Wednesday, May 23, 2012

What's your net worth?

(Remember: when someone in design or fashion tells you it's an "investment piece" they are generally full of shit. Nevertheless, I want to "invest" in this sofa.)


A long while ago, I did THIS post asking people to (anonymously) confess what they made. Now I want to know - especially after the Great Recession - where do we all stand when it comes to net worth? Are people still anxious? Are people back to pre-recession spending? What's changed for you? If you stayed at home, did you have to go back to work? How much of your net worth is in assets vs debt? How much is student, home, or consumer credit debt? What's your game plan? Are you on track, freaked out, or just ignoring the whole deal?

Why am I asking? I was reading THIS post which lists one blogger's take on how much you should have at various ages in your life.


50 comments:

Anonymous said...

My partner and I are 31.5 and 30.5 respectively. Our net worth is approximtely negative 180K, which is about 40% mortgage debt, 60% student loans. I don't really feel anything about it - a few years ago it used to upset me, but I grew tired of always being worried about the debt. It will get paid off over time, and when any future child of mine starts thinking about university I'll really encourage them to figure out ways to keep the cost down.

Janell @ House of Fifty said...

Interesting post, mortage debt is not considered "bad" debt in the same way say credit card debt is. Glad to have no bad debt and on track in the savings dept., but that has not come without having to say no to a lot of extras here and there, but worth the peace of mind it brings.

Anonymous said...

I am obsessed with this topic of late. My net worth is very healthy, but only because of family money. I have over $500K in a trust, equity of $240K in my house, a mortgage of $160K and no other debt. I am insanely fortunate to have family money. But I am constantly stressed about my INCOME, which is low. I used to make good money but had a hard time finding a job when moving cities, so now work for myself but barely make ends meet. I know it seems like no big deal because of my assets, but having not earned them I stress all the time. It's also really hard to think that my kids will have fewer advantages than I did because I am not earning enough to keep this plush set up going. I stress constantly about selling out to big salaries at corporate jobs versus having the flexibility to make a little money but spend time with my kids.

Anonymous said...

We're 28/30. Total Net Worth is $180k. 40% 401k, 25% Cash, the rest is in various stock/mutual fund investments. We have $70k in student loan debt (grad school), no credit, car, or home debt. I thought we were doing okay (especially compared to our friends/social circle) until I took a look at the chart you shared-- $240k by 30, for 1 person? Really? Now I am feeling behind.

Anonymous said...

I thought I was doing well for my age (or at least, I feel like I am compared to people I know), but according to this chart, I'm already way behind. I'm 31, don't own property (but my rent is cheap), no debt, save 15% of my income in 401(k) and another 10-15% in liquid cash. Net worth is approximately 120K not including my car, which I own outright. What else should I be doing to get ahead? Now I have net worth anxiety.

Anonymous said...

You know the saying "I'm worth more dead than alive"? I think I would just break even. Good times.

Anonymous said...

It is literally 1/10th of what that chart says it should be.

Decorno said...

Remember that this guy says these are targets for the "above average" person (meaning, they invest and save as advisors recommend they do... real-life net worth averages are totally abysmal. Of course, that's why his post is interesting to me, to make sure we benchmark against good peers and not people who've failed to have and maintain a plan).

R said...

I have the total net worth of a thirty five year old. Sounds good except I'm 50. And I recently have gone back to work.

Scared to death of what the next 5 years will bring economically...

Anonymous said...

Decorno - first we have single mid-30s person design anxiety and now we all have net worth anxiety! The madness never ends! I need a drink...

Anonymous said...

Decorno, that's a good point... but I thought I WAS above average. That is, until I saw this spreadsheet. How does he account for the jump from 70K to 239K in net worth between 25 and 30?

Anonymous said...

I'm 50+. House is paid off, worth maybe $250K, of which, thanks to screwy inheritance laws where I live, I will get 50% if I'm lucky (a raw deal, since it was my money that bought it--I earned twice as much as my husband).
401K is 250K. Other savings about the same.
No debt (cars paid off too; college was long ago and anyway I worked full-time to pay my way through).
I've worked since I was 15 (part-time, of course, at first). All the retirement calculators say I will run out of money by age 82 or so, which is a worry (my mom is 87; my grandmas both lived to nearly 100).
Problems:
I worked for a few years at different companies pre-401K era and didn't manage to be "vested."
I moved overseas and for the past 15 years have been ineligible to contribute to an IRA.
I left my job, so my 401K is stuck where I left it.
I work now but I won't have anywhere near enough years put in to qualify for a pension where I am now.
I save (taxable accounts) but it's hard. My husband is very carpe diem and very jealous. He says he isn't going to sacrifice now so that I can party after he's gone. He is unfazed that I might be starving at age 88. (I dream of divorce but there are other complicating issues, such as custody of our daughter and the fear of being kicked out of this country without having her)
My Plan B (maybe it's Plan A?) is for daughter to become a well-paid doctor/engineer/actuary/whatever she wants as long as it's stable and pays OK. I am willing to babysit her kids! I figure I'll be working until I'm 80, which is OK because I love my work and it isn't physical.
BTW, my aunt, who is 72, just quit working as a waitress for a catering firm. She couldn't hack it physically anymore. But she barely can pay the light bill with her pension. It's insane.

Decorno said...

If you look at his "low-end" estimates in each savings area (home equity, 401k, and after-tax savings), his assumption is that you will save ~$132k (again, this is the low end) in the years between age 25 - 30:
$7k/yr in after tax savings
$17k/yr in 401k
~$12k in home equity
Total: $132k

Decorno said...

Anon 12:09... I know, I know. I am freaking everyone out lately.

Anonymous said...

I think what he left off the definition of "above average person" is "above average person who works in a high paying profession". It strikes me that regardless of how responsible / how high a percentage of your salary you saved, reaching his numbers would be virually impossible unless you were making at least $60-$70k right out of college (maybe slightly less if you live in a lower cost of living city). Between 22-25 I made $30-33k/year as an environmental consultant. In my high-cost-of-living city, that's just barely enough to get by on. Think I managed to save maybe $1000/yr, but that was living in a group house, not having a car payment, etc. From 25-28 I was in law school making negative money. From 28-33 (now) I've made $55-79k/year as a nonprofit policy wonk. Even saving 20-25% of my pre-tax salary, which seems reasonably responsible and frankly doesn't leave me with a ton of additional disposable income, it doesn't put me anywhere near the blog's target savings amount. I just don't see how even the most responsible savers could get there unless they were in high income brackets from day 1. On the other hand, the numbers seem like fair targets if you go to work in the financial industry in NYC right out of college.

Decorno said...

Anon 1:42 - agree completely.

Tara said...

Wow. We are 32/33 and our 'new worth' is not so great...
$250k in our 401k(s); $100k in cash; $380k equity in our house (but $800k debt on said house...). I thought we were doing okay, but maybe not. We live in San Francisco, so things are expensive and our (combined)income of $300k doesn't go far...and we are frugal. And my house looks like crap. :) Love your site, even if it is scaring me! ;)

Anonymous said...

Anon 1:42, if I were snarky I would say that he didn't leave off the high paying profession part, but that it is implicit in his understanding of "above average". Responsbile decision-making and professional accompishment must pair with high income, right? (Not that one could blame him for equating the two - we've all been trained to make this leap, thus the lure of this topic we're discussing. Have you ever seen a study looking at the value of education that didn't use salary as a proxy for success? I haven't, but that's a whole other box of cultural worms).

Kevin said...

Perhaps another question-- did anyone leave this kind of net worth behind due to the 2008 crash and ensuing years of economic stagnation?

doug @ tracery said...

I'm supposed to be worth $239,000? Are you shitting me?!? "Above average" or not, that's inconceivable to me. I'll reply as an Anon with the real answer, but it ain't that...

Anonymous said...

We're 38/41 and on my handy little spreadsheet we're showing just over $100k net worth. I don't count cars cause they're old but paid for. Big college debts for him, since rolled into 2nd mtg. Barring unemployment or other crisis, we should be debt free including house by the time the kid goes to college. Retirement saving is minimal now. So ...half a mil behind?

Anonymous said...

we are 52/59 and we rent with no debt, except my lovely graduate degree student loan debt that is unfreakingbelievable at over 100k. and I don't work, because he became sick and have been nursing him back to health. we might survive because we are buying a hotel in florida (with another couple). who knows where this crazy ride is going to end. just trying to survive the recession that just keeps on going.

penelopebianchi said...

I am 65; (believe me; I don't believe it.....but it must be true)

thanks to my husband; taking over running my business 22 years ago.....I am "safe"! (He also has family assets that his wise grandfather (an immigrant from Italy at the turn of the century) invested in!

Being in business for 42 years; I have seen a lot of "recessions" Never made one dent....even made business better!!

What I know about "business" could be "written on the head of a pin"!

This is far more than a "recession." Brunschwig and Fils bankrupt? Scalamandre bankrupt??

I have the first solid client in the past four years......starting now. Showrooms in the PDC empty. Major decorators........no customers. This is actually, the "D" word.

Thank God it seems to be changing now.

This has been the most upsetting and emotionally difficult time for me since the "Aids epidemic"! We lost thousands of talented people.........literally thousands......to this scourge. Male decorators I knew and LOVED would see me and say; "You female heterosexuals" are going to have the whole "game to yourselves"! Thank god that did not happen....

But the brilliant ones we lost.
Now it is the "houses" Scalamandre (which is coming back with a "boom!" and others. But many of my beloved stores and shops could not hang on.
Great post.....I love your blog....

btw; if you are going to "invest in a sofa" You picked a perfect one. Silk velvet.....antique textile pillows.........WOW!! What an eye you have!!!!

Things seem to be turning around.....keep praying!

My dear friend Hutton says.....he prays every night:

"People with taste get money; and people with money get taste!"

Doesn't happen often!

Love your blog...please don't stop!!!

Sarah H. said...

Whoa. This is depressing. And "above average" seems like a huge understatement in this case. In Colorado, where I live, the salaries and cost of living are admittedly lower than in some parts of the country, but still...among the well-educated, professional 30-somethings I know, jobs that pay well enough to generate this kind of savings in that amount of time are pretty much a fairytale.

I'm 31, husband is 33. 20k in savings, another 30k in home equity. Some student loan debt. Apparently we are way below average, and we suck.

Anonymous said...

The grown-up equivalent of waking up on finals day and realizing we haven't studied. This is one of those posts that we read and feel chills shooting down our spines realizing we'll never get to retire and -what?- buy those perfect linen shirt and trousers, repair to our exclusive island paradise and canoe on placid waters at dusk with our amazingly good-looking mates. Every time we see that financial planning commercial, we figure we'll get to it someday and quickly change the channel.

And then we read the comments and take some kind of odd comfort -such as it is- in the fact that there are responsible, well-intentioned others in the same boat. Which is to say, fucked.

Anonymous said...

I'm within the target and I am still freaked out. I am not trying to throw kerosene on the match, but I think it's really alarming how little people save, how long people wait to save, how much debt people take on (especially student debt) and how a lot of people in this country vote Republican, which is not in the best interests of people who might appreciate building a society with more of a safety net. I also read other bloggers who talk about quitting and doing "something they love". The reality is that plan rarely pays well. People waking up at 50 with only $100k should be scared. I am 35, have $535k ($100k in cash, $240 in stocks, $190k in 401K) plus a car I own outright and no debt.

Anonymous said...

My husband and I are both 42 and we are about on target. Our net worth is around $700k. The only debt we have is our mortgage, both cars are paid off. We still try to sock away money for our son's college fund. I don't work and my husband has made really good money the past 3 or so years and that is the only way we have been able to save so much.

Kerry @ Design du Monde said...

That little chart glosses over many variables. I am an artist and stay at home mom (43 yrs old)but we have no debt. None, not even a mortgage and we own our home. Our cash in per year makes it look gloomy, when in fact we are in very good shape. Charts are stupid. Get out of debt... there is no such thing as good debt any more.

Anonymous said...

"Our cash in per year makes it look gloomy, when in fact we are in very good shape"

That's why her topic is about net worth and not income.

Agree there is no good debt.

Anonymous said...

As a canadian, who loves this blog, 401k doesn't figure into our plans, we have a pension and some savings but after raising 5 children and living a good life, I've learned, life changes on a dime
live for today, yes think about what your doing and be responsible but live for today as well, life is short and planning for when your 80 well answer me this
What you thought you wanted at 20 changed when you turned 30,40,50 so how do you know what 80 will need
Balance is the key and each day ask yourself is this a temporary fix or am I spending on things that make me sing. Be Happy, simple but true

Anonymous said...

Graduated from law school a year ago with $200k in student loans and am making $45k a year. With the majority of the debt at 8.5 freaking percent interest I actually googled "what happens if you default on your student loans" and basically decided to move to a tropical country and run a B&B.

penelopebianchi said...

He! Anonymous from Canada hit the nail on the head!

Enjoy each day! Enjoy the birds, the ducks, the chickens.... Nature!

when we lived in Pasadena........at the peak of our business we sold amounts that would floor you!

I was not affected by "recessions" We moved to Santa Barbara. Not true here......and I am pretty sure not there either. This is a game-changer!

I am grateful for new business....and I do think things are turning around in the design and decorating business!

Anonymous said...

the fact is these charts are scary but when it comes to old age and pensions - that is when these charts make sense and is the scary truth...


as a couple, we are in good shape. we own our house outright which is worth 3 million dollars but the incomes are erratic - we are bit of a hippie couple so it is a hit and miss situation. while i will not scream poverty - we still have to be careful and unless we sell our house and decide to live in the boondocks then actually the net worth of the house is just a hedge against inflation. funny enough - all my friends who are considered "wealthy" also have the same issue - asset rich but cash soso...

Anonymous said...

"as a couple, we are in good shape. we own our house outright which is worth 3 million dollars but the incomes are erratic - we are bit of a hippie couple so it is a hit and miss situation."

What sort of hippie couple owns a home worth THREE MILLION DOLLARS?! Shouldn't you be in a yurt somewhere?

Anonymous said...

That post seems to exist to create misery. And perhaps as an arena of self congratulation for those aiming for the top 1%. My husband and I (both early 40s) spent most of our 20s in graduate school. We now make decent salaries, have a modest home (in a city with low housing costs), live within our means, save a good bit for retirement and for rainy days and yet we are no where near those estimates. Maybe if I squint and round down our ages, the two of us combined approach the low end for one person a bit younger than us on some of the measures....By "above average" does the Financial Samurai mean "outlier"?

Anonymous said...

Actually I can understand the million dollar house but worrying about tuition fees, most urban areas in Asia have apartments worth a million us dollars on average. No one would blink an eye plus you don't even get a pool.

We own our house but the kids tuition fees coming up fills me with dread. So while people wanting to buy in my building may have preconceptions about its residents and we don't have a old washing machine out my front door, and while I make a decent wage, the chart does not show that it still doesn't mean you would have spare income.

Gosh, can we get a happiness index chart instead! This is anxiety causing!!

Anonymous said...

Actually I can understand the million dollar house but worrying about tuition fees, most urban areas in Asia have apartments worth a million us dollars on average. No one would blink an eye plus you don't even get a pool.

We own our house but the kids tuition fees coming up fills me with dread. So while people wanting to buy in my building may have preconceptions about its residents and we don't have a old washing machine out my front door, and while I make a decent wage, the chart does not show that it still doesn't mean you would have spare income.

Gosh, can we get a happiness index chart instead! This is anxiety causing!!

Anonymous said...

Relax about that blogger's chart. He seems like an Ayn Randoid hard-on (see the post on taxing renters -- fecking moron doesn't even get that that would be a tax on landlords).

Use a retirement calculator to assess your situation; then, if you can, take steps (preferably autopilot ones) to save literally as much as you can. If you can't, take steps to slash expenses. Do it now; don't wait for your catfood years. And don't vote for assholes who don't have YOUR interests in mind wrt taxation, health care policy, etc.

Simple, really, but people get caught up in status anxiety, as when they read blog posts like the one linked to.

Anonymous said...

Enjoy each day! Enjoy the birds, the ducks, the chickens.... Nature!

Could only be said by a woman who married money.

Fenn said...

I'ma starving artist and explorer of the world. I live in NEOhio. I bounce around among awful food/retail jobs, professional nanny jobs, resort jobs, and living on my art alone. As a nanny, I could make the most, at about $12,000-$24,000 a year, but the best paying are soul-sucking and nannies are the first cut when finances change. I have never made more than $10,000.00 per year and do wonder what will ever happen to me in old age. I don't mind, though, because I have a nice car that is my back up home, just in case. NEOhio's cost of living is lower than the rest of the U.S., so it is easy to live here and be much poorer than everyone else. I am very, very happy with my free-spirit lifestyle and don't plan to ever change it.

Fenn said...

Oh, and I worked hard in my 20s (plus a small inheritance) to pay off all my debt. Excluding my student loan (which can languish in collection agency hell forever as far as I'm concerned), I'm debt free.

Anonymous said...

What bothers me about money management websites that crunch numbers like they're popcorn (from which you got the chart and ideas), somehow remain oblivious to the fact that the numbers don't add up: if someone is "above average" then they would only need to be in the upper 50% percentile of wage earners. And, as one astute commenter pointed out there is no way you could save that much on a modest/normal income. The numbers are only viable if the "above average" person is really a "very, very above average person" with wages/income in, I'd say, the top 5-10%.
So the money website writer can assert these numbers, but he/she must realize she/he is speaking to a small fraction of the population. As I say, the top 5-10% of wage earners.

To me, that rather begs the question: what about the rest of us? What does our road map to retirement look like? Who will chart the course for us? And, for crying out loud, why are we ignored? :)

Anonymous said...

husband and i both 40, at +$100K vs. the avg on the chart

Anonymous said...

This also freaks me out, and I'm within his target range. The blogger's chart just seems like a complete fabrication, not to mention unnecessarily alarmist. I find this approach more thoughtful and helpful:
http://www.thesimpledollar.com/2011/11/12/what-should-my-net-worth-be/

For the record, I'm 36. Married a few weeks ago. Prior to marriage, my net worth was $365K, with $50K in cash, $300K in retirement and investment accounts. No debt, real estate. Income is $150K. I'm a doctor, so I spent my twenties in school or in minimum-wage training. When my income jumped after residency, I continued frugal habits and lived on <30% of my income for three years to get a jump-start on the lost savings time.

My husband had success early in his career with a startup, and we now share a net worth of $7 million. I didn't know about his $ until after we had been together for several months, as he leads a very modest lifestyle. We use my salary as our guide for planning our household budget. As you can probably tell, mentally I have not adjusted to the new net worth, and I think I'm ok with that. I don't ever want to take it for granted.

Anonymous said...

god I am screwed

kate said...

I read through his blog pretty extensively and as a financial professional I can say that he makes a lot of poor assumptions/ignores tax consequences/doesn't explain things correctly. How much money you need to save (and to live on after retirement) TOTALLY varies by where you live, what sort of lifestyle you want to live (hey, some people actually don't want to travel in their retirement and would prefer to do that while there legs still work well, who would guess!) Should you spend all your money on Hermes bags and trips to Aruba? No, but life also needs to have some enjoyment, otherwise it's not worth living. Also, if everyone followed this guy's advice, we'd be thrown into another recession...people need to spend some money to drive the economy!

by the by, this guy reminds me of something my mom said about a family friend..."he'll be a rich man but his kids will hate him"

Anonymous said...

Yikes. I'm not planning to have kids, so I feel that will put me at an advantage at some point.

Financial Samurai said...

Good to see there's such a robust discussion.

The stats are based on my research and surveys that I've received from my blog.

Just run the numbers and see if they work for you.

I've explained what "above average" means in my post.

Thanks,

Sam

Anonymous said...

35 year old stay at home mom. Left my job when I had my little one (wasn't happy at my old place of employment), planned to take a year off and then return to work elsewhere. Have been looking for work for the last two years. Had some contact work but <10K annual income from that. Family of three lives on husband's 80K salary. We have a mortgage and I have student loans. We live in MA where cost of living is high. I think many of our friends/ young families with 1 or 2 kids and a condo/house live on combined annual income of ~$100K. I feel like we are doing ok, we watch what we spend and don't think about retirement.

Anonymous said...

The fact that table starts off with "zero" debt at 22 years old invalidates it to a great degree, and assumes an endangered cultural/ethnic status or wealthy parents (the only way to be interesting enough for a full ride anymore almost precludes having high school employment).

That said, I've contributed IRS maximums, make above the median and save, too. This chart involves both a lot of stars aligning and unrealistic grit.