# Reasonable Net Worth at Early 30s



## kac147 (Jan 12, 2018)

Although everyone has different life style and needs, I would like to know what the reasonable net worth for a person at early 30s on average would be?


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## Woz (Sep 5, 2013)

Not a perfect answer, but 2016 Statscan data has average net worth for families under 35 as $179,300 and the median $35,200. For families 35-44 it's $471,300 and $219,600 respectively.

Millionaire Next Door also had a formula some like to use, also not perfect though. If you're networth is 10% * Age * Income then your an average accumulator of wealth. If your twice that then your a prodigious accumulator of wealth. If you're half that your an under accumulator of wealth.


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## My Own Advisor (Sep 24, 2012)

Hard to say what reasonable is. Comparisons are OK to a point but I think folks are better off defining their own goals...and working towards those.
https://www.myownadvisor.ca/throwing-retirement-savings-factors-window/


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## cainvest (May 1, 2013)

I agree with MOA, people really need to define these numbers for themselves based on needs and wants for the present and future.


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## Daniel A. (Mar 20, 2011)

You know there was a time when people finished high school went out and got an average job followed by marriage & kids bought a house and just worked. The idea of net worth had little meaning they were to busy living life.
Eventually once the kids were grown people started thinking about future retirement and net worth. 

I know things are much different today.


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## james4beach (Nov 15, 2012)

kac147 said:


> Although everyone has different life style and needs, I would like to know what the reasonable net worth for a person at early 30s on average would be?


Here's the stats can data:
http://www.statcan.gc.ca/daily-quotidien/171207/t001b-eng.htm

Families under 35 have median net worth $35,200
Families 35 to 44 have median net worth $219,600

When they say "under 35" that involves many younger people, with the 35 year olds being the highest numbers of that group. So if you're interested in the median for a 35 year old, my guess is the number is *somewhere between 50K to 100K*. And that's for family groups.

So my rough guess, for a 35 year old, is that the median family net worth is around 50K to 100K, and a single person's net worth will be lower. Just cutting in half, we could assume the single 35 year old median net worth is more like 25K to 50K.


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## OnlyMyOpinion (Sep 1, 2013)

A MoneySense article based on older data (Statscan 2012) that has some interesting tables and graphs addressing income and wealth.
http://www.moneysense.ca/save/financial-planning/the-all-canadian-wealth-test-2015-charts/

Avg Net Worth:







_Families can build wealth faster than individuals because they’re able to pool their resources... between ages 55 and 65 families are worth, on average, a whopping $670,000 more than unattached individuals in the same age group._

I agree that during our life it was more head down *** up. In our ignorance, I don't think we started thinking about adding it up until we were in our 50's.

And as others have said, it depends entirely on your life's trajectory - when you started saving, how much you save, who paid for your education, the type of RE you bought/or not, etc.


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## james4beach (Nov 15, 2012)

In OnlyMyOpinion's graphs, note that this graph is showing average net worth rather than median. It's probably better to look at median, since a few very high net worth families (e.g. rich families and inheritances) will skew the average pretty badly.


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## Freedomeer (Jan 3, 2018)

I feel like Net worth is too arbitrary of a number to shoot for. I feel investable assets would be a better number to go after.

For example, my sister owns a condo in Victoria that they bought for 375k. It was just reappraised at 650k. That net worth gain of 275k is not going to affect their lifestyle unless they decide to move to a cheaper city, which they will not.

On the other hand, my wife and I have been focusing on investable assets, because the goal is financial freedom. Which the Smith Maneuver, a good savings rate, and good income, we have gathered 400k in a portfolio at the age of almost 32, with the goal for enough income at 40. Our portfolio generates income/growth that it actually would affect our lifestyle if we wanted it to.

So it all depends where the numbers come from. 

In my opinion, people always put cars in their NW statement. I feel like a car is just a liability and counts as zero towards your NW. Even a home really is just a liability as well. I have an older home and have been spending about 5k a year on maintenance getting the bones in good shape. I don't feel like a home makes me richer...

Just my two cents.


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## kac147 (Jan 12, 2018)

OnlyMyOpinion said:


> A MoneySense article based on older data (Statscan 2012) that has some interesting tables and graphs addressing income and wealth.
> http://www.moneysense.ca/save/financial-planning/the-all-canadian-wealth-test-2015-charts/
> 
> Avg Net Worth:
> ...


These charts look interesting. I have to work harder keeping up with the average especially I am living in Edmonton.


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## ian (Jun 18, 2016)

I believe that the focus should be on where you end up, not where you start. Your later career years are typically the most lucrative. Certainly was in our case. I would say career, business acumen, investment acumen are greater indicators of where you may end up at from a net worth perspective.


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## james4beach (Nov 15, 2012)

kac147 said:


> These charts look interesting. I have to work harder keeping up with the average especially I am living in Edmonton.


I think median is a better figure to compare to. When they say average, it includes some of these families worth 10 million or 100 million. That throws off the average dramatically. Net worth is a kind of measure that is heavily skewed by the outliers, and the median is the way to cut out that effect.

If you look at median for our age group, we're talking more like 50K to 100K.


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## peterk (May 16, 2010)

Daniel A. said:


> You know there was a time when people finished high school went out and got an average job followed by marriage & kids bought a house and just worked. The idea of net worth had little meaning they were to busy living life.
> Eventually once the kids were grown people started thinking about future retirement and net worth.
> 
> I know things are much different today.


That sounds nice and simpler. Probably because people were just plowing excess money into the mortgage and not really thinking about anything else money wise? You didn't have the easy access stock market and rampant bank advertising either, I'd imagine.

I think by 30 if you have your student loans paid off, a car paid off, and a small amount of savings, you're doing fine. Any more is just gravy. More importantly, by 30 you should be well on your well to developing an expertise in some skill/profession, and zeroing in on that specialty so that before 40 you are at the top of the field.


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## Daniel A. (Mar 20, 2011)

Very true peterk.


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## doctrine (Sep 30, 2011)

$50-100k may be average for mid 30s, but amongst those working full time since university, it is probably a little low of an estimate, even with a family. You could be working for 12-13 years full time, even 5-6 years in fields that require more study. Just my opinion. Probably $200-250k is more typical, if only in home equity. That is still net worth though. The formula quoted above would give an average networth of $350k for a 35 yr old making $100k/yr, which is pretty close to the chart as well (200k-400k). Based on the 35-40 year olds that I know, that would be consistent numbers.


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## tdiddy (Jan 7, 2015)

Interesting how spread between median and mean is pretty significant. How many people have inheritances in their early 30s? I wonder if negative net worth was included? If not average would be artificially high. Aren't parents typically still alive at this point? I can see parents putting in down-payment for house being something that would bring up average though i suppose these days. 

Everyone's needs and situation is different, so I can see acceptable variation in net worth early 30s (mine was negative at age 30) but by mid 30s I would think 50-100K is low and would mean that you expect to have some catching up to do late career (which may be totally 'reasonable' depending on your profession/personal circumstances)


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## james4beach (Nov 15, 2012)

tdiddy said:


> Everyone's needs and situation is different, so I can see acceptable variation in net worth early 30s (mine was negative at age 30) but by mid 30s I would think 50-100K is low and would mean that you expect to have some catching up to do late career (which may be totally 'reasonable' depending on your profession/personal circumstances)


But look at the Statscan data, it may seem low but that's what median net worth is in this country (approx). It's nowhere near 200K for example. For early 30s, the median is maybe somewhere in the 100K realm -- and that's for a family. Again, for singles, the number is much lower. And there are many single 30 year olds, because households and families are being formed much later than past generations.

I think this is part of the disconnect between baby boomers and the current younger generations. Boomers are thinking back to their days and thinking how well off they were, even early in their careers, and assuming young people today are doing similarly well. But the same is not true for people in their 20s or 30s today, even after many years in our professions. Cost of living has simply gotten too high and high savings rates are not easy to attain, like they were decades ago.

On top of that, we have no job security and no pensions. IMO our generation will never attain the kind of wealth the baby boomers had.


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## tdiddy (Jan 7, 2015)

james4beach said:


> But look at the Statscan data, it may seem low but that's what median net worth is in this country (approx). It's nowhere near 200K for example. For early 30s, the median is maybe somewhere in the 100K realm -- and that's for a family. Again, for singles, the number is much lower. And there are many single 30 year olds, because households and families are being formed much later than past generations.
> 
> I think this is part of the disconnect between baby boomers and the current younger generations. Boomers are thinking back to their days and thinking how well off they were, even early in their careers, and assuming young people today are doing similarly well. But the same is not true for people in their 20s or 30s today, even after many years in our professions. Cost of living has simply gotten too high and high savings rates are not easy to attain, like they were decades ago.
> 
> On top of that, we have no job security and no pensions. IMO our generation will never attain the kind of wealth the baby boomers had.


I agree with you on most points here, it has to be pointed out that the 2nd and 4th most common occupations for females presently (nurse, teacher) have strong job security and pensions but I think your overall sentiment is correct. 

I'm not saying that 50-100K is isn't a typical situation for someone at 35 presently. I'm just saying I don't think its a reasonable net worth to be on track for a financially independent retirement unless you are in a profession with a back loaded salary situation. Lose that early compounding ability. That may mean that a lot of our generation is going to be in trouble come retirement age...


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## OnlyMyOpinion (Sep 1, 2013)

james4beach said:


> ... I think this is part of the disconnect between baby boomers and the current younger generations. Boomers are thinking back to their days and thinking how well off they were, even early in their careers, and assuming young people today are doing similarly well. But the same is not true for people in their 20s or 30s today, even after many years in our professions. Cost of living has simply gotten too high and high savings rates are not easy to attain, like they were decades ago.
> On top of that, we have no job security and no pensions. IMO our generation will never attain the kind of wealth the baby boomers had.


A 55-64yr median net worth is $669k, and a 35-44yr is $220k (your link, statscan 2016). A big chunk of the 55-64yr nw will be tied up in a house while the opposite is true for a 35-44yr. Lower by 2/3, but they still have 20yrs left to save and invest. A senior family (household) is $763k. A lot less than I might have guessed given all the reports of wealthy boomers that we read and hear about. range:


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## cainvest (May 1, 2013)

OnlyMyOpinion said:


> A senior family (household) is $763k. A lot less than I might have guessed given all the reports of wealthy boomers that we read and hear about. range:


Do you think those stats include company pensions?


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## james4beach (Nov 15, 2012)

That's a good question about pensions. If you look at money diaries on this site for example, you'll see that often people list massive DB pension assets (into the millions of $) but omit them from their NW.

Here's an example in our money diary section. This person describes their net worth as 2M but they also have another 1M as present-day-value of DB pensions. If comparing to other people, it's probably more fair to say this person's net worth is 3M.

So the question is whether Statscan tabulates net worth the way people do in our money diaries, omitting massive DB pensions, or do they convert all pensions to present day lump sum value?


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## nathan79 (Feb 21, 2011)

100K sounds good, that's about where I was at 30. I'd say as long as you have a positive net worth by 30, you can easily accumulate a lot over the next 10-20 years.


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## Daniel A. (Mar 20, 2011)

james4beach said:


> That's a good question about pensions. If you look at money diaries on this site for example, you'll see that often people list massive DB pension assets (into the millions of $) but omit them from their NW.
> 
> Here's an example in our money diary section. This person describes their net worth as 2M but they also have another 1M as present-day-value of DB pensions. If comparing to other people, it's probably more fair to say this person's net worth is 3M.
> 
> So the question is whether Statscan tabulates net worth the way people do in our money diaries, omitting massive DB pensions, or do they convert all pensions to present day lump sum value?


I'm sure they don't include pension value, 65% of people don't have DB pensions and some of the ones that do could be in trouble down the road.Outside of government very few companies offer DB pensions anymore. Most boomers don't have such a pension I'll have to read some of those massive DB pension assets in money diary. DB pensions are very difficult to value including mine. I would bet if your not in the top 10% income group Revenue Canada stats its a good bet the money is not there in pension. When I worked my household income was always in the 10% our household income in retirement is much better than most of the people I know. What is driving all this value is real-estate value and again yes I know several people counting on the value for their retirement. Toronto or Vancouver most people would never have believed 10 years ago that their homes would be worth what they are.


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## My Own Advisor (Sep 24, 2012)

Agreed Daniel. There is no way people in TO or VAN could have predicted their home (which was expensive 10 years ago at say $750,000 or so) would now be worth $2 or $3 million. Simply nuts.

If I lived in TO or VAN I would have cashed out and moved. I could always afford to go back and visit for a few weeks every year using Airbnb. Having a couple million in the bank is cash for life and then some. To each their own who live in those cities.

Back to the point of this thread, I believe if you're in your early 30s and have some TFSA assets, maybe started growing your RRSPs assets, *and your net worth is positive* after killing your student debt with a good degree in hand I suspect you're doing better than most.


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## kac147 (Jan 12, 2018)

I am wondering how you guys calculate your net worth? 

I know for an accounting standpoint, it uses the purchase values. However, you will not see the return/loss until you sell the assets.

Do you use the market values of your assets (houses, stocks, etc.) or do you use the purchase values?


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## cainvest (May 1, 2013)

Daniel A. said:


> I'm sure they don't include pension value, 65% of people don't have DB pensions and some of the ones that do could be in trouble down the road.


If 35% have pensions that are not reported in the stats it would change the values quite a bit.


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## cainvest (May 1, 2013)

kac147 said:


> I am wondering how you guys calculate your net worth?
> 
> I know for an accounting standpoint, it uses the purchase values. However, you will not see the return/loss until you sell the assets.
> 
> Do you use the market values of your assets (houses, stocks, etc.) or do you use the purchase values?


Current market value.


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## Daniel A. (Mar 20, 2011)

cainvest said:


> If 35% have pensions that are not reported in the stats it would change the values quite a bit.



Yes it would including mine as I said there is no easy way to value a DB pension. A DC on the other hand is very straight forward as are RRSP's .
Hard to include the value of pensions considering all the special rules around them.
One friend of mine same age has a home worth 800,000.00 plus he never saved for retirement at sixty he put in for CPP 400.00 a month no other pension to speak of next year at sixty five he will put in for OAS about 600.00 per month then his plan is to apply for GIS then sell his house.It bothers me that someone with high assets can do nothing about retirement saving then go to the public trough GIS for money. There are a lot of very well off people that will be collecting GIS because the government say's its not a form of welfare.


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## Eclectic12 (Oct 20, 2010)

cainvest said:


> If 35% have pensions that are not reported in the stats it would change the values quite a bit.


Depends on whose stats ... from what I recall of looking at StatCan's numbers, there was a line item for pensions.


Cheers


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## cainvest (May 1, 2013)

Daniel A. said:


> There are a lot of very well off people that will be collecting GIS because the government say's its not a form of welfare.


A net worth limit would put a stop to that, if they would ever impose one. Maybe they'll think about it in a few years when TFSA accounts become sizable enough for retirement.


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## james4beach (Nov 15, 2012)

From reading the money diaries on this forum over the years, one thing I've noticed is that the people who seem comfortable and well off tend to have DB pensions. Go and see for yourself.

One way to look at it is total compensation. The pension is part of one's total pay, so someone receiving a 100K paycheque plus a significant DB pension, might in fact have effective pay of 150K. This is the case with friends of mine who work at places like MB Hydro. They keep complaining to me that their salaries are low (e.g. they make 90K whereas I make 110K in private industry) but once their pension is taken into account, they are getting paid _much more_ than I am.


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## marina628 (Dec 14, 2010)

I know 30 year olds still paying student loans so I think if you are debt free and have a few months living expenses you are doing well at 30 these days.


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## My Own Advisor (Sep 24, 2012)

kac147 said:


> I am wondering how you guys calculate your net worth?
> 
> I know for an accounting standpoint, it uses the purchase values. However, you will not see the return/loss until you sell the assets.
> 
> Do you use the market values of your assets (houses, stocks, etc.) or do you use the purchase values?


Current market value with assets over liabilities. I include house, yes, but not banking on it for a retirement plan. I have to live somewhere.


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## My Own Advisor (Sep 24, 2012)

marina628 said:


> I know 30 year olds still paying student loans so I think if you are debt free and have a few months living expenses you are doing well at 30 these days.


Same. I think anyone 30-35 who has positive net worth is doing well on the grand scale.


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## OnlyMyOpinion (Sep 1, 2013)

As to whether Statscan analyses incude pension value in net wealth - the answer would appear to be yes:

*Assets*_: Real estate (principal residence and all other real estate), *employer pension plans (on a termination basis)* and all other assets (including RRSPs, RESPs, RRIFs, stocks, bonds, mutual funds, vehicles, household possessions, bank accounts, collectibles, accumulated value of family businesses, and other financial and non-financial assets).
*Debt*: Mortgage debt on the principal residence and all other real estate (Canadian and foreign), and consumer debt. Consumer debt includes debt outstanding on credit cards, personal and home equity lines of credit, and secured and unsecured loans from banks and other institutions including vehicle loans, and other unpaid bills.
*Wealth (or net worth)*: Total value of assets, minus the total value of debt._

https://www.statcan.gc.ca/pub/75-006-x/2015001/article/14194/source-eng.htm


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