off our mortgage and own our cars outright. So it is all net worth!
There are really two key strategies in accumulating wealth: minimize debt, and invest early. I paid off my student loans in one year, with $30k salary as a pediatric resident. This allowed me to pay off my mortgage in five years instead of 30. When I bought my second house, it only took me one year to pay off the mortgage. I bought stocks (Intel and Microsoft) with my very first paycheck. By age 45, I became a multimillionaire. One can never become wealthy by being frugal. One will never become poor by being generous.
Thinking out loud. If 10% of upper middle move to wealthy class, by definition of statistics, the whole distribution would have to be recomputed such that the wealthy class is still 20% and upper middle is also 20%. Therefore, it isnt really a thing that one can switch classes after achieving that median number, because that is a moving target. Your point about the behaviors that defines these classes! Absolutely fantastic way to look at it. I relate to that myself. Before watching your video, I know that I am a very high income earner and can afford many things, but I never thought myself in the wealthy class. I am in my late 40s and way past that 600K mark. This video help me put things in perspective. Great job!
Thanks for your thinking out loud, it's so true. The census bureau would just re-tabulate! Congrats on your hard work and savings thus far!! 👏 I'm glad you enjoyed it!! 😊
My definition of rich has always been: the ability to maintain a reasonable standard of living without working. However from there, there are three kinds of rich, rich (lower case r). Can maintain standard of living but still need to maintain a budget. Rich (upper case R). Can maintain without worrying about a budget but doesn’t live extravagantly. RICH (all caps). The sky is the limit with no thought about living luxuriously.
Present value your guaranteed income into your net worth . Example if a husband and wife are collecting a social security benefit of 50k annually and another 30k from a pension for a total income of 80k the present value on this income following the 4% rule would be 2million dollars .. .
Good point. I brought it up also after you. Most don’t understand the 4% rule though. So I usually take the 80k and just say one will get this annual amount for perhaps 10-15 years in retirement before croaking. Maybe 20. So simple math 80k x 15 years = 1,200,000. The number is a lot different and more conservative and it’s easier for others to understand the concept of future income flow.
My husband and I never made much money. I read everything I could find on frugality. Two kids went to private colleges, one went to a community college. Find friends with similar interests and values. Tina, Al's wife
I like videos like this with a breakdown of how your net worth can affect your decision-making thought process based on the cost of whatever it is you're buying. I don't think we take into account how subjective that process can be based on an individual's goals and how they see their current financial situation. I know people who've hit that roughly 100k net worth threshold, and they're convinced they can live pretty much like millionaires because to them, that easily qualifies them for an easy to pay, low-interest monthly payment on that new car, AND new motorcycle, AND new boat, while having a little $10k-$20k safety blanket in the bank. They give off the illusion that they have more like a $500k net worth because they're constantly seen with brand new vehicles and higher end stuff in general. For me, I'm somewhere just above that upper middle class number, and because my goals are to own a couple of larger properties by the beach and in the mountains with zero debt, even until I hit a $2-3 million dollar networth, I'll be driving old reliable $7500 Silverados and paying cash for any single thing I ever want other than interim-level properties. It's all about priorities, goals, and subjective financial viewpoints.
Will those properties be rentals? Otherwise buying PROPERTY is debt( maintenance, property taxes). Mortgage free is not debt free when you're paying taxes to keep the property
@@JK20239 Great point, I'm sure I'll end up doing the occasional Air BnB rental on them which will offset the property taxes and maintenance, but on the other hand, I don't really feel a desire to work past about a 7 or 8 million dollar net worth, and as of now, those two properties are kind of my aspirational peak (with a few other smaller assets I have in mind as well). I just feel like I'd rather get to about 48-50 years old and then cut back my commitment to working by about 60-75%. It's weird how we all live life as if we'll see 85 or 90 years old, but most people pass in their 60s and 70s. I won't work myself to death personally, and even at age 33, I can feel experiences becoming more important than wealth to me. Hope you have a great one.
I make around $55K @ 41 as a systems administrator. I recently crossed the $500K threshold for net worth. I am not feeling that upper middle class. Most of my "wealth" is from the house I bought in 2012 @ $245K (refinanced in 2016 @ $310K but throw every dollar I can to pay it off) which is now worth about $650K. I am very cognizant that the value of the house could crash by 50% before the end of the year. I don't believe I will ever be under water. Best way to get there is by not spending what you don't have to. It also helps having a spouse who is also aligned with this goal.
I am very close to having a $1M net worth, but living in CA I certainly don't feel "rich". Most of my net worth is tied up in my house. I bought my house 6 years ago and it has shot up about 500k in this hot real estate market.
I've always thought of my net worth as "comfortable". Based on your metrics I'm wealthy. But I don't live like I'm wealthy, because I don't feel wealthy. But wealth is relative. My father died when I was 5 and we struggled financially. I started working when I was 12. I did not go to college, just worked and was able to retire at 52. I reuse plastic bags. I will cut the toothpaste tube open to use every last bit. Anything that comes in the mail with a blank side becomes note paper. I don't spend much on cloths, but my hiking boots cost $400. I will only stay at nice hotels due to a traumatic experience I had in my working years. You wouldn't look at me and think that guy is loaded. Money doesn't define who I am nor make me a better person. Best to all in reaching your goals. Most important is that I would give it all away to bring my daughter back. Kids are what makes you rich.
I looked at several definitions of “middle class” a few years ago. The one which seemed most sensible and easiest to understand was written by two men from the World Bank: if you can buy a moderately priced new car without a loan, you’re in the middle class. Edit: I just read the comment from Sam Iamdj. That reminded me of sth I’ve learned while earning poverty wages the past few years: financial wealth may be measured according to your (Erin) formula, but real wealth is measured in social connections. Who have you affected, and how? Who, if anyone, will really miss you when you’re gone? Who would help you if you suffered some sudden, unexpected disaster? It’s worth noting that farmers may have low accumulated financial wealth, but score highly in happiness surveys due to their social connections.
Hi Erin, Great content and presentation! Now that you have done one on income and one on net worth, the next step is to combine the two. I saw a chart a few years ago that someone with income of $100,000 and investable assets over $1,000,000 is in the top 2%. Once we get into the middle and upper classes, investable assets becomes a more informative metric, as it sets apart your primary residence which, while a part of your net worth, does not contribute income. Just my 2 cents. Appreciate your work!
Depends on age and stage of life. Married couple with 2 million In investable assets with, no liabilities and kids on their own certainly would be considered upper middle class, but may still not be free of financial anxieties. It’s really a state of mind. Upper class to me means that you could loose 75% of your assets without affecting your life style.
I found this a thought-provoking video. I'll have to say that my attitude toward money, wealth and life has changed over time. Back when I was young and broke, I thought about what physical things money could buy. Now I think about what experiences it can buy. As far as my definition of wealth, it is complicated, but bear with me on this. To me, being independently wealthy, means being able to afford your desired lifestyle with no additional income from work. Being wealthy means being on track to become independently wealthy while still supported your desired lifestyle. Being able to afford you desired lifestyle means prioritizing everything you've ever wanted. This would include essentials such as food and shelter. Desires like a nice vacation. Future oriented things like saving for retirement. And even seemingly impossible dreams like owning your own private jet. Then drawing a line at where your money runs out. If everything in your desired lifestyle is above the line, then you can afford your desired lifestyle. If not, then you can't and you've got some work to do. The lesson from this is that your wealth is based more on your desires than how you stack up compared to other people or some magic "wealthy" number.
Excellent content Erin, I'm 68 years old and became a millionaire by the time I was 40 years old, got married and had two children grew the net worth to 3 million, a retirement / 60 years of age gave 1/2 of it to the ex-wife. And have been able to live off of the capital gains for the last 8 years. So for the last eight years I've been traveling internationally and not working and living off of my capital gains and my net worth has stayed the same about 1.5 million. I have a question and it's about the complainers and whiners in America that believe that capitalism has failed and Americans can no longer "make it" I watch these type of videos and am stunned how many people believe that you can no longer build Networth because it just flat-out cost more to live than what you can make which I'm sure you and I both disagree with. Can you enlighten me why these people believe that capitalism and saving is impossible in the United States of America in this day and age?? Thank you in advance forgiving your answer
I will answer it for you, David. Capitalism is to be used. So many people never take advantage of it. They sit on the sidelines. Our society wants to kill it with socialism. Bravo for you! The key to retiring early is lowering your expenses. You have done a great job.
Key to building net worth is living below your means… you don’t have to spend your paycheck in its entirety…should invest 20% long term of your gross earnings..
Because a woman (girl?) who, until a couple of years ago, worked as a Barista (after getting an expensive degree at a private school), and hasn't managed to pay her student loans, got into Congress and suddenly became an expert on finance and economics! AOC- financial and economic genius!
Some aren't willing, though able, to live below their means. We are consumers, bred to waste & want & fomo is real for certain generations. The value of our time compared to the wage earned is not understood or taught.
To be fair, young people are coming up in a different financial environment now. College costs have been going up far faster than inflation for decades. At the same time, the education requirements for a even entry level jobs have been rising. Young people are starting their careers with massive college debt and companies are actually paying them less, when adjusted for inflation, than they paid the debt-free college grads thirty years ago. When people feel they can’t win in the current system they start looking for ways to break it. Both the election of AOC and Trump were propelled by this kind of thinking. There’s going to be a lot more of that happening if the number of financially insecure people continues to rise in this country. I agree with absolutely everything that has been said about debt and saving on this channel, but I fear we are looking at a tidal wave that’s going to break all of our nest eggs.
Been dollar averaging into Vanguard mutual funds for 20 yrs. 45 yrs old household with a net worth of $5mm including retirement savings. Took 10 yrs to reach 1st million $, then another 5 yrs to 2nd million $, then 3 more yrs to 3rd million $. Once u build up a large base, then it will grow exponentially... need good habit, consistency and determination...
My net worth is between 1 and 2 million and I estimate that I am in the top 8%. Don't ask me how I came to this conclusion. I'm just a good observer and a good saver.
That's a mighty big range for your estimated net worth. A bit like saying your net worth is between zero and one million. Having a million puts you in the top 10%. Good job.
@@kerrynight3271 That's because I don't know if I should include the appreciation of my house, which is $500,000. It is only on paper so I didn't want to include it in my net worth, then again, I could have. The same for my stocks, but I did fudge a little by including half of the paper profit in my net worth.
Great video, Erin! Glad I found this channel. I always thought (based on...basically nothing) of the upper class as those people who don't HAVE to work to sustain their lifestyles. Kind of like a landed gentry (upper class) vs. merchant (middle class) idea. I was really interested to learn these actual guideposts! You've definitely got a new viewer.
You're very welcome, Erin and THANK YOU for all of the amazing, down-to-Earth content. I've been telling lots of people about your channel and will continue to do so! Good stuff!
I agree with most of what you said. I work in a blue collar good paying job. My peers earn the same as me. However they are always short on money. They work overtime, and are always buying in my opinion things they don't need. They are wants. Wants are great but keep in mind there are always the newer and shinier thing coming out next year, If you really want it save for it and buy it then. (Funny how interests may change in that amount of time) Myself, at work everyone calls me cheap. In their eyes that is probably true. When I had my last daughter I took the full 12 weeks off to bond with my daughter. Most people asked how I could do it and the answer was simple. I planned for 10 months during the pregnancy so I could do so. If I need a car I will buy one, but not buying a $100k F150 instead I purchased a used Camry. It better suited my needs. I believe I will retire much more financially secure than my peers. It is through diligence and dedication. It is not sexy but it works and in the end I feel that my family and I will be rewarded.
Well said. Same here. People call me cheap at work. I got use to it and this doesn’t bother me a bit. I saved minimal of 20% of my paycheck. I don’t work overtime period. Weekend is my time off to spend with my family.
This video really helps to calm the nerves. I started in teaching so we don’t contribute to SS but a pension; however, at the age of 40 I left the public sector and joined the private world. Now I’m finally putting in to SS and 401k. I originally felt so behind the 8 ball since our focus was being debt free, but currently our household has a net worth of $150k. We can definitely reach more than $600k net worth by the time we retire in 25 years.
@@ErinTalksMoney No one really factors in pensions as a part of net worth. I think how could it not be? Just looking at it as a simple annuity mine would be worth approximately 1.3M in order to pay out my yearly benefit. Yes pensions are wonderful. What are your thoughts on pensions/net worth? My wife and I live beneath our means, have no debt, save regularly and invest. I'm 59 and retired less than 4 years ago she(58) hasn't really worked in 30 years. Our net worth is 1.6M not including that above mentioned pension. Do I feel wealthy? No, I do feel comfortable.
This topic is actually pretty deep when you get into it. What difference does it make what someone’s “class” is? As you mentioned, decisions about how much to spend and how much thought must go into those decisions tell you the most about someone’s financial position. If I have a net worth of $1 million today at age 55 but it is only accessible if I sell properties that I live in or break into a retirement account and my annual income is modest, I am not upper class from a practical standpoint. To me upper middle class means you can stop working for a year or two, still be on track to retirement. Poverty and lower class on the other hand to me mean that you buy only what you need to get by physically and you hope that you never ever need to go to the doctor.
That is solid advice. I would add the sooner you start saving, the sooner you can retire. The small amounts of money I dumped into retirement funds in my twenties are now a lot of money in my fifties.
I like your smile, as always, and your new hair style. Thank you for using medians instead of averages in this video. It's shocking how low these medians are. Americans need to get way better at financial health. Thank you for inspiring us toward that. I was at negative net worth at age 43 and now at age 59 am at more than twice the "wealthy class" median. But by my lifestyle you'd think I was in the lower class. I guess that's how I got "wealthy", by continuing to live poor after my income went "upper".
Frugal habits go a long way, congrats on your financial success! 👏👏 (I actually really like seeing the averages …I know they are skewed, but I still like the bigger numbers, I think it helps push to strive for bigger goals. But I know most people prefer the median) 😊
@@ErinTalksMoney Good point about medians not being good targets. They are horrible targets. Maybe medians and averages should be important measures of the same story about what is actual relative to what is possible.
I'm older than you, but have a similar financial situation. No one would look at me and my little house and think I had a net worth of more than a million. I give away a lot of money, but my net worth increases every month. Congratulations for your success.
Another interesting fact is that most of the people who retire with a net worth of around $250,000 have most of it in the equity in their home. If you took away the home equity, these folks would have a net worth of around $45,000. While it's great to own your home, unless you plan to sell it or do a reverse mortgage, you need to have money to live on when you're no longer working.
And many people in higher age brackets sell their home and live in an apartment. That's what my parents did. Now, they are renting a duplex and have lots of money to do what they want.
I'm glad the UA-cam algorithm pointed me you your channel! I have subscribed and will spent the next few minutes (hours) watching more of your videos. You have a very good presentation that makes it enjoyable to watch. I wish you nothing but the best for you.
Love this stuff Erin, You really need to be a financial adviser, the simple way you explain things is far better than the adviser I have. But I'm sure you are doing what you want. Keep rocking it girl.
Hey Philip! Thanks!! I always think the best way to explain things is in the simplest manner. I really hate when explanations are complex and convoluted - that doesn't help anyone. Keep it simple!!
One of my late uncles once said something in conversation that became my permanent measure of financial security/wealth. In response to someone else's comment he said, "The only question is how much money do you make before you even step out your front door?" To me, this question is a critical overlay to all the charts, graphs, etc. various financial gurus have used to try to describe wealth and wealth classes. It matters less what your paper net worth calculations produce or how much money you make. The point I took from his observation was this. The degree to which the person/family has sole or substantial control over the income sources that power their lifestyles is the difference-maker in any discussion of wealth & class. I can have a million dollar net worth, but if my lifestyle is powered by a six-figure income that can be virtually cut off in one fell swoop, I am not weathly. And if the elimination of that same source would result in a major drop in my or my family's lifestyle choices I AM NOT securely upper class. Until I secure that income source or some equivalent apart from any employer, I am merely a renter of an affluent lifestyle.
Hey JJ! Thanks! Fun fact - I had to curl my hair because I did a terrible job of cutting it and was uneven 😂 (I did it really quick one morning) The curls made it so you can't see the uneven-ness. I evened it out on Sunday so I can wear it straight again! 😊
After years of bad decisions, my financial life came apart in 2008 after loosing my high paying job. Needless to say, after a bankruptcy and a foreclosure, I look at money and spending a lot differently. I slowly rebuilt my credit by paying my bills on time. It took years. Now I have excellent credit. I buy what need with cash. My car is 8 years old. I plan on driving it another 2 to 4 years. I bought a house i can afford. Based on your chart, I'm in the upper middle class. Blessed.
Weird I'm a little shy of upper class. But I'm a carpenter averaging around 50 grand a year. I guess that's the power of living frugal. Thanks for the video.
Another great video! I find even though I am more than comfortable now, I still check prices - even at the supermarket. I don’t like being ripped off - even if it wouldn’t really make a difference to my checking account 😜. Happy to buy the organic free range eggs for the little chickies being better treated. But I will buy the big bag of carrots and chop/freeze what I don’t need right away because it is better value 🤷♀️ Watch the Pennie’s and keep the dollars growing 😊
I feel the same @Fiona MacDonald. I support the Happy Eggs brand but want the bulk carrots. I wear clothes until they are no longer good and I enjoy finding second hand clothes with ample life left in them. I tend to wear shoes until the tread is worn. I splurge on quality when I want to but refrain from spending on certain things. Saving money provides choice and I really enjoy having choices.
I agree with Steve who commented, "Net worth is heavily dependent on age, so maybe a breakdown for age brackets would be useful." Hoping you will delve into that topic.
All the possessions in your home such as furniture, paintings, jewelry, clothing, computers, TV, etc. are part of your net worth too if you own them outright, i.e. didn't buy on credit that hasn't been paid off. In an average family that is not a small amount -- I would say at least $10k-20k. But these net worth surveys (such as SCF that you quoted from in your video) almost never include them. They often only include the usual items such as cars, homes, liquid assets, etc.
Those kind of personal items are what I consider fluff. They are depreciating assets and lose their value daily. Collectable items could be counted but not TV's and furniture and clothing. You would have to sell them for pennies on the dollar. I don't even like to consider my personal home in my net worth. If you sell your home to have the cash you still have to live somewhere and would either have to rent or buy another house. Financial institutions and accounting practices allow this kind of fluff, but I personally think it inflates the real net worth of an individual. Just my two cents of net worth opinion.
@@davidstephens6458 But we buy new things periodically, while old things depreciate as you say. So I think there is a roughly stable amount of net worth for such possessions throughout our lives. Also, I think we should try to do an appraisal of our things If your hard drive containing old family photos is broken, how much are you willing to pay to recover the photos? That's the cost (and net worth) right there.
@@rabidfollower Your things aren't worth anywhere close to what you think they are. Even most jewelry. For most when calculating networth the only depreciating asset I would include is maybe your car.
(perspective of someone living in the bay area in California) lower is struggling and being concerned about money to live. middle is owning your own home and living without financial concern to speak of. upper 1 is having enough money that you have to spend time figuring out what the right thing to do with it is. upper 2 is being able to buy or give whatever you want, and fund other projects as well. based on current income (in this area), it's lower, 400k, and assets of > 5m and upper 2, (income doesn't matter, net assets >200m - imv :)
I've had some hard bumps in life. I have about 20 grand in my savings. My car is payed off. But I only bring home 500 weekly. I consider myself in the "poverty" class. Finally starting to get somewhere though. Life has not been fair to many of us.
Hang in there. You'll be okay. Where there's a will, there's a way. And you sound like you have the will to succeed. You know it won't be easy, but you have the guts to get this done. Wish you all the best.
20k savings...500/week take home? That's outstanding 👏 you may have had bumps, but you seem to have taken them well! Good job! Guys I work with, bring home 1000+/week with 3k savings. Keep doing what you're doing! 👍👍👍
Don’t lose hope. My 2 cents. Right now you are feeling the pain of making blood money. Money created from the blood, sweat and tears of your hard work. Once you get some breathing room don’t spend your blood money on a reward. Turn that blood money into a spring of wealth. Make or find a way for the blood money to make money on its own, spring money. Only use this spring money for rewards so that you won’t have to ever go through blood money again.
Erin, I see a lot of comments saying they have high net worth but don't feel wealthy. That is why 90% of people say they are middle class, as you say at 4:39. Many upper-class people think they are worse off (while also some poor people feel they are better off). But this has nothing to do with "feeling" rich or not. It's all about the percentile you are in. If you are in the upper 20%, you're in it, and that's a mathematical fact you can't argue. If you feel you don't have high buying power in the upper 20%, that has to do with the economy, not your wealth.
Exactly! Feeling wealthy is a personal feeling - has nothing to do with how the US government statistically divides things. And I would probably say that most people don't feel wealthy because of lifestyle creep and because they compare themselves to others who seems to have more.
Wow. This is an extremely interesting video. My wife and I are in our late 40s and are over that $1MM mark in retirement savings alone. I always thought we were broke. We live in a pretty modest house, but our kids are in private school so it has a financial impact to us. We have older cars and so do our kids. I guess we’ve earned more and saved more than I thought. I’m rich? I guess I should buy an Armani suit and stop shopping at Costco and JosABank for my clothing. I should also hug my parents for convincing me to stop being an idiot and finish college.
@@ErinTalksMoney ha! You’re exactly right. I guess it’s just the example I’ve had. My grandparents accumulated a multi-million nest egg as have my parents, and neither had a college degree or a really high paying job. They just never spent money. I guess we’re doing likewise. Thanks for the great video!!
How does it feel to know that the $1m you have lost 20% of it value just this year and will lose another 20% next year? What value does $1m have in hyperinflation?
@@fullclipaudio Yes there is inflation but I can tell you that having money in the bank feels a LOT better than not having extra money. There are plenty of things we cannot control. The stock market will crash. Oil prices will increase. The cost of electricity and natural gas will go up. Food costs will rise. We will have to adjust our way of living. The world is in for some challenging years ahead. I hope people are prepared. Cheers.
I retired at 54. My house is paid for and has doubled in value in 6 years (San Diego). My stocks have almost doubled after hiring a Financial advisor that manages those stocks, which doubled in 6 years. I still drive a older car, Dye my own hair, shop at Walmart and cook my own meals. I never shop at high end stores. I still live & feel middle class, if that. I live off my modest CalPers pension & have lifetime medical coverage, a big perk offered back in the day.
Not sure if I buy these metrics/brackets. I just retired at 55 and apparently I'm upper class. It doesn't seem like it. Glad I started saving in my early 20s. Blew my share in my 20s to mid 30s. Tapered back after that. Never made more than 65k. Got my toys, but didn't get into buying car after car. Not my style to try and impress others with vehicles. Buy quality, not often. Maintain my own cars and motorcycles. Make my own meals. Frugal not cheap. It can be done. Don't carry debt other than mortgage or 2/3 car value if you must.
I've married two times. The in laws couldn't have been any different. First one owned a small town gas station and invested in real estate & stock market and passed in the house he built. Other was a PHD Phycologist lived in a really nice home and appearances matter. I always thought it was interesting that when the first marriage ended he was worth around 5M, more than twice the second in laws. At the second marriage a friend told me "blue bloods and blue collars".
If you have owned a home for an extended period of time in one of the several high priced markets you are probably in the upper 20% just by virtue of your homes equity.
I need some guidance please. Lately I've been considering buying dividends stocks for retirement, I have set asides $400k but somewhere along the line, I get cold feet maybe because I'm a rookie and have no idea what I'm doing.
My portfolio grew by 100% within 6 months. Couldn’t have put it better myself. Last year a colleague introduced me to a financial consultant Rosemary Carlson who has been helping me find investments that have significant growth potential. She invested my money in reputable companies which their stocks must always rise after any dip.
@@berwickperu7683 How are you investing? I have around $145k, only index funds, half in s&p and half in vigax, i need something more aggressive to grow my portfolio, What do you think I should try?
@@stricklandpilman2123 I would advice you to reach out to Rosemary Carlson. Through her you can get strategies designed to address your unique long-term goals and financial dreams. So, you can check her out online and subsequently contact her from there.
@@berwickperu7683 Just researched her accreditation online and qualifications on FINRA and SEC, she seems really solid and i have sent her a mail already hopefully she replies soon enough.
One of the easiest ways to determine if you are doing well is take your annual expenses in retirement and X by 25. Example $36k annual expenses X25 = $900k. You can then back out social security and any pensions to get the $ amount you need saved. If you have this saved you will be fine in retirement. Dollar amount means very little, need to know your expenses.
This only works if you retire now or soon. If you retire in, say, 30 years, then you need to adjust the figures for inflation. In 30 years, your $36k expense will be doubled because of inflation, and you'll need $1.8m to retire, not $900k.
Great content in your channel, Erin! I’m 53 and my wife and I reached $1M net worth in 2017, five years later it’s $2.4M. Our yearly salary is a little over $100K. We drive older cars, cook at home, eat leftovers, and have 2 in college. We saved for college and our boys help by working. They will graduate debt free.
My demographics are similar to yours, and my wife and I also live a very modest lifestyle. I would love to know how you grew your net worth so much over the past five years. I'm guessing real estate investments.
@@zzanatos2001 Glad to hear, Zach! My N.W. grew through a combination of saving, 401(K) and Roth investment growth, and home equity. We have no other real estate.
Right there with you. I'm retiring early, no debt. Kids are taken care of.
Building my dream home on 11 acres, looking over the river valley.
Much of your story mimics my wife and I except we are a decade older. Sincerely, good for you. My wife and I were both self employed for most of our adult lives (rental property, me-CPA, her). In dealing on a personal basis with literally thousands of individuals and couples over 40+ years "lifestyle spending- carelessness" is the number one mistake amongst all income earning groups. My wife had a surgeon client making almost one million a year declare bankruptcy when his emergency room nurse wife stopped working to care for their new born child. New Mercedes always for both, etc., etc., etc.,. I love to hear stories like both of yours, what a stress reducer!!!!!!
AWESOME! Congratulations!🎉🍾
“When you look to buy something do you need to look at the price tag?” Yes, that’s how I got into this category, and if I stop looking at the price tag then I will probably fall back out of it.
Indeed, you don't accumulate wealth by being frivolous with your spending.
yeah well said. We have over 1mil net worth and eat home and buy used late l model cars and compare price everything we buy. We have no cable only rabbit ears and are fine with that.
Yes!!! That’s the only point I didn’t agree with at all. I would say most upper middle class people don’t think like that
I no longer look at price tags. I know instinctively if I can afford it or if it is worth its price. Really, today the only big purchases are for ‘assets’ I believe will grow in value over time or at least not lose value. The smaller costing things in life are of no consequence. For example, I don’t look at the price of gas, I figure I have to buy it anyway. Like food. I just stick with the middle grade of gas and have been doing that for more years than I remember.
NET WORTH
2:34 Poverty Class = $6030
4:27 Lower Middle Class = $43,760
6:26 Middle Class = $104,700
7:47 Upper Middle Class = $201,800
9:19 Upper Class = $608,900
Is this based on individual income? Or household income?
@@crappiehookking387 neither. It’s based off Assets - liabilities. And i believe it’s household
@@Hakasuma Thanks man! That helps me understand better.
Nah I don't think so.
Th AJ you, we’re all set
Net worth appx 1.2 million. Never earned more than $65k a year.
It's called saving.
@Dirty Lettuce Less than half. No mortgages. Owned outright.
It's funny I stumbled across this video. I was just telling a friend the other day most people are doing well to reach a net worth of zero. He looked at me like I was nuts until I explained that means no debt. No credit card balances or mortgage. I'm a janitor with a net worth of 7,000. That might be just a smidge more than poverty level, but I'm actually doing better than some of my friends who make a lot more, but have tons of debt. I'm free to grow my wealth. They can't even begin to do that until the debt is gone.
I couldn't agree more. In my late forties I had a middle class job and a net worth of about $60K in the hole. The stress... the debt collectors... it was horrible. But as soon as I committed to cutting my expenses to the minimum and attacking my debt one at a time it got better. I tracked everything on a spreadsheet and stuck to it. It took 5 years, but when I became debt free it was an incredible feeling. Once the debt was gone I took that same discipline to start accumulating wealth. Now, 15 years after eliminating my debt, I've retired (age 59) as a multi-millionaire, and I'm just a year from heading around the world in my sailboat. One smart/lucky move I made was investing a big chunk of my savings in Tesla, which paid off big. But even if I had played it safe I could have retired comfortably. But just to reiterate... debt is enemy number 1.
No mortgage means you add in the value of your home to the asset side of the balance sheet. Owning a home free and clear with no other debts puts net someone well into a positive net worth.
Great Video ! I always got depressed because my income rarely went over 50k ......but my net worth of 650k gives me a more optimistic approach to retirement
It's always important to understand that income doesn't always equal wealth. A friend of mine is a lawyer who makes over $140,000 a year, but he and his family live month to month. How you live and where you live is vastly more important than outright income.
You've made it! Your income of 50k - after taxes, social security, and savings contributions probably left you with high thirties. 650k in assets @ 4% would come to 26k per year spendable income (plus some asset growth). Add a (smallish) 14k per year in social security, that brings you to 40k (before tax), that's probably 35k or such, but you also won't have less health insurance costs (3k per year?) with Medicaid. If you are not retiring tomorrow but a bit later, you'll likely be better of (financially) in retirement than during your working years. You accumulated assets worth 13x your annual income! Well done.
That’s outstanding! Congratulations 🎉🍾🎈
@@chris_sc AND since the ACA is based upon income, not wealth, they may qualify for subsidized healthcare when they retire.
Im getting there myself at 31 I build my house with my own hands on 5 acres. The 5 acres cost me 30k and is the only debt I have. The house is done a year later and the estimated value of the property has jumped to 150k. I only make 50k a year working two jobs so I was surprised to see I am not that broke.
Interesting video, I’m 69 single, never married, no kids… had a decent job… have net worth a little over 2 Million…with pension and good social security…feel so blessed…
Congrats! 👏👏
Smart man! If you get marry! Prenup!
Every High School student should be required to watch this video at least 1X each school year. Then, another 10 hours of class time should be devoted to research, discussion, and better understanding these concepts.
yup ...
My husband and I are 33 and 35. I’m a couple weeks from delivering our 2nd baby. I’m a SAHM and he’s an NCO in the military. Our net worth (based on my quick calculations) is right around $105,000. We’re not wealthy, but we have ZERO debt. We stick to a monthly budget, make healthy retirement contributions and other investment contributions. Despite the craziness of the financial market, I feel secure with our future because we plan ahead and make the best decisions we can.
You and your husband are the backbone of this nation
@@oscarrlee18 that’s very kind, thank you
Always smart to plan ahead. I'm glad there are still people who think like this. Get debt out of the way because no matter how good your networth is it'll always get dragged down by debt.
@@dreel37 the best investment is paid for real estate.
@@oliverheaviside2539 Definitely. That's what I plan on investing on once my credit is in a good position and once house prices drop. What I'd recommend would be for you to get a loan for a house, rent it, let the house pay itself, and once you pay it off you can either keep renting it, or sell it by payments with interest which will make the buyer pay more money than the house is worth by the end of the contract deadline.
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life
When I saw testimonies all over the place I thought it was all made up stories till I saw my next door neighbor sharing her testimony I was convinced and said let me try hima out. I don't regret the move I made because I invested my money with the right person
Chris is not the kind of person that will tell you with just $500 you can made $45,000. He tells you all you need to know and how he can help you with the little you have
Sometimes this videos don't really help much as they end up confusing you more. When I came across Darrell the confusion ended try
Net worth is heavily dependent on age, so maybe a breakdown for age brackets would be useful. $100K is a lot for an 18 year old, but too little for a 60 yr old...
I agree, a big difference is if you have your home paid off or not...
How is it too little for a Sixty year old??? At 60 you shouldn't have a house payment or a car payment. I retired at 60 all my stuff paid for, with $160,000 in savings. Between Social Security and one of my retirement plans I have about $2,800 bucks a month coming in. Depends on how good you are with your money.
@@timnewman1172 paying off your home doesn’t really affect your net…
@@steveweixel6709 , how does it not? It should be a definite decrease in the debt to asset ratio...
@@timnewman1172 if you have a $1M house and still owe $100K, but you have $200K in the bank, then your net is $1.1M. If you take $100K from savings and pay off the house tomorrow, you still have a net of $1.1M,
Net isn’t a ratio, it’s assets - liabilities. Shifting from one pile to another doesn’t affect the net.
Long ago I adopted a herd mentality approach to net worth. I examined the top 10% to determine all of the common characteristics, to see what I could replicate. Here's what most of them share, business ownership, investment real estate, stock or mutual fund investing, and higher than average income (which was a byproduct of the other 3). Intentionally accumulating those income producing assets propels net worth far more than a 35 year career employee can save. After 25 years, those assets began to provide more income than I could've ever earned as a career employee, in upper management.
and 4) their parents were probably rich or had an above average net worth
@@JasonG123 "and 4) their parents were probably rich or had an above average net worth" Maybe or maybe not. My family was lower income. Only one parent graduated high school. I was a first gen college grad. After college, I got a job and I also tried several different side gigs, and one grew into a legit business, which ultimately replaced my day job. Total cost to start that business was $7,700. In my opinion, business ownership can be the quickest path to grow net worth.
@@JasonG123 Nope. ua-cam.com/video/guRGhiTElSo/v-deo.html
@@DaveM-FFB congrats, I am in the exact same boat as you were. First gen college grad, grew up single parent in bad part of town, working on side gigs now as I work my regular fulltime and hoping that something takes off. I agree that branching away from the status quo is the fastest way to break out of the cycle.
@@gipnor sorry, his podcast is for entertainment purposes and yes, he's rich, but just because he's rich doesn't mean he's right or using correct data. Also, he has an agenda to make money off of you, so of course he's selling you what he wants you to believe. Real life is different
It also depends on which geographical region in USA. Here in California, $600K net worth is at best middle class but could well be upper class, for say, in Alabama.
8:53 would have been true if we are in the 60s. I'm a "multimillionaire" and I still shop on store coupons and often beat myself to death whenever I for not getting a bargain. Just because I can afford it doesn't mean I want to pay for it. A million dollar is not something to write home about these day.
I totally hear you! A million definitely isn't what it used to be! Of course it depends on where you live, number of people in your family, etc.
If you're single, it's a lot of money. If it's to raise a family, it's not enough ):
If you live in California or New York - you are close to needing food stamps at one million.
@@marcsherman4862 lol, so true. A millionaire in those places is barely richer than the guy who live under a bridge.
@@marcsherman4862
NYC and Cal let people with a Net-worth of 1 million go on food stamps???
Our feelings of security have increased as we've worked our way up, but my husband and I still retain many of the frugal habits we practiced during our aggressive saving years.
As a single 24 yr old I can agree that financial habits are the biggest factor for how fast one can accumulate wealth. I myself am currently at a 80k net worth after working for two years and paying off my student loans. My income is not that high 70-80k but I have been saving consistently from day 1. Some of my older married relatives don’t have a net worth/savings greater than mine and that is because they like buying cars (leasing one every few years), going on vacations and just generally spending more. I heard someone call this lifestyle inflation and honestly I believe this is what holds most Americans back.
I'm with ya on that Angel! I am also a single 24 yr old and I have a $140k net worth. I have 5 years of working with an avg income over those years probably around $40k-$45k. I wouldn't say I was saving from day one, but I did pay down my debt as fast as I could and I do not spend much. I didn't do anything special, and I even set myself back a solid $15k by going to college. The only lucky opportunity I've had is family rent between $300-360 a month throughout the years. Good habits and an "I care" attitude make all of the difference. Building wealth is easy and fun.
Nice! I have been working one year and have a net worth of around 40k, trying to save up for a house
Thank you and other UA-camrs who are trying to turn the tide on American's as horrible savers. My husband and I are 56 and our net worth is north of 3M and we supported our daughter through college and helped her buy her first home. All by saving when we first started working in the '20s, nothing fancy, no new cars, a nice house but did all repairs ourselves, no extra stuff and we live a great life. In our late 20s and early 30s, many of our friends would buy expensive stuff (boats, Sea-doos, label brand items) but we did not. We splurge on memories, Europe, Grand Cayman, Australia, Cruises, we travel, that's our fun. Who cares if my shoes do not name brand, I have the financial freedom to do what I want for the next 30 years debt-free.
Great Video Erin! I look more at our Net Worth and I teach people here on UA-cam to do the same! Knowing what you own and how much of it that you own is VERY important! It's the same with debt! Our Net Worth crossed $1 Million last August and it was because we had the money working in stocks, real estate and crypto. We started low income and through education, networking and hard work..have been able to make more and have that grow on the back end for us! Like you said..it's all about money management! Again..LOVE your videos Erin!! Keep the content coming sis! ❤️
Congrats on passing $1M, that's awesome!!! 👏👏👏 Thanks for watching!!
Don’t check your stocks or crypto today!! 🤫
My neighbor across the street would have at least 40 times a year of all sorts of services to their home, such as tree pruning, plumbing, drywall repair, electric, pest control, food delivery, and dry cleaning and delivery etc. I have been wondering how much he spends on those kind of things a year because I do all those work myself.
@Homo Sapiens. Truth. I do a lot of repairs around the house myself and I know it has saved me lots of money. Most of it you can learn from the internet these days. The lady across the street, who is younger than me, is paying a fortune for people to do work for her. And then she complains that she is upside down on her mortgage. Stop having restaurant food delivered and do some yard work yourself. LOL. It's not difficult.
I'm retired. I owned and operated an apartment building for many years, saved a ton of money doing some jobs myself. I recently found my log book and counted 47 hot water tanks that I replaced by myself in that building over the years. I always had 3-4 new ones on hand in the maintenance shop. Many of them started leaking on Sunday for some reason. Try getting a plumber on Sunday. My goal was to have hot water tanks replaced within 8 hours of receiving a call. I put drain pans under them all along with earthquake straps. The pans drained though pvc tubing outside the building near the air intake grill. Sometimes when I was walking by and saw water dripping, I knew what was in store for me in the next day or two. I sold that building a few years ago and never looked back.
I'm almost 70. I just changed my own garbage disposer 3 days ago, boom boom, over and done, no hassles, no cost. I had 8 brand new Badger 5's in boxes that I kept after selling the other building. That batch should last a lifetime.
The earlier we start saving, the wealthier we become. Compound interest is real, but patience is necessary. A simple 401k can do wonders...
please do a breakdown on net worth between the upper 10%, 1% and 0.1%
I'll do some research 🤓
@@kimpritchard4322 Because most Americans are that broke/poor.
Hi Erin....very well done. I've been working in Finance for 28 years and I know most of what you are talking about. However, I rarely see anyone who can present it as well as you. You keep it interesting and it is easily understood be people with less knowledge. Thanks for all you do.
Wow! 🤯 Thank you so much! 🙏
In the past racists in Europe to Naz i Germany organized progroms to attack those that lent them money in order to avoid paying them (typically against the Je ws)
Today we see the same racist mentality happening again but this time, the narrative of dehumanization is directed against the Chinese
It is shameful to think that we humans are no better than 80 years ago despite swearing to never repeat the mistakes of the Na zis
Love this video! I FIRED at 38, my husband loves his work, so he keeps working. I got so excited when you mentioned FIRE. We stared seriously saving and investing about 10 years ago. We had rather unimpressive salaries (between $18K and $90K) over our 15-year work history and that was enough to allow both of us to FIRE before the age of 40, if we wanted to. Granted, we don't have kids, so that helps. Your breakdown of the income brackets reminded me of what my research method's professor said during the 1st year of my PhD program when he commented that everyone answers on surveys that they are middle class. Your breakdown also made me realize we are at the top of the wealthy class. And there is nothing special about us. You are exactly right. Barring major discrimination or disability related issues, almost anyone can join the middle class.
Wife and I have a net worth of $1.6 million. No mortgage (house), no credit debt, both vehicles paid cash. Truck is 6 months old, our SUV is 2 yrs old. We don’t see ourselves in a class. Both educated and well paying jobs. No keeping up with Mr and Mrs Jones. Solid retirement plan. Enjoyed the video.👍
Erin, Another great pod cast. I would be interested in a view of the average net liabilities both by age and among the 5 classes of American families. For me my net-worth number is influenced a great deal because I fully own my house…but that value is not really liquid. So my living style is more effected by income like pensions, social security, and investment income. Owning a home that has no mortgage and having no other debt upon retiring is the biggest factor for me to a very comfortable retirement.
I don’t bother including the value of my house in my net worth because I don’t plan to sell or encumber it. Adding the equity of my unencumbered house to my net worth would likely warp my assessment of my net worth.
Interesting - I'm not sure what data is available, I'll do.some digging. I agree with you - I love the idea of having a paid of home in retirement!
There is some data about high net worth individuals which is apparently 1 million outside of home equity and retirement. The home value should definitely be included in your net worth. It’s “return” is the rent you don’t have to pay
I was wondering the same thing. If home equity is part of net worth a lot of people who live modestly on median incomes are considered part of the wealthy class. With the crazy appreciation of home values the last couple years it isn't all that hard for someone earning under $100K a year to have over $600K in home equity. My house went up over $300K in value just last year. As you state it's not very liquid unless you borrow against it or sell.
The big issue is property taxes which are based on appraisals. People are being taxed on unrealized capital gains. We're retired and seriously thinking of selling our home to get out from under the brutal property taxes we've had the last couple of years.
@@TimRileyGPlus A home's not really an asset unless it makes money for you. If you live in the house, then it's not really making you money. It has annual maintenance costs, utility costs, property taxes, and insurance costs. Those costs are real and subtract from your net worth every year, unlike home appreciation, which is only a number on a piece of paper that only becomes real after you sell the house or do a reverse mortgage.
Most people think home ownership is great, but people really need to look at this with both eyes open. If you financed your home, you probably paid at least twice what it cost to the mortgage company. You've had to pay insurance in case the home gets damaged or if someone is inured on your property. You've had to make major repairs like replacing the roof, plumbing, electrical, evac and structural problems. You have to pay for electricity, water, heating, and waste disposal. And then there's property taxes, which is a story all to itself. When you add all that up over 30 yrs, is the home really something that adds to your net worth? This is why I don't include it in my net worth calculations.
10 years ago I was under 20k net worth. Today I'm squeaking into the upper middle class. Its all priorities, habits, small changes sustained over time. Give me another 6-8 years i could very well be in the wealthy category. This blows my mind. My advice is to write your goals down twice a year. It has a profound effect written down. Great video. 🙂
Congrats 👏👏 I love that tip!
Those are the keys to success! Slow, purposeful, aware. Simple steps to grow your life.
This makes me feel much better about my finances! I don’t bring home as much money as I would like. The last video you did regarding this topic with annual salary put me squarely in the middle class but my net worth puts me in the wealthy class. I never really looked at my net worth as putting me in a wealthy class. I was guessing I was doing better than average, maybe upper middle class.
I'm glad to hear that Mike! Congrats on your financial success thus far and thanks for watching! 👏 😊
Thanks, Erin. I am very surprised of the net worth in the upper two categories. I know it’s extremely hard for those with low incomes to save, and as you said in the video some lower income earners save a lot. I would have expected those with much more disposable income would save more. I guess it shows how varied values are among people.
Hey Robert! I'm always surprised how low the figures are at the upper end so these lists! Sometimes it. seems like wealth is very prominent - but then you see these numbers and it just doesn't seem to add up.
I think the stats are very deceiving as in general higher net worth individuals live in higher cost of living locations. You may earn $250k a year in So Cal, but your cost of living is triple of that in Nashville TN. In addition your taxation rate as well as breaks on tuition assistance and so on are limited. Thus, your ability to save each year is limited. Since 2020 there has been a massive rebalancing of income / location due to Covid and legitimate remote careers. People finally figured out... you can do a lot of jobs run a number of businesses remotely.
Really interesting content! Maybe you could do a video about what size nest egg you need for different levels of retirement income. Rather than comparing ourselves to each other, we can compare ourselves to who we want to be.
Love that!
@@ErinTalksMoney how many likes do you need to make this video?
Great attempt to educate people. Albert Einstein once commented that the most powerful equation in the world was not the famous E=MC^2 but the simple compound interest formula FV = PV * (1+i)^n where:
FV = Future Value
PV = Present Value
I = interest rate or earnings yield
n = number of compound periods.
This simple formula is the power behind converting small sums over many compound periods to grow net wealth. I learned this as a Sr Chem E student because it's also the basis for discounted cash flow (DCF) and drives all capital allocation in the global economy.
I just stumbled on your channel and appreciate the sound information you provide. Now in retirement, one area most financial advisors don’t talk about is health. Maintaining health throughout life can be another way to accumulate wealth and save. Perhaps a video that discusses health “net worth”.
Good health…the greatest wealth of all.
Wow Erin. 40 percent of people making over 100K and living check to check! I don’t feel so bad now. Anyways congrats on the 100K views on that recent video! You deserve it. You are sweet, humble, and a natural for this!
Thanks so much Tim!! I found that stat surprising as well!
Great video. Loved your thoughts Erin. I am in a high cost of living area on the coast in Ventura County California. Your thoughts on making over $100,000 and not having any money saved are spot on. My wife and I have a household income of close to $200,000 and yet after taxes and living expenses their isn't much left. We do fund our 403B accounts at work and those have grown significantly over the years. We own our home as well, although I am of the mindset that we need to live somewhere so I don't include our home as part of our net worth. Some may disagree with that. I see a home as something that cost me money to live in and not as an asset. If I were to sell the home then it would become an asset although I would need to then purchase another home. That being said I am told that we have close to $500,000 in equity on our 60 year old home. LOL
Used to live in that same City, it has always been high relative to income. If you have family commitments stay. Otherwise you know your answer. Hard to leave those sunsets.
+
@@selrahc2061Sorry for the late reply. I seem to neglect responding in a timely manner. Yes family commitments do keep us in place. Daughter is still in high school and two other kids in college locally. At this point staying is the priority for us.
Awesome video! 🙌 At 53, my wife and I have a current net worth of $1.2M. According to your scale, we’re in the top 20%. Believe me Erin, we live close to the Bay Area, and we certainly don’t feel wealthy.
Anyone can earn a dollar, not everyone can save it. This is the difference between rich and poor. I came to the USA (legally) with a plan, many years ago with nothing but a suit case. I got educated while working multiple jobs which got better as my education made me more marketable. Today I would say I fit in top 10%. Decide what you want to do for living, as doing something you hate regardless of pay will make you unhappy. Save your money and don't waste it keeping up with Jones'. They live off of credit card... Lastly, life should not be all about the money. Some of the richest people are very miserable. True wealth is deep inside you, not at the bank. But the money does help...no doubt.
Don't forget the regional impact on class. 100k in New York and you're almost impoverished. 100k in rural areas, or many small to medium sized towns, and you're upper middle class.
200k in bergen County is 100k Bonners ferry Idaho. In NJ After federal , state, property , ss, open space tax , etc net is 48 cent on the dollar . No wonder so many have moved to Pennsylvania, Florida etc.
Erin is fun to watch simply because she does the research. I have my daughters watch her channel when a lesson needs to driven home. That said, at 8:56 she says that the upper middle class probably does not look at a price tag when purchasing something. As a retired blue collar household with a net worth well north of 2M I always look at the price tag. in our case we could not have a comfortable retirement without paying attention to where the money goes. Although the hardest thing I needed to learn when I retired early was learn to spend the money we saved.
In order to accumulate any kind of net worth you need to be conservative and price conscious for your working life. The fact that you retire and have a certain level of security, does not change your financial habits of 40 years. I thought the same thing we she mentioned price tags.
Looking at price tags is what made you wealthy.
Erin - your comments regarding knowing how to handle money wisely as being more important than the amount of income one makes rings true in my observations of many people over 40 years of working. My wife and I loathed debt. We built our house with our own hands and finished it in our early 30s and never had a mortgage. That allowed a massive savings rate as most of our paychecks went into retirement savings and other investments over the next ~25 years. We were early versions of what are now called supersavers. It allowed us to retire at 54 /56 and worked out better then we ever imagined.
We drove economy cars for a decade. We lived well and traveled some, just not some place exotic routinely. If we went to Europe, we'd find bargain trips in off season - for example we had a week in Italy for about $1000 total a few years ago. We go to Maui, but when there we catch the weekly ads and coupon shop and can keep the costs similar to when home, so it is mostly lodging and flights. We love to snorkel and have our own equipment so that is a free activity when there. Paradise on a beer budget, sunset looks the same ;)
Several years ago I was joking with another retired supersaver friend and referred to him via the old adage that he was so "thrifty" that he probably had every dime he ever made. That got us thinking and we realized that in some ways it was possible to achieve.
We started the "every dime club" where the goal is to have your net worth (not including the house) be at least as much as the total lifetime earnings reported in your individualized online Social Security account. Obviously you can't just save to get there, you need to have invested well and let compound interest do the heavy lifting. But we decided it was possible to achieve.
My wife and I each crossed that mark and joined the club in our early 60s. We had good jobs, not even doctor money let alone anywhere near that of the 1%, but our lifestyle of living below our means eventually get our net worth there. Everything I read about compound interest back in my 20s has been true and it is an amazing thing that I wish more young people would learn about and take advantage of. We trained out kids, and I try to share it with young people when the chance arises. It can set you free and get you into that "every dime club."
Erin, I’m really impressed! It wasn’t long ago in one of your videos you were telling us that you had 100,000 views on all your videos and now just one has achieved that! Congratulations ! I watched your other video and wasn’t surprised to find myself in the middleclass as an income earner but was really surprised to find myself in the wealthy category in net worth. I don’t feel wealthy but I feel very fortunate. I’m near retirement and I can’t say I feel ready to retire . It is an uneasy feeling but I have to trust that as we go Into a more fixed income that all will work out. Thanks for what you are doing and I think the numbers are showing that many want to hear the message that you have.
My husband and I are retired, our house and cars are paid off, the oldest car is 5 years old. We've saved, have a home that's probably bigger than we need, but it's paid off, so, who cares. Here's the thing, we can live on our SSI and put away 1k per month, we don't touch our savings. The 1k per month we put away pays our property taxes such are 4k-ish a year right now, what's left over goes to our savings account. Our utilities are paid from our SSI as are groceries and eating out (which we haven't done much because of the virus). Anyway we're doing MUCH better than I ever thought we'd be doing. Our monthly payments for our health insurance also comes out of the SSI. I almost forgot about that. We can do what we want. We've held up a trip to Italy and surrounding countries due to covid. That vacation fund keeps growing. I think having a mortgage free home is the key to anyone's retirement.
I was very surprised that the top 20% was only $600,000. I think most people would look at that without a number and say the top 20% would have to have several million dollars. Now, if your net worth is $600,000 you more than likely don’t see yourself as uppee class. Or, maybe I can't see it and others do. Great video, and glad you used the median.
And it’s funny, I was just about to type something about the 150,000 views video 🤣. That's awesome! Big congrats, Erin!
Net worth is not just assets, but liabilities too. If you're thinking the upper 20% have millions, you may be right. But many people have debts too -- loans, accounts payable, wages you pay your employees if you run a business, etc.
I was pretty surprised by the $600k mark as well…it just seems so…low. The US Census Bureau defined these categories. I would guess most Americans don’t start to “feel” wealthy until maybe $1.5 or $2 M…maybe more? I mean there are so many factors at play in that feeling.
Love the video! Since this can be local to where you live, by age, married, have kids, whatever situation you are in. I think you should do a series of this by states or region of the United States.
It is so relative to so many different factors!!
This is a good delivery of this content but location also plays a large factor determine which quintile you're in. Upper middle class in the middle of American is similar to living paycheck to paycheck if you live in SF or NYC.
There is a thing called "net worth poverty." If you are "net worth poor," that means your net worth is 1/4th (~$4k) of the income poverty line (~$13k for singles). A person who is "net worth poor" may not be considered "poor" in income. As your video says, a $100k income could still mean you live paycheck to paycheck (and/or have unpaid car loan, student loan, home, etc.)
I've heard of some studies that showed that net worth poverty had a greater impact on a child's well-being than income poverty. I've been trying to find a copy of such a study but haven't found it.
Interesting! I've been doing some research on beliefs on finances are imprinted in children at very young ages....future video... 😊
Another good video. I’ve always said it’s not what you make, but it’s what you invest. I saw so many people my age buying the latest toys, the biggest houses, a new car every three years. I did basic investing and recently retired. I’m well into seven figures of net worth with no debt. I graduated college with $1,500 in my bank account. That’s all I had in the world. I obtained a government, and paid my son’s college. Nothing fancy, just discipline and not relying on anyone else to take care of me.
That last part is golden… “just discipline and not relying on anyone else to take care of me.” That’s what I wish more people listened to! That’s all it takes! 🙌 asker said than done for most I suppose though
Your 100k views are well deserved, Erin! Congratulations! It’s no surprise to me, though, as you talk about money in a non-judgmental manner. Keep up the great work!
Thanks Bill!! 😊
I think net worth is a more holistic measure, but factoring in a home really changes things. Whether you inherited property has a *huge* impact on your quality of life. People who don’t have to pay rent (just taxes, maintenance, etc. but no mortgage) means you have significantly less debt than mortgage-havers and more wiggle room for discretionary spending. I like the net worth assessment, however, because it takes account how much you actually save/invest instead of solely how much you earn. I am 25, make $63K but have a lower middle class net worth. However, I know people who make significantly more and have a negative net worths. Basically, I think the net worth metric is more holistic but much easier to skew (with the house).
My mom passed on Jan 11th due to cancer at a pretty young age of 57. She was always a saver and investor but most of her life was in the lower income range due to having me at a young age. When she passed I realized her investments and savings instantly put me in the upper 20% of wealth that you mentioned. It’s interesting since I never new this about her. I think her highest pay was $16 an hour. So to have that much wealth at age 57 shows exactly what you mention in this video that you don’t have to be wealthy to build wealth. Personally I’ve always worked on building higher pay checks rather then saving but I have realized I need to do both.
Also I have to say this is the first video I have seen of yours and something about you is very kind and smooth to listen to. Take care and keep it up.
Great video! It is interesting according to your video based on income my household is lower class, according to this one we are middle middle class. Last year we paid off our mortgage and own our cars outright. So it is all net worth!
There are really two key strategies in accumulating wealth: minimize debt, and invest early. I paid off my student loans in one year, with $30k salary as a pediatric resident. This allowed me to pay off my mortgage in five years instead of 30. When I bought my second house, it only took me one year to pay off the mortgage. I bought stocks (Intel and Microsoft) with my very first paycheck. By age 45, I became a multimillionaire.
One can never become wealthy by being frugal. One will never become poor by being generous.
30k or 300k salary?
@@samsongxin A resident, so 30k is correct but on the low end (maybe first year resident)
Thinking out loud. If 10% of upper middle move to wealthy class, by definition of statistics, the whole distribution would have to be recomputed such that the wealthy class is still 20% and upper middle is also 20%. Therefore, it isnt really a thing that one can switch classes after achieving that median number, because that is a moving target.
Your point about the behaviors that defines these classes! Absolutely fantastic way to look at it. I relate to that myself. Before watching your video, I know that I am a very high income earner and can afford many things, but I never thought myself in the wealthy class. I am in my late 40s and way past that 600K mark. This video help me put things in perspective. Great job!
Thanks for your thinking out loud, it's so true. The census bureau would just re-tabulate! Congrats on your hard work and savings thus far!! 👏 I'm glad you enjoyed it!! 😊
My definition of rich has always been: the ability to maintain a reasonable standard of living without working. However from there, there are three kinds of rich,
rich (lower case r). Can maintain standard of living but still need to maintain a budget.
Rich (upper case R). Can maintain without worrying about a budget but doesn’t live extravagantly.
RICH (all caps). The sky is the limit with no thought about living luxuriously.
I like that!
Present value your guaranteed income into your net worth . Example if a husband and wife are collecting a social security benefit of 50k annually and another 30k from a pension for a total income of 80k the present value on this income following the 4% rule would be 2million dollars ..
.
Good point. I brought it up also after you.
Most don’t understand the 4% rule though.
So I usually take the 80k and just say one will get this annual amount for perhaps 10-15 years in retirement before croaking. Maybe 20.
So simple math 80k x 15 years = 1,200,000. The number is a lot different and more conservative and it’s easier for others to understand the concept of future income flow.
Cool 😎 I'm in the upper class with low income but 620,000 networth
Nice job Eric!! 👏👏
My husband and I never made much money. I read everything I could find on frugality. Two kids went to private colleges, one went to a community
college. Find friends with similar interests and values. Tina, Al's wife
I like videos like this with a breakdown of how your net worth can affect your decision-making thought process based on the cost of whatever it is you're buying. I don't think we take into account how subjective that process can be based on an individual's goals and how they see their current financial situation. I know people who've hit that roughly 100k net worth threshold, and they're convinced they can live pretty much like millionaires because to them, that easily qualifies them for an easy to pay, low-interest monthly payment on that new car, AND new motorcycle, AND new boat, while having a little $10k-$20k safety blanket in the bank. They give off the illusion that they have more like a $500k net worth because they're constantly seen with brand new vehicles and higher end stuff in general. For me, I'm somewhere just above that upper middle class number, and because my goals are to own a couple of larger properties by the beach and in the mountains with zero debt, even until I hit a $2-3 million dollar networth, I'll be driving old reliable $7500 Silverados and paying cash for any single thing I ever want other than interim-level properties. It's all about priorities, goals, and subjective financial viewpoints.
Will those properties be rentals? Otherwise buying PROPERTY is debt( maintenance, property taxes). Mortgage free is not debt free when you're paying taxes to keep the property
@@JK20239 Great point, I'm sure I'll end up doing the occasional Air BnB rental on them which will offset the property taxes and maintenance, but on the other hand, I don't really feel a desire to work past about a 7 or 8 million dollar net worth, and as of now, those two properties are kind of my aspirational peak (with a few other smaller assets I have in mind as well). I just feel like I'd rather get to about 48-50 years old and then cut back my commitment to working by about 60-75%. It's weird how we all live life as if we'll see 85 or 90 years old, but most people pass in their 60s and 70s. I won't work myself to death personally, and even at age 33, I can feel experiences becoming more important than wealth to me. Hope you have a great one.
Thank you for sharing this! good luck on your financial goals, you got this!! 👏👏
1000%
I make around $55K @ 41 as a systems administrator. I recently crossed the $500K threshold for net worth. I am not feeling that upper middle class. Most of my "wealth" is from the house I bought in 2012 @ $245K (refinanced in 2016 @ $310K but throw every dollar I can to pay it off) which is now worth about $650K. I am very cognizant that the value of the house could crash by 50% before the end of the year. I don't believe I will ever be under water. Best way to get there is by not spending what you don't have to. It also helps having a spouse who is also aligned with this goal.
I am very close to having a $1M net worth, but living in CA I certainly don't feel "rich". Most of my net worth is tied up in my house. I bought my house 6 years ago and it has shot up about 500k in this hot real estate market.
Sell your home and move to a low cost area with no state taxes to buy two homes in cash. Rent one out for income.
And your property taxes shot up as well. Toss the home and cut the tax bill
I feel you! 1M doesn't feel like wealth in many areas of the country. Congrats on your real estate win!! 👏
Over 1M @34, thx TSLA :) I see myself in the middle class. Not rich! Might be my mindset that has changed. Don’t over extend yourself!!!!!
BTW 1M is not that much money…..
I've always thought of my net worth as "comfortable". Based on your metrics I'm wealthy. But I don't live like I'm wealthy, because I don't feel wealthy. But wealth is relative. My father died when I was 5 and we struggled financially. I started working when I was 12. I did not go to college, just worked and was able to retire at 52. I reuse plastic bags. I will cut the toothpaste tube open to use every last bit. Anything that comes in the mail with a blank side becomes note paper. I don't spend much on cloths, but my hiking boots cost $400. I will only stay at nice hotels due to a traumatic experience I had in my working years. You wouldn't look at me and think that guy is loaded. Money doesn't define who I am nor make me a better person. Best to all in reaching your goals. Most important is that I would give it all away to bring my daughter back. Kids are what makes you rich.
Yea this is incorrect, it should
Measured in income not net worth.
My heartfelt condolences to you
I looked at several definitions of “middle class” a few years ago. The one which seemed most sensible and easiest to understand was written by two men from the World Bank: if you can buy a moderately priced new car without a loan, you’re in the middle class.
Edit: I just read the comment from Sam Iamdj. That reminded me of sth I’ve learned while earning poverty wages the past few years: financial wealth may be measured according to your (Erin) formula, but real wealth is measured in social connections. Who have you affected, and how? Who, if anyone, will really miss you when you’re gone? Who would help you if you suffered some sudden, unexpected disaster? It’s worth noting that farmers may have low accumulated financial wealth, but score highly in happiness surveys due to their social connections.
Hi Erin, Great content and presentation! Now that you have done one on income and one on net worth, the next step is to combine the two. I saw a chart a few years ago that someone with income of $100,000 and investable assets over $1,000,000 is in the top 2%. Once we get into the middle and upper classes, investable assets becomes a more informative metric, as it sets apart your primary residence which, while a part of your net worth, does not contribute income. Just my 2 cents. Appreciate your work!
Depends on age and stage of life. Married couple with 2 million In investable assets with, no liabilities and kids on their own certainly would be considered upper middle class, but may still not be free of financial anxieties. It’s really a state of mind. Upper class to me means that you could loose 75% of your assets without affecting your life style.
I found this a thought-provoking video. I'll have to say that my attitude toward money, wealth and life has changed over time. Back when I was young and broke, I thought about what physical things money could buy. Now I think about what experiences it can buy.
As far as my definition of wealth, it is complicated, but bear with me on this.
To me, being independently wealthy, means being able to afford your desired lifestyle with no additional income from work.
Being wealthy means being on track to become independently wealthy while still supported your desired lifestyle.
Being able to afford you desired lifestyle means prioritizing everything you've ever wanted. This would include essentials such as food and shelter. Desires like a nice vacation. Future oriented things like saving for retirement. And even seemingly impossible dreams like owning your own private jet. Then drawing a line at where your money runs out. If everything in your desired lifestyle is above the line, then you can afford your desired lifestyle. If not, then you can't and you've got some work to do.
The lesson from this is that your wealth is based more on your desires than how you stack up compared to other people or some magic "wealthy" number.
100% yes!!! 🙌🙌🙌
Sounds familiar. You can/do anything you want but not everything you want.
Excellent content Erin, I'm 68 years old and became a millionaire by the time I was 40 years old, got married and had two children grew the net worth to 3 million, a retirement / 60 years of age gave 1/2 of it to the ex-wife. And have been able to live off of the capital gains for the last 8 years. So for the last eight years I've been traveling internationally and not working and living off of my capital gains and my net worth has stayed the same about 1.5 million. I have a question and it's about the complainers and whiners in America that believe that capitalism has failed and Americans can no longer "make it" I watch these type of videos and am stunned how many people believe that you can no longer build Networth because it just flat-out cost more to live than what you can make which I'm sure you and I both disagree with. Can you enlighten me why these people believe that capitalism and saving is impossible in the United States of America in this day and age?? Thank you in advance forgiving your answer
I will answer it for you, David. Capitalism is to be used. So many people never take advantage of it. They sit on the sidelines. Our society wants to kill it with socialism.
Bravo for you! The key to retiring early is lowering your expenses. You have done a great job.
Key to building net worth is living below your means… you don’t have to spend your paycheck in its entirety…should invest 20% long term of your gross earnings..
Because a woman (girl?) who, until a couple of years ago, worked as a Barista (after getting an expensive degree at a private school), and hasn't managed to pay her student loans, got into Congress and suddenly became an expert on finance and economics!
AOC- financial and economic genius!
Some aren't willing, though able, to live below their means. We are consumers, bred to waste & want & fomo is real for certain generations. The value of our time compared to the wage earned is not understood or taught.
To be fair, young people are coming up in a different financial environment now. College costs have been going up far faster than inflation for decades. At the same time, the education requirements for a even entry level jobs have been rising. Young people are starting their careers with massive college debt and companies are actually paying them less, when adjusted for inflation, than they paid the debt-free college grads thirty years ago. When people feel they can’t win in the current system they start looking for ways to break it. Both the election of AOC and Trump were propelled by this kind of thinking. There’s going to be a lot more of that happening if the number of financially insecure people continues to rise in this country. I agree with absolutely everything that has been said about debt and saving on this channel, but I fear we are looking at a tidal wave that’s going to break all of our nest eggs.
Been dollar averaging into Vanguard mutual funds for 20 yrs. 45 yrs old household with a net worth of $5mm including retirement savings. Took 10 yrs to reach 1st million $, then another 5 yrs to 2nd million $, then 3 more yrs to 3rd million $. Once u build up a large base, then it will grow exponentially... need good habit, consistency and determination...
My net worth is between 1 and 2 million and I estimate that I am in the top 8%. Don't ask me how I came to this conclusion. I'm just a good observer and a good saver.
Sounds like a good estimate to me, congrats on the hard work saving and investing!! 👏👏
That's a mighty big range for your estimated net worth. A bit like saying your net worth is between zero and one million. Having a million puts you in the top 10%. Good job.
@@kerrynight3271 That's because I don't know if I should include the appreciation of my house, which is $500,000. It is only on paper so I didn't want to include it in my net worth, then again, I could have. The same for my stocks, but I did fudge a little by including half of the paper profit in my net worth.
@@howellwong11 Sounds like you're doing great. I'm proud of both of us.
Nice Job, Great Positive Energy and Motivated passion in your voice! Brief, Concise, and Clarity in delivery! Keep e'm coming!
Great video, Erin! Glad I found this channel. I always thought (based on...basically nothing) of the upper class as those people who don't HAVE to work to sustain their lifestyles. Kind of like a landed gentry (upper class) vs. merchant (middle class) idea. I was really interested to learn these actual guideposts! You've definitely got a new viewer.
Thank Dan! Welcome to the channel! 😊
Dang. This made me feel better about life. I’m 37 and upper middle class and didn’t know it. What a trip
Interesting. I have a net worth of over 700k. I don't feel wealthy. Still working my tail off! 4 more years...
Good luck on your goals!!! 👏
Same.
I've found that if you focus on increasing net worth, your income from all sources will also increase as a byproduct.
You're very welcome, Erin and THANK YOU for all of the amazing, down-to-Earth content. I've been telling lots of people about your channel and will continue to do so! Good stuff!
You're the best!!! 😊 Thanks so much!!!!
I agree with most of what you said. I work in a blue collar good paying job. My peers earn the same as me. However they are always short on money. They work overtime, and are always buying in my opinion things they don't need. They are wants. Wants are great but keep in mind there are always the newer and shinier thing coming out next year, If you really want it save for it and buy it then. (Funny how interests may change in that amount of time) Myself, at work everyone calls me cheap. In their eyes that is probably true. When I had my last daughter I took the full 12 weeks off to bond with my daughter. Most people asked how I could do it and the answer was simple. I planned for 10 months during the pregnancy so I could do so. If I need a car I will buy one, but not buying a $100k F150 instead I purchased a used Camry. It better suited my needs. I believe I will retire much more financially secure than my peers. It is through diligence and dedication. It is not sexy but it works and in the end I feel that my family and I will be rewarded.
Well said. Same here. People call me cheap at work. I got use to it and this doesn’t bother me a bit. I saved minimal of 20% of my paycheck. I don’t work overtime period. Weekend is my time off to spend with my family.
This video really helps to calm the nerves. I started in teaching so we don’t contribute to SS but a pension; however, at the age of 40 I left the public sector and joined the private world. Now I’m finally putting in to SS and 401k.
I originally felt so behind the 8 ball since our focus was being debt free, but currently our household has a net worth of $150k. We can definitely reach more than $600k net worth by the time we retire in 25 years.
Pensions are amazing, so if you have one, consider yourself very fortunate! 😊 Good luck on your savings goals!! You got this!! 👏
@@ErinTalksMoney No one really factors in pensions as a part of net worth. I think how could it not be? Just looking at it as a simple annuity mine would be worth approximately 1.3M in order to pay out my yearly benefit. Yes pensions are wonderful. What are your thoughts on pensions/net worth? My wife and I live beneath our means, have no debt, save regularly and invest. I'm 59 and retired less than 4 years ago she(58) hasn't really worked in 30 years. Our net worth is 1.6M not including that above mentioned pension. Do I feel wealthy? No, I do feel comfortable.
This topic is actually pretty deep when you get into it. What difference does it make what someone’s “class” is? As you mentioned, decisions about how much to spend and how much thought must go into those decisions tell you the most about someone’s financial position. If I have a net worth of $1 million today at age 55 but it is only accessible if I sell properties that I live in or break into a retirement account and my annual income is modest, I am not upper class from a practical standpoint. To me upper middle class means you can stop working for a year or two, still be on track to retirement. Poverty and lower class on the other hand to me mean that you buy only what you need to get by physically and you hope that you never ever need to go to the doctor.
I was taught by my high school Finance Teacher to live below your means and to save at least 10% of everything you earn.
That is solid advice. I would add the sooner you start saving, the sooner you can retire. The small amounts of money I dumped into retirement funds in my twenties are now a lot of money in my fifties.
I like your smile, as always, and your new hair style. Thank you for using medians instead of averages in this video. It's shocking how low these medians are. Americans need to get way better at financial health. Thank you for inspiring us toward that. I was at negative net worth at age 43 and now at age 59 am at more than twice the "wealthy class" median. But by my lifestyle you'd think I was in the lower class. I guess that's how I got "wealthy", by continuing to live poor after my income went "upper".
Frugal habits go a long way, congrats on your financial success! 👏👏 (I actually really like seeing the averages …I know they are skewed, but I still like the bigger numbers, I think it helps push to strive for bigger goals. But I know most people prefer the median) 😊
@@ErinTalksMoney Good point about medians not being good targets. They are horrible targets. Maybe medians and averages should be important measures of the same story about what is actual relative to what is possible.
I'm older than you, but have a similar financial situation. No one would look at me and my little house and think I had a net worth of more than a million. I give away a lot of money, but my net worth increases every month. Congratulations for your success.
Another interesting fact is that most of the people who retire with a net worth of around $250,000 have most of it in the equity in their home. If you took away the home equity, these folks would have a net worth of around $45,000. While it's great to own your home, unless you plan to sell it or do a reverse mortgage, you need to have money to live on when you're no longer working.
And many people in higher age brackets sell their home and live in an apartment. That's what my parents did. Now, they are renting a duplex and have lots of money to do what they want.
I'm glad the UA-cam algorithm pointed me you your channel! I have subscribed and will spent the next few minutes (hours) watching more of your videos. You have a very good presentation that makes it enjoyable to watch. I wish you nothing but the best for you.
Thanks Rick! Welcome to the channel! 😊
Love this stuff Erin, You really need to be a financial adviser, the simple way you explain things is far better than the adviser I have. But I'm sure you are doing what you want. Keep rocking it girl.
Hey Philip! Thanks!! I always think the best way to explain things is in the simplest manner. I really hate when explanations are complex and convoluted - that doesn't help anyone. Keep it simple!!
One of my late uncles once said something in conversation that became my permanent measure of financial security/wealth. In response to someone else's comment he said, "The only question is how much money do you make before you even step out your front door?" To me, this question is a critical overlay to all the charts, graphs, etc. various financial gurus have used to try to describe wealth and wealth classes. It matters less what your paper net worth calculations produce or how much money you make. The point I took from his observation was this. The degree to which the person/family has sole or substantial control over the income sources that power their lifestyles is the difference-maker in any discussion of wealth & class. I can have a million dollar net worth, but if my lifestyle is powered by a six-figure income that can be virtually cut off in one fell swoop, I am not weathly. And if the elimination of that same source would result in a major drop in my or my family's lifestyle choices I AM NOT securely upper class. Until I secure that income source or some equivalent apart from any employer, I am merely a renter of an affluent lifestyle.
Great content and really nice haircut :) I've enjoyed the video, thank you.
Hey JJ! Thanks! Fun fact - I had to curl my hair because I did a terrible job of cutting it and was uneven 😂 (I did it really quick one morning) The curls made it so you can't see the uneven-ness. I evened it out on Sunday so I can wear it straight again! 😊
After years of bad decisions, my financial life came apart in 2008 after loosing my high paying job. Needless to say, after a bankruptcy and a foreclosure, I look at money and spending a lot differently. I slowly rebuilt my credit by paying my bills on time. It took years. Now I have excellent credit. I buy what need with cash. My car is 8 years old. I plan on driving it another 2 to 4 years. I bought a house i can afford. Based on your chart, I'm in the upper middle class. Blessed.
Even though I have a high net worth, I am still extremely frugal. Old habits die hard.
Weird I'm a little shy of upper class. But I'm a carpenter averaging around 50 grand a year. I guess that's the power of living frugal. Thanks for the video.
Another great video! I find even though I am more than comfortable now, I still check prices - even at the supermarket. I don’t like being ripped off - even if it wouldn’t really make a difference to my checking account 😜. Happy to buy the organic free range eggs for the little chickies being better treated. But I will buy the big bag of carrots and chop/freeze what I don’t need right away because it is better value 🤷♀️ Watch the Pennie’s and keep the dollars growing 😊
So true! 😊 Savers never want to waste a dollar - I'm right there with you Fiona!
Old habits die hard. I'm still frugal, but don't have to be.
I feel the same @Fiona MacDonald. I support the Happy Eggs brand but want the bulk carrots. I wear clothes until they are no longer good and I enjoy finding second hand clothes with ample life left in them. I tend to wear shoes until the tread is worn. I splurge on quality when I want to but refrain from spending on certain things. Saving money provides choice and I really enjoy having choices.
Excellent topic Erin. The first is always hardest, whether $1,000, 10,000, 50,000, 100,000 or $1,000,000.
congrats on the achieving the 100k views! Well deserved, Erin!.
Thank you so much Anupam!! 😊
I agree with Steve who commented, "Net worth is heavily dependent on age, so maybe a breakdown for age brackets would be useful." Hoping you will delve into that topic.
All the possessions in your home such as furniture, paintings, jewelry, clothing, computers, TV, etc. are part of your net worth too if you own them outright, i.e. didn't buy on credit that hasn't been paid off. In an average family that is not a small amount -- I would say at least $10k-20k. But these net worth surveys (such as SCF that you quoted from in your video) almost never include them. They often only include the usual items such as cars, homes, liquid assets, etc.
Those kind of personal items are what I consider fluff. They are depreciating assets and lose their value daily. Collectable items could be counted but not TV's and furniture and clothing. You would have to sell them for pennies on the dollar. I don't even like to consider my personal home in my net worth. If you sell your home to have the cash you still have to live somewhere and would either have to rent or buy another house. Financial institutions and accounting practices allow this kind of fluff, but I personally think it inflates the real net worth of an individual. Just my two cents of net worth opinion.
@@davidstephens6458 But we buy new things periodically, while old things depreciate as you say. So I think there is a roughly stable amount of net worth for such possessions throughout our lives. Also, I think we should try to do an appraisal of our things If your hard drive containing old family photos is broken, how much are you willing to pay to recover the photos? That's the cost (and net worth) right there.
@@rabidfollower Your things aren't worth anywhere close to what you think they are. Even most jewelry. For most when calculating networth the only depreciating asset I would include is maybe your car.
(perspective of someone living in the bay area in California) lower is struggling and being concerned about money to live. middle is owning your own home and living without financial concern to speak of. upper 1 is having enough money that you have to spend time figuring out what the right thing to do with it is. upper 2 is being able to buy or give whatever you want, and fund other projects as well. based on current income (in this area), it's lower, 400k, and assets of > 5m and upper 2, (income doesn't matter, net assets >200m - imv :)
I've had some hard bumps in life. I have about 20 grand in my savings. My car is payed off. But I only bring home 500 weekly. I consider myself in the "poverty" class. Finally starting to get somewhere though. Life has not been fair to many of us.
Hang in there. You'll be okay. Where there's a will, there's a way. And you sound like you have the will to succeed. You know it won't be easy, but you have the guts to get this done. Wish you all the best.
20k savings...500/week take home? That's outstanding 👏 you may have had bumps, but you seem to have taken them well! Good job! Guys I work with, bring home 1000+/week with 3k savings. Keep doing what you're doing! 👍👍👍
Don’t lose hope. My 2 cents. Right now you are feeling the pain of making blood money. Money created from the blood, sweat and tears of your hard work. Once you get some breathing room don’t spend your blood money on a reward. Turn that blood money into a spring of wealth. Make or find a way for the blood money to make money on its own, spring money. Only use this spring money for rewards so that you won’t have to ever go through blood money again.
Erin, I see a lot of comments saying they have high net worth but don't feel wealthy. That is why 90% of people say they are middle class, as you say at 4:39. Many upper-class people think they are worse off (while also some poor people feel they are better off). But this has nothing to do with "feeling" rich or not. It's all about the percentile you are in. If you are in the upper 20%, you're in it, and that's a mathematical fact you can't argue. If you feel you don't have high buying power in the upper 20%, that has to do with the economy, not your wealth.
Exactly! Feeling wealthy is a personal feeling - has nothing to do with how the US government statistically divides things. And I would probably say that most people don't feel wealthy because of lifestyle creep and because they compare themselves to others who seems to have more.
Wow. This is an extremely interesting video. My wife and I are in our late 40s and are over that $1MM mark in retirement savings alone. I always thought we were broke. We live in a pretty modest house, but our kids are in private school so it has a financial impact to us. We have older cars and so do our kids. I guess we’ve earned more and saved more than I thought. I’m rich? I guess I should buy an Armani suit and stop shopping at Costco and JosABank for my clothing. I should also hug my parents for convincing me to stop being an idiot and finish college.
Or you should continue living exactly like, The Millionaire Next Door! 👏👏👏
@@ErinTalksMoney ha! You’re exactly right. I guess it’s just the example I’ve had. My grandparents accumulated a multi-million nest egg as have my parents, and neither had a college degree or a really high paying job. They just never spent money. I guess we’re doing likewise. Thanks for the great video!!
@HIMcDonnough. I vote for the last one. Thank your parents for their excellent advice. It has worked well for you and your family. Blessings.
How does it feel to know that the $1m you have lost 20% of it value just this year and will lose another 20% next year? What value does $1m have in hyperinflation?
@@fullclipaudio Yes there is inflation but I can tell you that having money in the bank feels a LOT better than not having extra money. There are plenty of things we cannot control. The stock market will crash. Oil prices will increase. The cost of electricity and natural gas will go up. Food costs will rise. We will have to adjust our way of living. The world is in for some challenging years ahead. I hope people are prepared. Cheers.
I retired at 54. My house is paid for and has doubled in value in 6 years (San Diego). My stocks have almost doubled after hiring a Financial advisor that manages those stocks, which doubled in 6 years. I still drive a older car, Dye my own hair, shop at Walmart and cook my own meals. I never shop at high end stores. I still live & feel middle class, if that. I live off my modest CalPers pension & have lifetime medical coverage, a big perk offered back in the day.
For a country that fought a war to overthrow a class system, you guys have done a fantastic job emulating it. Queeny will be proud 😄
Not sure if I buy these metrics/brackets. I just retired at 55 and apparently I'm upper class. It doesn't seem like it.
Glad I started saving in my early 20s. Blew my share in my 20s to mid 30s. Tapered back after that. Never made more than 65k. Got my toys, but didn't get into buying car after car. Not my style to try and impress others with vehicles. Buy quality, not often. Maintain my own cars and motorcycles. Make my own meals. Frugal not cheap.
It can be done. Don't carry debt other than mortgage or 2/3 car value if you must.
I've married two times. The in laws couldn't have been any different. First one owned a small town gas station and invested in real estate & stock market and passed in the house he built. Other was a PHD Phycologist lived in a really nice home and appearances matter. I always thought it was interesting that when the first marriage ended he was worth around 5M, more than twice the second in laws. At the second marriage a friend told me "blue bloods and blue collars".
If you have owned a home for an extended period of time in one of the several high priced markets you are probably in the upper 20% just by virtue of your homes equity.
I need some guidance please. Lately I've been considering buying dividends stocks for retirement, I have set asides $400k but somewhere along the line, I get cold feet maybe because I'm a rookie and have no idea what I'm doing.
You've saved for yourself some good bucks. Get a professional, my sincere advise.
My portfolio grew by 100% within 6 months. Couldn’t have put it better myself. Last year a colleague introduced me to a financial consultant Rosemary Carlson who has been helping me find investments that have significant growth potential. She invested my money in reputable companies which their stocks must always rise after any dip.
@@berwickperu7683 How are you investing? I have around $145k, only index funds, half in s&p and half in vigax, i need something more aggressive to grow my portfolio, What do you think I should try?
@@stricklandpilman2123 I would advice you to reach out to Rosemary Carlson. Through her you can get strategies designed to address your unique long-term goals and financial dreams. So, you can check her out online and subsequently contact her from there.
@@berwickperu7683 Just researched her accreditation online and qualifications on FINRA and SEC, she seems really solid and i have sent her a mail already hopefully she replies soon enough.
One of the easiest ways to determine if you are doing well is take your annual expenses in retirement and X by 25. Example $36k annual expenses X25 = $900k. You can then back out social security and any pensions to get the $ amount you need saved. If you have this saved you will be fine in retirement. Dollar amount means very little, need to know your expenses.
So true, thanks for sharing Scott!
This only works if you retire now or soon. If you retire in, say, 30 years, then you need to adjust the figures for inflation. In 30 years, your $36k expense will be doubled because of inflation, and you'll need $1.8m to retire, not $900k.
@@rabidfollower True, depends on length before retirement.
Thanks, Scott great and easy way of looking at it.