What Should Your Net Worth Be By Age?


What should your net worth be by age XX? It’s a good question.

What should your net worth be by age 20 or 30 or 40 and so on, is probably one of the most common inquiries I get, but I’m always hesitant to answer. Mainly because there really is no good answer. A lot of the targets are arbitrary, no matter who makes them, including the ones in this post.

There really is no right number to set as your net worth target. Personal finance is personal, and this is one of the most personal numbers of all.

How to calculate your net worth

Calculating your net worth is simpler than you think. All you need to do is subtract what you owe from what you have, and the number left over is your net worth.

Assets – Liabilities = Net Worth

To determine what you owe, add up all your debts: mortgage, car loan, student loans, credit cards, and so on. If you’re not sure what debt you have (hey, it happens!) one of the easiest ways to find out is to get your credit report.

Your credit report will list all your balances owing, as well as your minimum payments and whether the accounts are in good standing.

To determine what you have, add up all your assets: home, car, investments, cash savings, and so on. Sometimes assets are a little trickier to value than debts, because people have a tendency to overvalue things like their car or jewelry.

If you want to err on the safe side, underestimate the value of any non-cash assets or have them professionally appraised.

What should your net worth be by age?

What will be “enough” depends on you and factors you don’t know yet. Some people cannot live on less than $100,000 per year, others struggle to spend as much as $25,000. These people do not need the same net worth at every age milestone.

How to grow your net worth:

  • Earn high interest on your savings with EQ Bank
  • Start investing the stock market by opening an account with as little as $100 with Wealthsimple 
  • Get your spending under control with KOHO

Knowing how much wealth you personally need to accumulate in order to live comfortably is far more important than knowing what everyone else has. For that reason, I would encourage you to think up a number that feels good to you. Then work backward.

Do you want to be a millionaire? When? Pick an age, and then work out the steps to get there. The goals you set don’t need to be set in stone, and more likely than not, they will change as the decades pass. It’s okay, even preferable, to be flexible with your finances.

Nevertheless, I hammered out some targets if you do want a rough guideline to go by. Enjoy!

Net Worth at Age 30: $0 to $50,000+

The net worth number you end up with by age 30 is going to be almost wholly dependent on how much financial privilege you enjoyed in your 20’s. That is the awful truth.

I want to tell you the end result will be a product of your own ambition and fiscal responsibility, but in reality, the biggest determinant of whether or not you finish the decade in the black will be how much money your parents donated to your cause.

The second biggest determinant will be how much you earn.

Depending on how long you went to school and what you studied, your student loan debt load, job prospects, and work experience, what you earn can vary tremendously.

Some people graduate at 22 and go right into the workforce, others pursue professional or graduate studies and don’t wrap up their schooling until their late 20’s (or later). Some jobs start at $40,000 per year, others start at $100,000.

How much you’re paid determines how quickly you can pay off your debts and build up your savings, and therefore, what your net worth is.

The most important thing about your net worth in your 20’s is just that you start building it.

Make a dedicated effort to pay down your debts and save and invest what you can. What should your net worth be by age 30? 

Your main goal in your 20’s is just getting your net worth to a positive number. 

This is purely a matter of aggressively paying down debt and accumulating assets. Here are some ways to start off on the right foot:

  • Earn 1.25% on your savings with EQ Bank
  • Start investing the stock market by opening an account with as little as $100 with Wealthsimple 
  • Get your spending under control with Koho

If this is easy for you or you hit it on early in your career, it’s time to focus on building real wealth. An excellent starting point or target number is to have a net worth of $50,000 or greater by age 30.

It’s not essential that you hit this target to enjoy long-term financial security, but if you do, you’ll enjoy it a lot sooner.

Net Worth at Age 40: $150,000 to $250,000+

Once out of your twenties, how well you do net worth wise will have more to do with your choices rather than your circumstances.

Your 30’s will likely be one of the most financially demanding decades of your life, particularly if you decide to have a family. Nevertheless, you should have paid off all or most of your debt from your 20’s, enjoy greater job security, as well as a higher salary in your career.

Unfortunately, most people make the mistake of using the extra wiggle room in their budget to spend on shinier consumer goods. This leaves them financially more or less the same as they were as a college student, except with a BMW in the garage so they feel like they’re doing better. They’re not.

The most important thing about your net worth in your 30’s is not to sabotage it with aspirational spending.

What should your net worth be by age 40? You should be able to finish your thirties with a healthy six-figure balance on your net worth sheet. It’s not unreasonable to have hit your first quarter-million milestone, or even surpass it.

You should be completely debt-free (except for a mortgage, if you have one) and your entire surplus of cash should be going towards building wealth for you and your family. It’s okay to buy a few nice things, but not so many that you end up with more stuff and money.

Net Worth at Age 50: $500,000 to $750,000+

By age 50, barring any catastrophic financial setbacks, you should have amassed a significant amount of wealth by the time you blow out the candles on your 50th birthday cake (will you dare to have 50 candles? It’s a bit of a fire hazard).

What should your net worth be by age 50? Many people dream of early retirement in their 50’s. If your one of those people, your numbers should be a lot higher.

If you’re of the other camp that plans to work through your 60’s and 70’s and beyond (because technological advances will give us 200-year lifespans for sure), you can worry less, but your focus should still be on growing your nest egg. With university-aged children, it might be harder than you think, particularly if they refuse to move out.

Net Worth at Age 60: $1 million+

What should your net worth be by age 60? You should be a millionaire by your 60th birthday. I would even argue that you have to in order to enjoy any kind of long-term financial security. Unfortunately, most people hit their 60’s and are horrified to realize they no longer have time to catch up on their finances.

Many are still lugging around massive mortgage balances, and are buried in consumer debt. It’s baffling to me that you can be so old and so stupid. You’d think you would know how to manage your finances after a good 40 years of personal budgeting but it turns out people can never really shake the desire to buy crap they can’t actually afford.

Lucky for you, if you start now, it’s easier to hit a seven-figure net worth than you might think.

If you can contribute $10,000 per year to your assets starting at age 25, you’ll have just shy of $1 million at age 60 assuming an average rate of return of 5%.

If you stick to this and retire at the traditional age of 65, you’ll do so with a net worth of $1.2 million.

what should your net worth be by age

Of course, this represents just one route to this wealth. You can have a net worth of $0 at age 30, but you manage to increase it by $10,000 per year for that decade, then commit to bumping up your contributions by $5,000 per year in each decade thereafter (which is absolutely manageable), you’ll end up at roughly the same end:

what should your net worth be by age 2

Some final thoughts…

One of the most important things to remember is net worth does not equal cash on hand. I’m a big fan of maintaining the bulk of your wealth in liquid financial assets like cash and stocks.

Cash, particularly cash that will generate passive income through interest and dividends, is far superior to tying your wealth up in a less liquid, income-draining asset, such as a house.

I am not a fan of people who boast $300,000+ net worth numbers just because their house has increased 17% since they bought it 2 years ago, meanwhile, they have only $2,000 saved in their retirement accounts. This is why the above calculations might seem lower than what you would expect: they’re essentially done with cash in mind, not your primary residence rapidly increasing in value.

The numbers I’ve included in this post are fairly modest. It’s fairly easy to increase your net worth by $10,000+ per year. Ideally, you should be increasing your net worth by $25,000 or more each year. However, whether or not this is possible for you depends on your income and expenses. It’s not for everyone, nor should it be.

So what should your net worth be by age? It depends.

The most important thing about your net worth is that it’s increasing year over year, and moving towards your personal financial goals. The purpose of your money is to deliver you the life you want, not merely to exist on your balance sheet.

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95 Comments. Leave new

  • I appreciate the fact that you mentioned the $300k net worth because of vacation house just because their equity increased by 17% I like to invest in things that pay me money in the short and long term to own them. Employment income, passive income, dividend income etc. I am not against home ownership. I just think people place way too much of their net worth on one asset. The house.

    • Amen. So many people are “house rich” and cash poor, and it’s a terrible financial position to be in.

      • The average Toronto house value increases $500 a day. How many people earn this amount, not many. If at any time a homeowner finds themself ”cash poor“ and needs to sell, whatever age they may be, their net worth will be more than those of a non-homeowner. Real estate is the best investment possible, yielding the highest rate of return. The terrible financial position is wasting money on rent.

        • So are you going to sell your house and buy the one next door that costs the same amount and be in the hole after realator fees? Then live on the bus bench out front?

          • I don’t think you understoon the previous reply. I think it should of added real estate is the best “long” term investment. They never mentioned to try to flip just to avoid paying rent. I would know as a landlord of multiple properties… the rate of return is unbeatable!!

  • I think it’s really important for people to know their net worth but not important for them to compare it to others. We all have different situations, one finance blogger has millions invested which would make me financially independent 3 times over, but for him he needs more to live. It’s import is different for all of us.

  • These are great guidelines to follow. I like how you used a modest 5% rate or return in your examples. I don’t know if the net worth values suggested in the post include pensions or not, but how would a defined benefit, defined contribution, or CPP+OAS benefits at retirement affect someone’s personal savings expectations? 🙂

    • Oh yah, if you have a pension you can definitely slack on the retirement savings… but I still think a healthy net worth is a worthy goal, regardless of what might be coming to you later!

    • One way to value a defined benefit plan would be to figure out how much cash would be needed to generate that amount under the 4% rule (so a 40k retirement could be roughly calculated as being worth 1million in net worth). There is some flux there but it would give you a reasonable swag (and of course the downside is that your inheritors get nothing when you die vs passing on an asset that cash and investments would offer).

  • How drastically do these numbers change if you remove your primary residence from the Net Worth Targets? Just seems like it may be better to exclude them entirely versus adding an asterisk to the volatile fluctuations in property value in the short-term.

    • In the post I said the calculations are done with cash in mind, not your primary residence.

      I am so disenchanted with the home ownership dream. I certainly do not include it in my calculations.

      • I think it’s important not to downplay home ownership’s role in helping build wealth. For many reasons cited in many studies, it is still one of the biggest factors in wealth accumulation. I DO agree that it should not be the sum total of one’s net worth, but I hope people reading this do not feel that it is any less important in building wealth than other means.

  • Great guide Bridget! I was fortunate to enjoy some privilege (I feel guilt admitting that), but I also take pride in my independence and making saving a priority with no input from anyone else. While I’m not entering my 30s at $0, I’m certainly not yet at $50K either, but can definitely get to the $10K annual savings goal moving forward (hopefully more!). No, we shouldn’t compare ourselves to others, but we SHOULD see how we fit into the numbers above, and then make a plan to get where we want to be. This is valuable info!

  • Interesting to see the numbers and the different scenarios. I agree with Pamela, it don’t include my owner occupied property in the net worth calculations.

  • Do these represent US dollars or Canadian dollars?

  • YES! I’m not as bad off as I thought. Thanks for the run down, I think I may have the $50,000 net worth in 2-3 years.

  • I’m not doing too bad for my age, at least my net worth is positive and it should hit 5 figures by the time I turn 25 in a few months. On track to have 50K by 30, and hopefully even more!

  • Yes, the 20’s are a hard time to give definite answers for. There are days where everything seems right on track and the next is a complete left turn. But knowing that there is a high and low number to keep in mind is the way to go. I’m one to aim for the middle and be safe rather than sorry. It looks like I’ll be on the higher end when I turn 30, but I’m not counting all my eggs right now.

  • Ah this is a nice little reminder. 🙁 As my salary has increased in my 20s I haven’t really ramped up my savings but rather just started spending more. More expensive handbags does not = wealthier. It’s hard to not follow by example sometimes.

  • I read your post on financial privilege and it didn’t strike a nerve or anything, but put in the context of net worth, I think you do people a disservice by saying financial privilege is the “biggest” determinant of your net worth by age 30, because I think that type of mindset undermines the importance of our own choices.

    I should start by saying that I’m fully aware that everything about my own experience is entirely anecdotal, but here is my situation. I came from a very middle class household. My best guess of my parents combined income is that it averaged about $60,000-$75,000 a year for a family of seven. I graduated college with about $26,000 in debt and then within 8 months of graduation took on another $9,000 through a car loan. I landed a job with a starting gross salary of about $55,000 a year, but I live in an area with a high cost of living (Washington DC).

    However, through advice from this blog (I think I started reading in 2011) as well as a number of others, I’ve made a number of choices that have made a huge difference in my bottom line. I paid off all of my loans in about 2 1/2 years, saving thousands of dollars on interest. My partner and I have lived with a third roommate for the past four years, which has probably saved us about $4,000 a year in rent. I still drive the car for which I took out the aforementioned loan, and we share the one vehicle. And thanks to the advice of this blog, I’ve been aggressive about negotiating for raises from my company. By 30 I’m hoping to have a net worth a little under $150,000.

    So yes, on a societal level, inherited wealth and privilege are important indicators of your ability to grow your wealth. But on a personal level, your decisions can have a very large impact, and I think it’s important to keep that in mind.

    • A disservice? She is absolutely correct. My partner and I went through the same program in undergrad and the only financial difference was that my parents paid for my undergrad and his didn’t. (We both got the exact same job after.) His student loan balance may not have looked that large compared to his starting salary, but the damage was already done at that point. I graduated with $X in cash and he graduated with about $X in student loan debt and $0 in cash. We’re both savers. We both work hard. That sole difference was our differences in financial privilege. I would estimate that our net worth differences at 30 will be over half a million dollars. We have the same savings rates. We both dislike debt. But I had far more financial privilege than him. That one “little” decision of my parents paying for my college education compounded hugely for me.

      Despite having student loan debt, he will still have a great net worth at 30 because he has had the financial privilege of having a six figure plus job since he graduated from undergrad.

      You’re right in that financial privilege isn’t everything. It’s also the decisions you make. Not everyone whose parents pay for undergrad come out with assets – that was from a series of decisions that I made. Not everyone with the financial privilege of high paying jobs will accumulate a high net worth at 30 – you have to choose to do that, choose to save your income. But financial privilege gives you those choices.

  • I struggle with including my house within my net worth for the exact reasons that you mention. We have diversified our investments so we have about an equal split between money sitting in investments (love those dividends) as we do in home equity. Living just north of Toronto I see the pressure to purchase and the lack of options as well as the crazy returns people are getting. It just doesn’t make a ton of sense to include it because until you sell the money is not really yours. At the same time we are aggressively paying off the house trying to get mortgage free so that has to count for something. It isn’t as if people exclude increases in value of their stocks as part of their net worth; even if it is large. To me what is more important is to just save regularly and make sure you have more at the end of the year then when you started. These guidelines are great – thanks for sharing.

    • Exactly! And even if you sell, usually you roll any profit into a bigger house, so you’re not actually any better off! It’s just a hamster wheel of big debt and paper profits.

      Glad you enjoyed the post!

  • It’s actually crazy how simple it looks when you use spreadsheets. Obviously contributing that much each year may be overwhelming for some, but I think it’s completely attainable at most salaries. Like you mentioned, it just depends on your lifestyle. I think my greatest concerns are different than net worth, but instead cost of health in the future – like how much will I need to save for when an unexpected illness arises? Should I keep a separate emergency fund for this, and at what age? (Completely unrelated, I know – but you’re basically a genius so).

    • Get insurance.

      Saving is important, but insurance is easier. Make sure you have critical illness and disability insurance. It gives you more protection sooner than saving for the same thing will. As you age, you can revisit your insurance plans to make sure they’re delivering the level of protection you need — they’ll get more expensive, but like I said, it’s easier than saving. Later in life (and it’s hard to predict when because medicine and lifespans are changing so rapidly but it will be long after retirement) there will be a trade off where the insurance is way more expensive than savings, so you can stop paying for it and redirect your contributions to a savings account for healthcare.

  • I think that one of the challenges is where to gauge net worth for a family. My wife and I are recently married and have fully combined our finances, but its difficult to say if most financial posts are directed to one individual or to a family unit.

    Any advice?

  • You make some excellent points here I think. To me, the single biggest variable–which we all control, mostly–in retirement planning is deciding how and where one wants to live in retirement. I know a guy who retired at age 41 and lived quite happily in a Minneapolis suburb spending about $12,000 per year. He followed the “Your Money or Your Life” formula. He doesn’t need anywhere near a million bucks saved to sustain his lifestyle indefinitely. Cost of living varies hugely in different parts of the US and even more so across the globe, as of course do lifestyle choices. No plan makes sense unless it’s aimed for a well-defined goal up front. Yes?

    • At 30, I’m uninterested in retirement. I have no intention of ever “retiring”. IMO, I already live the lifestyle most people hope to secure in retirement, which is I decide what I want to do each day.

      Spending your whole life planning your retirement is a shitty way to live.

  • Since I will be turning 30 in about 10 days, I’m glad to read that my net worth is slightly above the range on this (if you don’t include the house payment)! You are right about privilege in the 20’s. I had $50k in student loans but was blessed with a high-paying job and living an ultra-frugal lifestyle allowed me to get into the positive real quick. I have put a lot of savings into the house to only owe $60k on a $200k house. I know some say I should probably invest & milk out the 3.5% interest payment, but my wife & I dislike debt with a passion. We shall see how we compare 10 years from now!

  • The amounts are WAY overstated. I make a good living, save hard, and know others like me.

    I would guess that the number of people who have a networth of $1 million at age 60 is less than 5%

    • They’re not overstated. This is not a post about what the averages ARE, it’s what you SHOULD have.

      • Can’t be done by the average person .

        • That’s because the average person takes 10+ years to pay off their student loans, finances every car they own, does not start saving for retirement in their 20’s, and uses credit to buy things they can’t afford.

          The average person is terrible with money. Don’t be average.

        • Wrong. I started saving in my 20’s on an average salary. My spouse & I have driven used cars for 20 years of marriage. We purchased a house so that one salary could pay the mortgage in case one of us got lay off. We’re now 55 & 64 and have a net work over $2,000,000 not including our house. It can be done with an average salary. It just takes PLANNING, living below your means, paying yourself first, purchasing no load index funds, and going to the library to read up on personal finance.

          • Did your parents give you money?

            Did you get divorced? Because divorce is %50% of the people today, a divorced person is “average” No one who divorced can do what you have achieved.

            Did you have kids? The average post-secondary graduate who divorced and raised kids can accomplish this.

            Did you assist your kids in college?

            Tell us more.

          • Did you have kids?

            Were you given money? Inheritance?

    • These amounts aren’t overstated, in fact if you life in a higher cost city and/or want to spend a bit more in retirement then they’d be understated.

      Top 5% have much more money than $1 million by 60…

      All the best,
      Happy Henry

      • http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil105a-eng.htm

        These stats show over 50% of Canadians who work make between 25,000 and 35,000 per year. To reach the articles stated net worths is impossible.

        • Again, these are not for the “average” Canadian. They are for Canadians with Bachelors degrees or higher.

          $110,000 income after 25 years in the workforce isn’t very good. I was making more than that by age 29 (at which time I had only 3 years of professional work experience)

          • Did you make more than $100k/year on your own at 29 or is that your household income? If it’s your sole earnings, you’re doing better than most people. I’m very happy for you.

            If you plan on having two children, expect to add $500k in expenses as the average cost per child is $250k.

            I agree that a lot of cash should be liquid but one can also invest in a house and make great returns. The power of leverage allows an owner to generates tons of money off a small investment (i.e. the down payment). On top of that, if the property is rented, the owner is earning cash on top of leveraged home appreciation which is a two-for-one benefit that converts into tons of money when all is said and done.

            Many people are not retiring right now because their investments didn’t perform as expected. Real estate is the safest place to park money. Consider why banks lend on real estate but won’t lend you money to buy the equivalent amount of stocks. Too risky.

      • Show me the stats Herny. I don’t know ANYONE like that.

    • I 100% agree with you. It’s good to have goals, but we are all being lied to about invest, invest invest. Other people get rich off your investing. Your broker or the brokerage firm. I can remember hearing that if you invest $100 a month since age 18, that by 60 years old you should have around $750,000 to 1,000,000. I did this for a while until I woke up and realized the numbers don’t add up. Even at a 18% return it doesn’t add up. I’m age 40 now, so I’m sure they increased the number to around 400 a month. If you want to retire with a million dollars, you better put aside one million. IMHO

  • WOW! Read a lot of finance articles as I’m a PF blogger myself but this is no question top 5 ever written. Each quote sums up each decade perfectly…20 somethings just need to start, so many go through it buying dumb shit and not saving a thing (usually to impress people)….those numbers are impressive w/only 5% growth which is easily attainable over the long run un-sexy reliable Vanguard index funds.

    Also love the honesty especially this quote ” It’s baffling to me that you can be so old and so stupid. You’d think you would know how to manage your finances after a good 40 years of personal budgeting, but turns out people can never really shake the desire to buy crap they can’t actually afford.”

    Overall incredible article and look forward to reading more!

  • I’m 32, and that means I’ll only live until 144 and not 200. A million by 60 would make me really set by 120.

  • Great article!

    At 56 I’m doing pretty good I guess. There’s a major difference if I pull the two houses and land out of the picture, but we’ve still got a good net worth if we look at the cash equities only. Personally, I’d like my net worth to be more cash weighted, but I’m looking to figure that out, even in early retirement. I’m not against working, just not working for somebody else and their schedule.

    Keep the good stuff coming!

  • Thank god! I thought it was going to say I needed to have $150,000 net worth by 30 or something. 😉 We’re on our way to building actual net worth by the time I’m 30. It takes a lot of drastic steps, especially if you have student loans or a mortgage, but it’s doable. I should be able to retire by the time I’m 35. 🙂

  • Carl, WRONG. very inspiring. However, not doable for the average person.
    Did you inherit money? Did you have kids? What was your average income.? For those of you who like to actually crunch numbers, do the math.

    If you saved $400 per month from age 20 to age 55 at a 5% return you would end up with 576, 473

    Now, you may say “$400 isn’t much” but remember this includes your 20’s. How many young people, starting out with kids can save $400 per month?

    Nope. You were given money or a big helping hand, had a much larger than average income, or had no kids. Your circumstances are certainly not average.

    50% of married couples divorce. So that makes a divorced person “average”. No one who has been divorced will retire with these numbers.

    Articles like this crush people who can’t reach these unobtainable and unrealistic goals.

    The author even says “The net worth number you end up with by age 30 is going to be almost wholly dependent on how much financial privilege you enjoyed in your 20’s.

    That is the awful truth.

    I want to tell you the end result will be a product of your own ambition and fiscal responsibility, but in reality, the biggest determinant of whether or not you finish the decade in the black will be how much money your parents donated to your cause. The second biggest determinant will be how much you earn.

    Depending on how long you went to school and what you studied, your student loan debt load, job prospects, and work experience, what you earn can vary tremendously”

    So yeah crunch the numbers, find the truth.
    The AVERAGE person, with an AVERAGE income, who has kids, but saves hard……will be lucky to save $500,000 by age 65.

    FWIW , not many work harder, save hard than me. My income is almost double the average Canadian income. Yet I won’t reach the author’s numbers.


    • It doesn’t look like rubbish to me.

      My husband and I both put our selves through university and paid off our student loans within one year. (In the early 1980s our loans were a lot less than now but our interest rates were double digit!)

      We have mostly been a single income family (I never earned more than$6000 per year) and every year when statscan published the “average family income” numbers for our province it was as if they had just added up the total income numbers from our tax returns.

      After we paid off our student loans we started to maximize our RRSPs and save for a down payment. Son One (of two) arrived a year and a half before we moved in our first and only house. Despite maximizing our RRSPs we managed to be mortgage free 8 years after that.

      I recently calculated that our average annual savings rate between mortgage free and early retirement was 38%. (We rarely ate out, bought second hand, never had a cable bill, and drove our used cars for an average of 8 years but we also travelled internationally, as a family, about one every two years.)

      When our average age was 50 (I’m 3 years younger!) our net worth, not including the house was $531660. (And if we had been using low cost index funds, instead of high cost mutual funds, it would have been even higher.)

      So for two income families making anything above the average family income a net worth of $500,000 by 50 seems very achievable to me!

      • Barb, if you bought a house in the early 80s, you paid 10 times less for your house than the cost of a house today while you earned only slightly less than what average people earn TODAY, some 30 years later. Comparing your generation to current grads is a stretch.

        I earned a ton of money in my 20s and was able to buy a $700k house in Toronto in 2005. I’m now in my mid 30s. In the past year alone detached homes in Toronto appreciated by $200k. I now also own a condo I bought in two years ago for $500k. In the past year it has appreciated about $50k. So on paper I’m up $250k in a single year. But that’s not all – I rent out my house for $3500/month and I have two roommates in my condo paying close to $2k/month, so if one adds that in, I earned over $300k in the past year.

        But that’s not all. I still make money from my internet business…

        However, the point is that owning real estate has been crucial to my net worth. How difficult would it have been for me to increase my net worth by $300k (ignoring my online business income) in a year without owning and renting property?

        I have a mortgage on one of the properties, but I’m not paying it – my tenants are.

        I feel very fortunate for my situation though I’m nowhere near where I want to be. The goal is to grow my online business and sell it. With the cash, but another property (ideally two) and retire at 40 earning over $100k/year on rental income without barely lifting a finger. I don’t know if I’ll be able to do it, but I’m shooting for it.

        By the same token, I’ve met far too many people and looked at too many stats that indicate most people have little chance of achieving the goals outlined in this article. The author will easily reach these goals if she’s earning $100k on a single income and her husband is earning similarly.

        I have no kids. My greatest weakness has been spending money on countless hookers (they’re called “escorts” now – I’m addicted to them) and plan to only marry a girl who has high earnings and a history of wise financial decisions (or wealthy parents). This way if we were to divorce, I’d be protected as our net worth would be similar.

        Some people hike or take trips to enjoy life. I have sex with beautiful hookers (up to 400+). I wouldn’t have it any other way.

        • Setbacks are also inevitable in life. Illness, divorce, kids. For example, when I was 27 I had to settle a lawsuit which cost me $250k (settlement and lawyer fees).

          If I didn’t have to pay this out, I could have kept it in the bank, invested for a higher return, or spent it on more hookers (at $150 a pop, I could have fucked 1666 more hookers).

          It’s the greatest crushing blow to my life thus far. Hope you all have better luck.

        • We built our house in 1990. (You know when the average 5 year fixed mortgage rate was 12%.) If we sold today we would only get about double what we paid to build it. (Probably in part because most young people in this market wouldn’t consider a such a small one bathroom house.) Wages in the same period may have a little less than doubled but again consider the extremely low interest rates on mortgages for the past few years.

          The one item that I will concede has really exceed the average COLand made it hard for young people to get ahead is tuition fees. I’m glad to see that both the feds and some provinces are doing a little more to direct dollars at those who most need it.

        • Tommy, the success you have achieved in real estate is based almost entirely on luck. You happened to be in the right place in the right time, so you have benefited. Good for you! I also benefited from this. I bought my first home in 2004 for $220,000, sold it in 2007 for $450,000. Bought my second home in 2007 for $510,000, and it is currently valued at $495,000 after 10 years. I was super lucky with real estate from 2004 to 2007, and less so since then. At the same time I have saved approx $250,000 in RRSP, TFSA, and RESP (and had a divorce in there which reduced this amount somewhat for a short time). The path you are following is only one path to wealth, but it is not for everyone. Real estate has risks just like any investment. Personally, I do not want the hassle and expense of being a landlord. I would rather take the money I would need for a down payment on a rental property and keep it in my RRSP or TFSA accounts. I can earn a long term return of 6% to 8% with basically no work. I don’t want the work required to own and maintain a second property even if someone else is paying the mortgage. When you look at long term rates of return on rental property ownership, as well as the ongoing costs of maintenance, and the cost of my own time spent managing the property, you basically come out even with typical returns you would achieve in an investment portfolio. The only difference is that my way requires basically no work from me. Also, I did not need to live with roommates and sacrifice my personal living space. In the end you may need to liquidate your revenue properties (incurring significant costs and taxes) to retire as you can’t eat a rental property in retirement.

          There is more than one path to financial freedom. I think both ways can work, however I would suggest that the recent run up in real estate prices in the Toronto area is not sustainable and will even out in the near future, similar to what has been seen in Vancouver. I hope you will post on this site after the year when you may lose $300,000 in net worth due to factors totally beyond your control.

  • Why wouldnt you want to count the equity of your house, after all you been paying into it each month? If you still owe $100K, but the market value is $180K, why wouldnt you count $80K into your networth?

    • Paper profits.

      You can’t eat your house. You can’t sell a shingle or a window if you need to drum up a quick $200. Furthermore, if you insist on owning a home, any appreciation you enjoy on your first home, just gets rolled into the down-payment of your next when you upgrade.

      The only way to capture equity in your home, is to sell it and downgrade. Until then, your grains exist solely on paper.

      • OH my bad, thought this article is about “net worth”, not liquidated assets.

      • So should you have house paid off by 60 and a million dollars as well. Or just a million dollars by 60 and mortgaged home or rented place?
        I have a house worth close to a million and I am retiring in a few years. I plan on selling to get a million dollars in Cash to reach this goal. Once I have a million did I reach my goal or do I need a home as well.

      • Bridget, I personally always included home equity (and debt) in my net worth. If I didn’t, I would have been completely oblivious to how much equity I had inside of that non-income-producing asset.

        Who says you have to upgrade and roll it into an even more expensive leveraged home? You’re not the first person I’ve heard make this point. And I just don’t understand it. A lot of people have a lot of cash tied up in real estate.

        Traditional age retirees reach a point in their lives where they choose to cash in on their home equity and live somewhere cheaper and add the equity gains to their existing portfolio. But…if you were fortunate to buy at a time when it made sense to, why wait until your old to sell and downgrade?

        I mean, unless you *ENJOY* working to generate the income needed to pay an expensive rent or mortgage payment, it seems silly to ignore that you have available resources and consider cashing in on them or not.

        This is also why I haven’t pursued graduate school at this point in my life. The opportunity cost of taking that $$$ out of my portfolio is just too large for something that is a non-guaranteed reward.

        Is selling and downgrading that absurd for a young person? Or just so uncommon that I’m even more of a finanical weirdo?

        I do think real estate to some extent is a crapshoot, but financially speaking, the own vs rent decision has to be more about doing the math at the time of potential purchase than the various blanket dogmas that tend to get thrown around.

        High values in recent times is why I sold last year and plan to move somewhere a bit less expensive next year. Why would I roll it into another property for more leverage? That seems silly. That doesn’t speed up my journey to financial independence. It delays it. By a lot. But moving somewhere cheaper potentially does speed up my financial independence journey because my ongoing cost of living goes down.

        Financial Privilege? Absolutely. So so so much of it. And I’ll have it for the rest of my life. But feeling guilty over my privilege isn’t going to do anything positive for anybody. And, obviously, what you do with the privilege matters too.

        To me, rolling my real estate gains into a down payment on a more expensive property would be a perfect example of wasting my privilege and my successful string of luck. Maybe most people think they can duplicate their real estate luck, I’m not that naive though. 😀

        By the way, I’m truly sorry to hear about the news in your personal life. I hope you come out of that whole thing without too much financial liability. You’re one of the good ones and it makes me sad that you will have to go through that in both your financial journey and your life journey.


  • I’m from generation X and of course we as a whole believe that a home is a good investment. I’ve done well financially and have easily met the benchmarks lined out in this article. But homes that I have bought and sold over the years have provided a big boost to my bottom line. I now have 12 small homes that I’m renting to millennials, and they are literally making me rich. They should own these homes instead of paying me.

    I think my advice to them would be buy a modest home you can afford (be careful with how much you pay in closing costs – realtor commission, inspector fees, etc., ) invest some sweat equity into the home from time to time, and sell when your career dictates that you need to move.

    You can always sell or rent a modest home. It is with the McMansions that folks go wrong.

    • Real estate affordability and potential for return is not geographically consistent.

      The average price of a single family home in my city is over $500,000. It’s not a mcmansion — in many instances it’s half a duplex a 30 minute commute from the centre of the city.
      In cities like Toronto and Vancouver prices are even more insane. The average price of a single family home is over $1 million dollars. Many millennials pay over $500,000 for 2-bedroom condos.

      You believe a home is a good investment because you lucked out in when you could afford to enter the market. Furthermore you likely had minimal or no student debt, and found a full-time well-paying job fairly easily.
      For millennials in hot housing markets, the down-payments required to purchase a home, and the monthly mortgage payments needed to live in it, are often impossible to afford on current salaries with hefty student loan payments.

      Millennial renters are making you rich because they don’t have a choice. Don’t gloat about it.

      • Thanks for your response, and I think you make some really strong points. However, every generation deals with recessions. The business losses from 1990-1991 took approximately seven years to recoup. The 2008-2009 business losses took only three years to recoup. http://www.fin.gc.ca/new_template/2013/doc/plan/chap2-eng.html
        Plenty of folks in my generation graduated with college debt and did not get jobs immediately following school. Myself, I had a teaching degree and ended up working as a carpenter. We spent plenty of time living in our parents basements, but we had a goal to get out asap.
        No one in my generation was able to buy a 500K home right out of school, we are only now able to do that after 20 years of work. But not everyone lives in expensive urban areas where the price of homes are and have always been exorbitant. There are plenty of reasonably priced homes throughout both Canada and the US that millennials could purchase. So urban and small town millennials have different real estate markets.
        A new model would have folks living in the basement until the parents are laid to rest. At that point they come up from the basement and take possession of the home that they couldn’t afford. Unfortunately, the parents have a reverse mortgage, and they again are out of a home.
        The folks who purchase a home will have it mostly paid for in 20 years, and will have a stronger balance sheet. They will one day look around at the prices in their neighborhood and be glad that they made the purchase when they did. (This is my opinion.)
        Also, there is value in home ownership outside of financial terms. It is a place to grow, where you can make it your own and raise kids and maybe grow old. As Robert Frost wrote “home is the place where, when you have to go there,. They have to take you in.” There is something to be said for that. No landlord kicking you out because they don’t like your dog etc.
        Thanks for your site, I have enjoyed reading your articles and believe you have some great insights.

  • Sunny Days in your Late 50's
    January 29, 2017 8:57 am

    Wow, just came upon this article and I can see why many people have a distorted sense of personal financial management. Everything the author has said is doable and very real. My wife and I graduated with some student debt(this is good debt). We paid it off quickly in our 20’s. I started RRSP’s in my 20’s under the advice from my father. We saved and bought a modest house in the mid 90’s. We have paid that off and during that time never became mortgage poor and continued to add to the investments whenever we could. We saved for our two children in RESP’s as soon as it was allowed by the programs. At 51 we together have a net worth of over2 million dollars(house is only 600 k of this amount) by just making fundamental money decisions. Time is your friend with investments. Read this article closely and like many that have written in do not be in denial and angry. She makes sound points about real estate wealth and wealth that is liquid that may be required for rainy days. If you have children try to teach them about good money decisions ; otherwise you will be paying for them later on anyways. Start soon and it becomes easier later on . It gives you the knowledge that you are not trapped in any job or debt . Good article

    • I like these type of blogs/posts about money. We get so many opinions and most are all good as well. like some have said, it is doable, yet so many factors that come into play that makes it hard or almost impossible. Every situation is different so everyone will have different results of course. There are things we can’t control such as a divorce, illness, loss of job ect. But the most important factor where most fail at achieving these results is because of overspending and I can say that MOST people do that, most will find excuses to justify the trip down South or the new SUV they have and this just drains all the money they could have otherwise put in savings instead and at the end, will make THE difference between a solid positive networth and a negative one.
      As for myself, for anyone who cares to know (we all like comparisons I know) I make $55000 per year, my spouse doesn’t work and never did so mom at home with 2 young children (8 and 4). I never had any help from parents as far as money goes but was fortunate to graduate with about $6000 in debt only. Current Net Worth is $215000 (includes $100 000 worth house) and I am 38 years old living in Atlantic Canada.
      How did I do it?
      We never go South for vacation, only ever drove used cars and only ever had one car until 2 years ago, limit restaurant to a minimum, invested a little in RRSP, TFSA and max my RESP contribution for our 2 children. I also have company pension plan that helps and my net worth includes that pension fund as well. so yes it IS doable, because we live simply, we don’t try to impress anyone and still have fun, we still go camping with the kids and to go out once in awhile.

  • You must not have kids. Broken bones, repaired knees, car repairs, car insurance, health insurance, 1% merit raises, real inflation, interest rate increases, college tuition, interest on college loans, property taxes, state taxes, stadium taxes, downtown taxes, uptown taxes, taxes on taxes, means I’m always living paycheck to paycheck. As soon as the kids graduation from college, uncle sam cranks up your taxes as if you really had that money to begin with. Its as if they really don’t wan us to be independent……..

    • I live in Canada, which has universal healthcare. The cost of broken bones and repaired knees will always be $0 for me and my family. I pay for additional private health insurance (for extra coverage like dental, vision, and massages), but it is only $78/mo.

      I’m self-employed, so I’m in charge of my raises. Done school. No property taxes because I don’t own property. Have no idea what downtown or uptown taxes are (maybe you’re being sarcastic?)

      • Loving my Riverdale hood and the house I own.
        March 18, 2017 9:15 pm

        It’s the reality check when one gets older. Being in your 20’s it’s easy to map out your life path, where you want to be at a certain age, whether it’s personal or financial. Death, divorce, illness, and other life events change this path in an instant. The older you grow, the better the odds one of these “events” will change your path regardless of the level of education. Let me say your young and naive, as you grow older your idea of financial goals will indeed change. Yes us Canadians are fortunate to have universal health care—Self-employment however, you will never reach your current financial goal. It’s not possible…

  • I stopped reading when the comment was made about your 20’s being controlled by parental situation. I call bull.

  • Several people have commented here that aiming for a net worth of $1 million by age 60 is an unrealistic goal. I disagree. When I turned 60 three years ago, my net worth was about $940,000. It would have been higher had I maxed out my 401k contributions every year and had I not stupidly lost a lot of money in the tech bust of 2000-01. So I wasn’t always the smartest investor, but I’ve always been good about saving and living below my means. It also helps having a steady, good-paying job . The point is that time, discipline and the magic of compound interest can put you over the $1 million mark. And yes, I am over that mark now, despite my past mistakes.

    • That’s awesome Drew! It’s reassuring to know you can still hit the $1 million goal by age 60 even if you make a few mistakes along the way. Nice to hear from someone who has attained it!

  • Real estate and income producing properties all the way!

    I’m worth about 1.2mm at thirty. I am liquid as I pay down my houses and get a heloc against them to get liquid and make more moves! My rent covers all mtg payments and generates positive cash flow.

    I’ve got about 3.5mm in real estate assets and about 600k liquidity at any given time.

    It helps that I make 350k+ per year.

  • These numbers are good targets. My husband and I are mid 40s and together our net worth is closed to $800K so I anticipate we will hit $1M by 50. I work in the non profit sector so salary isn’t high but we manage our money well and live within our means and focus on spending on things that make us happy live travel and music.

  • I’m very pleased to uncover this page. I need to to thank you for your time just for this fantastic read!! I definitely liked every little bit of it and i also have you book marked to see new stuff on your blog.


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