Net Worth At Age 35?

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BuddyBeel
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Net Worth At Age 35?

Post by BuddyBeel » 30 Oct 2017 20:30

In order to retire at age 65 with $1,500,000, and to be considered on track, what should someone's net worth be at age 35?

Also, what is the average net worth of 35 year olds? Just to give myself a starting point. Thanks!

Profit not Prophet
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Re: Net Worth At Age 35?

Post by Profit not Prophet » 31 Oct 2017 10:12

The Fraser folks think 300K at age 35 ish is the current average
https://www.fraserinstitute.org/blogs/a ... -in-canada
Last edited by Profit not Prophet on 31 Oct 2017 20:23, edited 1 time in total.

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Re: Net Worth At Age 35?

Post by SQRT » 31 Oct 2017 10:55

Saving over 20-30 years isn’t usually linear and tends to vary a lot by individual. When I was 35 my net worth would have been maybe $100-200k. After an expensive divorce at age 42 it was negative. Hit 2 commas late 40’s. Retired at 56.

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Re: Net Worth At Age 35?

Post by Taggart » 31 Oct 2017 12:23

I've met people many years ago who retired at the age of 35 or a bit later. Both couples each had around a half million USD, but that was around the mid to late 1980's when they left full time employment. They are now worth well over a $million each, even after retirement, travelling the world and residing a few weeks or months at a time mostly in countries with low costs of living. Now in their mid to late sixties, check out Paul & Vicki Terhorst and Billy & Akaisha Kaderli, although the Terhorsts stopped updating their website last year.

I also know that Andrew Hallam (Millionaire Teacher) was worth a $million CAD at age 35, and retired in his early forties. Ross Grant of BTSX fame retired from his full time engineering job, again, in his early forties.

One thing these very early retirees all have in common. They know how to be frugal, and live within their means. Plus, they know how to invest in such a way that so far, it's worked out well for them.

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Re: Net Worth At Age 35?

Post by AltaRed » 31 Oct 2017 12:34

Those people appear to be outlier invidivduals who had a number of planets line up for them. It is not what the average employee can accomplish given the curve balls life throws one's way. As SQRT suggests, net worth at 35 needed to reach $1.5 million depends very much on how much one can contribute to the portfolio and when.... and how one invests (skill, luck and timing). The 90's were a pretty good time for investing.

Individuals who were lucky enough to have substantial career moves, probably like SQRT and myself, made and invested most of 'our' bundle in the 45-55 age period. I was busy living below my means and still paying off a mortgage at 35 as quickly as possible, and thus did not have much other capital 'net worth'. But at age 40, that changed. By age 45 or so, I think, if I recall correctly, more than half my net pay was going into investments.
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deaddog
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Re: Net Worth At Age 35?

Post by deaddog » 31 Oct 2017 13:25

Being an outlier isn't a bad goal.

It means you have to do something different from whatever everyone else is doing.
“The person who follows the crowd will usually go no further than the crowd. The person who walks alone is likely to find himself in places no one has ever seen before.”

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I had negative net worth at 35 (Divorce will do that to you :( ) and retired at 55.
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Re: Net Worth At Age 35?

Post by AltaRed » 31 Oct 2017 13:44

deaddog wrote:
31 Oct 2017 13:25
I had negative net worth at 35 (Divorce will do that to you :( ) and retired at 55.
Here is an outlier for you. I retired at 57 and divorced at 59. :lol:
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Re: Net Worth At Age 35?

Post by Peculiar_Investor » 31 Oct 2017 14:03

BuddyBeel wrote:
30 Oct 2017 20:30
In order to retire at age 65 with $1,500,000, and to be considered on track, what should someone's net worth be at age 35?
Welcome to FWF.

I"m not sure it is possible to answer that question, it depends on your savings/spending habits, your portfolio design and construction and what you expect from returns going forward. For starters, as others have mentioned, it is important to live within your means and saving early so that you can grow your net worth over time.
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Re: Net Worth At Age 35?

Post by Koogie » 31 Oct 2017 14:07

Why do people think the OP was asking about early retirement ?

In order to retire at age 65 with $1,500,000, and to be considered on track, what should someone's net worth be at age 35?
Buy very little, sell even less.

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Re: Net Worth At Age 35?

Post by nile » 31 Oct 2017 14:25

$1,500,000
Target years to save 30
Amount currently saved $200,000
Current savings $500 Monthly
Expected rate of return 6%
Inflation rate 3%
Total after 30 years $1,638,326
Savings required to meet goal in 30 years $358.74 monthly
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Re: Net Worth At Age 35?

Post by AltaRed » 31 Oct 2017 14:44

nile wrote:
31 Oct 2017 14:25
Savings required to meet goal in 30 years $358.74 monthly
Good to get this back on track. That said, there will need to be higher savings to compensate for taxes that will be paid along the way, e.g. on interest and dividend income, albeit not in a registered account.

But 30 years from now, $1.5 million isn't really $1.5 million either...unless the OP was considering an inflated number already.
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Re: Net Worth At Age 35?

Post by SQRT » 31 Oct 2017 16:11

AltaRed wrote:
31 Oct 2017 12:34
Those people appear to be outlier invidivduals who had a number of planets line up for them. It is not what the average employee can accomplish given the curve balls life throws one's way. As SQRT suggests, net worth at 35 needed to reach $1.5 million depends very much on how much one can contribute to the portfolio and when.... and how one invests (skill, luck and timing). The 90's were a pretty good time for investing.

Individuals who were lucky enough to have substantial career moves, probably like SQRT and myself, made and invested most of 'our' bundle in the 45-55 age period. I was busy living below my means and still paying off a mortgage at 35 as quickly as possible, and thus did not have much other capital 'net worth'. But at age 40, that changed. By age 45 or so, I think, if I recall correctly, more than half my net pay was going into investments.
Yes, very similar to my experience. In my early 50’s I was able to increase my net worth many times over due to career success. Luckily for me, my divorce happened much earlier.

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Re: Net Worth At Age 35?

Post by ig17 » 31 Oct 2017 19:33

nile wrote:
31 Oct 2017 14:25
$1,500,000
Target years to save 30
Amount currently saved $200,000
Current savings $500 Monthly
Expected rate of return 6%
Inflation rate 3%
Total after 30 years $1,638,326
Savings required to meet goal in 30 years $358.74 monthly
I find this kind of calculation confusing.

Is 6% expected rate nominal or real?
Does the calculation factor in the inflation rate? If so, how?
Is future value nominal or real?

Doing some reverse engineering, I am guessing that:

6% is nominal
you just plugged in 6% into a compounding calculator
future value is nominal, not real
3% inflation rate doesn't really play any role in the calculation

Please correct me if I'm wrong.

======

This is how I do these projections myself to make them easy (for me) to comprehend:

use real (today's) dollars
use real rate of return, i.e. rate of return net of inflation
do not make any assumptions about rate of inflation, because the calculation doesn't require it
get the future value in real dollars, making it easy to compare where I'm now vs. the target.

In OP's case:

Present value: $200,000
Add $500/monthly = $6,000/annually
Use annual compounding
Compound for 30 years
Real rate of return: 4%
Future value after 30 years: $998,649.51 real dollars

Want to save $1.5M in today's dollars? Bump your savings to $14,600 annually (also expressed in real dollars, meaning that you will have to adjust them annually for inflation).

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