Wealth expert reveals what your net worth should be by the time you're 40
An expert in building wealth has shared advice on how much you should have by the time you hit 40.
The show was The Ramsey Show, which shares financial advice, with host George Kamel sharing some advice about just how much the show recommends you have by different milestones in your life.
He explained that this was net worth, so that may not mean the money you have in the bank but also includes things like property, investments and stocks, and pensions, if you have those things of course.
This was compared with the national average net worth at a given age, with what the show suggests its viewers should aim for instead, and the second number is significantly higher.
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"If you're under 35 instead of $39,000, I think it would be great to have a hundred grand by the time you hit your early thirties, a hundred thousand dollars net worth," he said in a video posted on YouTube.
"Not necessarily what's in your bank account, but retirement, your home equity, all of that."
This is of course assuming that someone is fortunate enough to be able to afford to buy a home to have equity in to begin with.
Many younger people in the US are still finding it difficult to buy a home, despite working very hard full-time, sometimes multiple jobs.
A combination of stagnating wages, the cost of living including crucial things like housing and health insurance, not to mention property prices, continues to put the dream of owning a home out of reach for many.
Nonetheless, those fortunate enough to be in a position where they can afford the deposit on a house can then begin the process of building equity in that property, which adds to your net worth as opposed to renting where the money goes to the landlord and property managers.
All this meant that by the time someone is approaching their forties, the show suggests that they should have amassed a net worth approaching half a million dollars.
"35-44, a great number to hit is 400 to 500 thousand dollars of net worth by the time you are in your forties," said Kamel. "It's an awesome goal to have because that tells me just based off compound growth, you're gonna retire a millionaire plus."
But what about as you continue to progress in your career?
Kamel suggests that if you continue on the same trajectory then you can even be looking at becoming a millionaire by the time you're approaching 50.
"Now 45-54 instead of a 247 [thousand] net worth, what if you started approaching, baby steps, millionaire status? $750,000 to a million would be fantastic," he said.
"And here's where I get that number - 49 years old was the average number for our baby steps millionaires, when we did the millionaire study, over 10,000 of them, 49 was the average age that they hit taht millionaire net worth."
By the time you retire, he suggests that you have around two and a half million dollars in net worth.
"I hope these numbers are low for where you guys end up," he added.
He went on to claim that data from Goldmann Sachs suggested that 40 percent of people who are being paid $500,000 are living 'paycheck to paycheck' due to their spending.
"They're leveraged up to their eyeballs," he said. "They drive the nicest cars, have the nicest homes, and they can afford all of their giant payments, but it's not moving them forward when it comes to their net worth."
Kit Roberts