Where should one be at 30?

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waitforit
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Where should one be at 30?

Post by waitforit » Tue May 19, 2009 6:38 am

I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?

Valuethinker
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Re: Where should one be at 30?

Post by Valuethinker » Tue May 19, 2009 6:50 am

waitforit wrote:I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?
I have no idea BUT

the main thing at that age is about debt reduction. Other than mortgage debt being debt free, and well on track to repay mortgage by, say, 50.

The internal rate of return (ex the tax deduction for USians on mortgage) of paying down debt is very high.

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tadamsmar
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Re: Where should one be at 30?

Post by tadamsmar » Tue May 19, 2009 7:01 am

waitforit wrote:I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?
The one thing that I wish I had realized when I was younger is the implications of the fact that some available tax-breaks (IRA, 401k, HSA) are lost forever if I don't take advantage of them. It may not be possible for everyone, but I think it is worth some effort to not let them evaporate unused before the yearly deadlines, typically April 15. It might be a good idea to fund your 401K and then borrow against it in some situations.

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Re: Where should one be at 30?

Post by Ron » Tue May 19, 2009 7:07 am

waitforit wrote:How much in retirement savings should the 'average' Boglehead have accumulated by 30?
At age 30, we had $0.00 Heck, I didn't start investing for retirement till age 34 (my wife, a year later) after our respective defined benefit plans (e.g. pensions) were eliminated.

Both scheduled to retire at age 59 (I did, she continues to work due to not being "emotionially ready" to retire). BTW, at that age (actually in our early 50's) we were, and continue to be debt free.

For me, there is no typical "script" to follow. For instance, we started out saving/investing 2% of our gross income at age 34. Over the years, that increased to 33% for a period of about 7 years before my retirement, after we paid off our final (4th since we were married) note/mortgage.

Everybody's different. Some folks will take a note/mortgage into retirement; my wife (and me) are extremely debt adverse and even though getting our final note on a 30-year payoff, we did it in 5.5 years. Agreed, we were in good shape since we rolled our home sale profits into the next abode rather than "cashing out" our using the profits for our own whims. Our current home had a bit more than 50% down when we had it built. Today? It seems like the "young folk" want a large home immediately; we took the more typical path of folks of our age (old :roll: ) during those 40 years - that is start out small, and move/upgrade based upon "requirements of life".

Just giving you our story. Just to say that you can start out late (as we did), but if you keep the goal constantly in front of you, you'll do fine in the end.

- Ron

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Post by bluto » Tue May 19, 2009 7:09 am

All bogleheads are above average :lol:

Bad jokes aside, I have no idea, the situations people face are too dissimilar. I would bet that the 30-something Bogleheads are much better off than the average American.

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Post by livesoft » Tue May 19, 2009 7:10 am

I was flat broke at age 28. At age 30 I probably had $10K in retirement accounts, but my employer back then matched/contributed 15% of my salary to my 403(b). At age 30 I had no car, no house, no kids. I had to walk to work and rent an apartment.

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Post by TheEternalVortex » Tue May 19, 2009 7:24 am

According to my lame internet research, to be 90th percentile in net worth at age 30 you need approximately $220,000. So that's at least a concrete target to compare to.

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tadamsmar
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Post by tadamsmar » Tue May 19, 2009 7:44 am

I don't think I had any retirement savings at 30, and very little net worth.

In general, you can't really be behind in accumulation at 30 (unless you have excessive unsecured debt), but you can be ahead.

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Re: Where should one be at 30?

Post by White Coat Investor » Tue May 19, 2009 8:17 am

waitforit wrote:I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?
You should be very well insured at 30.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Post by strcmp » Tue May 19, 2009 8:43 am

My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
And this is assuming you are not married and don't have kids yet, and don't have any unforeseen emergencies.

Since you seem to have both wife and kid.. I don't know how one would extrapolate that value to include wife/kids. And things would also change depending on if your wife was bringing in income or not.

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Post by WheatThin » Tue May 19, 2009 8:50 am

strcmp wrote:My own opinion.. Take it for what its worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
On anything approaching a standard entry-level college-grad salary (say $40-85k) and 5-8 years in the workforce, I really don't see how that's doable.

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Post by bluto » Tue May 19, 2009 8:53 am

strcmp wrote:My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
WOW! Is this the Boglehead 90210 version?

Mike Willis
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Re: Where should one be at 30?

Post by Mike Willis » Tue May 19, 2009 8:56 am

EmergDoc wrote:
waitforit wrote:I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?
You should be very well insured at 30.
can you elaborate?

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Post by DrafterMan_MN » Tue May 19, 2009 9:10 am

strcmp wrote:My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
And this is assuming you are not married and don't have kids yet, and don't have any unforeseen emergencies.

Since you seem to have both wife and kid.. I don't know how one would extrapolate that value to include wife/kids. And things would also change depending on if your wife was bringing in income or not.
Is this a real post ?

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Post by Phatphoeater » Tue May 19, 2009 9:18 am

As a recent saver/investor in my mid 30s, I also wonder where I am compared to others my age. However, I think as has been mentioned above, each person's unique situation will dictate where one *should* be. Just like asset allocation decisions, progress to retirement goals will vary by individual.

I view my progress in terms of proximity to saving/investing timeline. I have a certain retirement goal and am slightly behind due to a recent home purchase that was probably a bit too much for my current income. I still have a decent chance of making my goal but I'm having to sock away over 20% of my gross and am hoping my pension will be there in 20ish years.

I also agree with EmergDoc regarding getting insured. Getting my disability/life/umbrella insurance set up is my immediate-term goal.

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Post by HomerJ » Tue May 19, 2009 9:20 am

strcmp wrote:My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
And this is assuming you are not married and don't have kids yet, and don't have any unforeseen emergencies.
LOL... assuming you inherited a bunch of money too I think....

At 30, I was still negative... because of student loans... had just bought a small house with minimal down-payment, I did have a paid-off car though...

At 39, I have about $100,000 in IRAs and 401k and emergency fund. Student loans are gone. Also have about $100,000 in equity in my house...

Now I happened to marry a woman who was a much better saver than me so together we have a lot more than that (not yet millionaires though)

See that's the problem with these kind of surveys. I could easily say, "Oh by 39, one should have this much money, because I have this much money...", but luck plays so much into it... I have large equity position in my house, because of buying and selling over the last 10 years has been profitable (on my third house in ten years).

My wife has a lot of money, because she works hard, makes a lot, and saves a lot... BUT... there was also 3 years where she and first husband lived overseas and basically banked 80% of their salaries (The oil company they worked for paid their living expenses).

I doubt that's typical...

If you can be debt-free at 30 (other than house mortgage), with a decent emergency fund, especially with a new family, you're definitely ahead of the game.

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Re: Where should one be at 30?

Post by junior » Tue May 19, 2009 9:24 am

waitforit wrote:I am currently in the midst of a milestone year in my life (yeah, that means I'm 29) and have been thinking a lot lately about goal setting and planning. I'm at the point where I've been in the workforce for >5 years and have started executing my career plan. This year has brought both our first child and also the first serious move down the career path into a mid-level position.

Anyway, I'm curious what would be considered good progress on the financial front. I can find data that suggest the medium income of 30-somethings is X, or that the average 30-yr old has Y dollars in retirement accounts... but I am hardly interested in comparing to the 'average' american.

How much in retirement savings should the 'average' Boglehead have accumulated by 30?
This is an extremely situation specific question.

Bogle estimated that, absent a pension, someone needs to save 15% over the course of their working life to retire. (I guess if your employer matches 5% then you'd have to save 10% then receive the 5% matching)

I've come to the conclusion this goal is impossible for many people. And even if it is possible, the sacrifice of not living while young is not worth it for many people.

Ultimately, how much you can afford to save depends on how much you can comfortably live below your means, and how much you can comfortably life below your means has a lot to do with your salary.

The more you make, the easier it is to put some aside while still being comfortable.

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Post by Grt2bOutdoors » Tue May 19, 2009 9:30 am

Here's my two cents: I second "EmergDoc" - be well insured; with a kid and wife, you want to have between 5 and 10 times your income in "term" life - no bells and whistles needed here. Depending on your health, you can buy cheaply at 20 year rates or stretch for 30 year stuff.

Disability insurance - super cheap again depending on health, if you get this earlier in life, it becomes more expensive as you age. If you can get "own occupation" classification, all the better.

An emergency fund - 6 months if you working in a tenured government job, 12 months + if you're not.

Max out 401(k) if you can, grab all the "free" money that employer offers in form of a match.

Don't take on more debt than you can chew - I abhor consumer debt. Try not to borrow too much on the mortgage. No more than 28% of gross, tops. Never mind this "you'll grow into it" nonsense you hear.
Buy a house - make sure you have "umbrella insurance" - cheap piece of mind.

Don't buy a depreciating asset, ie. car, furniture with a loan - buy used, these days they're pretty reliable.

Don't assign a specific dollar figure at your age - you'll be liable to drive yourself nuts if the market doesn't behave the way you thought or some of life gets in the way. Good Luck!
Last edited by Grt2bOutdoors on Tue May 19, 2009 10:02 am, edited 2 times in total.

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Bounca
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Post by Bounca » Tue May 19, 2009 9:31 am

I'm willing to provide specifics for the 30 somthings and break things down.

Me 37 Wife 36 Two kids, 4 and 7, Three cats

Mortgage = Payoff date 9 years from now at the latest. Loan to value 30/70 %
All 401Ks and IRAs combined = As of approx 11 AM today $141,727
Pension = Me yes Her no
Misc Taxable Savings/Emergency Fund = Around $5K
Life Insurance = yes, 20 yr term, 4X salary, both of us
Job Security = Me very good, Her there's some risk for sure
Other Loans = 3 yr minivan loan, other than that and mortgage, we are debt free
529 Plans for both = $1,700 in each plan deposting $200 a month for each, plus some savings bonds

Am I 'OK'???? I have no flippin idea (someone please say yes).

We can't predict the future.

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Post by arbogast777 » Tue May 19, 2009 9:34 am

strcmp wrote:For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
HUH!? If you began investing at 18, and considering the market has basically returned 0% over the past 10 years, a 30 year old would have had to have saved about $40,000 a year for those 12 years to reach $500k. I don't think so...

As to the OP, I'm 30 and I can say that I sit on $60,000 and have no debt (including student loans) BUT I also don't have a house. That FEELS like a largish amount for my age, at least when I compare myself to my friends. Would have been twice that if the market hadn't tanked, though :-(

But even if you have nothing now, if you put together a good portfolio at Vanguard and AT LEAST max out your Roth IRA every year, I think you (and I) will do just fine.

This 30 year old's portfolio:

U.S. Large Blend Stock Index (VFINX) 10.00%
U.S. Large Value Stock Index (VIVAX) 10.00%
U.S. Small Blend Stock Index (NAESX) 10.00%
U.S. Small Value Stock Index (VISVX) 10.00%
European Stock Index (VEURX) 10.00%
Pacific Stock Index (VPACX) 10.00%
Emerging Markets Stock Index (VEIEX) 10.00%
International Small Cap Index (VFSVX) 10.00%
Inflation Protected Bond Index (VIPSX) 10.00%
Intermediate Term Bond Index (VBIIX) 10.00%

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Post by Grt2bOutdoors » Tue May 19, 2009 9:37 am

Bounca wrote:I'm willing to provide specifics for the 30 somthings and break things down.

Me 37 Wife 36 Two kids, 4 and 7, Three cats

Mortgage = Payoff date 9 years from now at the latest. Loan to value 30/70 %
All 401Ks and IRAs combined = As of approx 11 AM today $141,727
Pension = Me yes Her no
Misc Taxable Savings/Emergency Fund = Around $5K
Life Insurance = yes, 20 yr term, 4X salary, both of us
Job Security = Me very good, Her there's some risk for sure
Other Loans = 3 yr minivan loan, other than that and mortgage, we are debt free
529 Plans for both = $1,700 in each plan deposting $200 a month for each, plus some savings bonds

Am I 'OK'???? I have no flippin idea (someone please say yes).

We can't predict the future.
Sounds good to me :wink:

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Post by UKbloke » Tue May 19, 2009 9:40 am

100K unlevered net worth @ age 30 would be the minimum for me to feel safe about the future.

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Post by strcmp » Tue May 19, 2009 10:14 am

DrafterMan_MN wrote:
strcmp wrote:My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
And this is assuming you are not married and don't have kids yet, and don't have any unforeseen emergencies.

Since you seem to have both wife and kid.. I don't know how one would extrapolate that value to include wife/kids. And things would also change depending on if your wife was bringing in income or not.
Is this a real post ?
Yes.

But I will retract that # or make it lower since each person's career choice/income is different. Geography plays a factor in cost of living. Other factors include motivational drive in learning additional skills that can bring in extra income (side business, etc.), being willing to work the extra hours, being frugal + saving, and making wise financial decisions. The combination of all of the above all play a factor. I can only speak to what I have seen or experienced.

Each person will have a different perspective / unique situation pertaining to this based on how they have lived their life so far or have seen their friends, family, and other people live. Judging by the responses so far, that is certainly the case. I guess 500k is not as average as I thought it would be for bogleheads, but I can say it is doable.

Perhaps "average 30 yr old boglehead" can be lowered to 100k net worth. I can throw all the numbers out there that I think people should be at, but they are all biased from my perspective. The only way to get the average 30 yr old boglehead net worth is probably to put out a poll and average the responses.
:)
Last edited by strcmp on Tue May 19, 2009 10:25 am, edited 1 time in total.

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Post by White Coat Investor » Tue May 19, 2009 10:16 am

I wasn't out of school/residency at 30. $500K is ridiculous. I do hope to hit my first million by ~42 though. That's 11 years out of residency. We'll see if the markets cooperate. I won't be able to save that much in 11 years, especially since I'll be in the military for the first 4.

I think people's incomes and personal situations are so different you can't really say "this is where a boglehead should be by ....." Too much variation.

I think it is a worthy exercise for an individual to do based on their own income, but useless as an average.

What I meant by be well-insured at 30 is that when you are young you have no portfolio, and need to make up the difference with insurance, disability for you and term life for your family. Mid-way through your career, you have a significant portfolio, and don't need the insurance as much. By the end, you have a big old portfolio and don't need the insurance at all.
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Post by nisiprius » Tue May 19, 2009 10:18 am

Age 30? Like others I'll tell you where I was, not "where a Boglehead should be." Nothing in investments, maybe about a month's salary in savings, just bought a house, one two-year-old kid and one brand-new kid.

Six times' salary in renewable-five-year-term life insurance.

Of course, not to put too fine a point on it, I also had parents. I don't know how you factor this in, but my parents were still alive, and, while hardly rich, I considered to be a sort of "emergency reserve" if you will. One which I fortunately never had to call on.

Funny, people make all these references to "human capital" (the economic treatment of their prospective earnings). What about "parental capital" (the present net value of the future stuff you might receive from your parents, either as gifts or as an inheritance?) Come to think of it there was a posting a week or so ago, and I guess that might have been what the poster had in mind. It's just too creepy to think about, though.
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Post by Stonebr » Tue May 19, 2009 10:31 am

Let's see. Where was I at 30? My 20s were a blackout period, so it's hard to recall.

I had just started saving money -- $10 a week for a year added up to, miraculously, $520 and that was enough for my first investment, a CD earning about 12.5%. It was 1981. My other assets included a worn out French 10 speed bike, the remains of a sixpack of Heineken, and a mountain of books and LPs.

But I had landed my first corporate job with benefits and a five digit salary.

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Post by market timer » Tue May 19, 2009 10:37 am

My goals for age 30 are to be well educated, healthy, and with a good job that I enjoy. I'm on track.
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Post by White Coat Investor » Tue May 19, 2009 10:44 am

strcmp wrote:
DrafterMan_MN wrote:
strcmp wrote:My own opinion.. Take it for what it's worth. :)

For a Boglehead, I'd say by age 30, you should have $500k net worth.
(Cash in savings, retirement accounts, and equity portion of your house)
And this is assuming you are not married and don't have kids yet, and don't have any unforeseen emergencies.

Since you seem to have both wife and kid.. I don't know how one would extrapolate that value to include wife/kids. And things would also change depending on if your wife was bringing in income or not.
Is this a real post ?
Yes.

But I will retract that # or make it lower since each person's career choice/income is different. Geography plays a factor in cost of living. Other factors include motivational drive in learning additional skills that can bring in extra income (side business, etc.), being willing to work the extra hours, being frugal + saving, and making wise financial decisions. The combination of all of the above all play a factor. I can only speak to what I have seen or experienced.

Each person will have a different perspective / unique situation pertaining to this based on how they have lived their life so far or have seen their friends, family, and other people live. Judging by the responses so far, that is certainly the case. I guess 500k is not as average as I thought it would be for bogleheads, but I can say it is doable.

Perhaps "average 30 yr old boglehead" can be lowered to 100k net worth. I can throw all the numbers out there that I think people should be at, but they are all biased from my perspective. The only way to get the average 30 yr old boglehead net worth is probably to put out a poll and average the responses.
:)
Your lack of insight to the average American cracks me up. $500K? Seriously? I would submit there are quite a few bogleheads who haven't even earned that much by age 30. I'm 33 and my lifetime earnings are still well below that figure. Many Bogleheads RETIRE with less than that. The suggestion that you just have to work hard and have a side business to do it is laughable. Yes, a few people got lucky in their 20s through an inheritance, some fortunate real estate investments, some lucky investing, or a particularly profitable business or very high-paying job right out of college, but as a benchmark? :roll:

Most docs and probably lawyers don't even hit a zero net worth until well into their 30s, much less $100K or $500K, even with Bogleheadish savings and investing habits.

If many of us had $500K at 30, we'd be retired at 40, 2.5 decades earlier than most Americans.

==FV(8%,10,50000,500000)=$1.8 Million at age 40.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Post by mike_slc » Tue May 19, 2009 10:47 am

(deleted, TMI)
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Post by baw703916 » Tue May 19, 2009 10:50 am

When I turned 30 I had just completed my education some eight months earlier, and had started my first real job--if a post-doc counts as a "real job". :wink: A negative net worth, thanks to student loans.

The expectation of having a $100K net worth at 30 is absurd for someone going into science or medicine.

On the other hand, having become accustomed to a grad student lifestyle, within four years I had saved enough money for a down payment on a house, in addition to paying off the student loans.

Best wishes,
Brad
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Re: Where should one be at 30?

Post by Boglenaut » Tue May 19, 2009 11:18 am

Deleted..my response was too stupid.

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Post by eas » Tue May 19, 2009 11:23 am

nisiprius wrote:Age 30? Like others I'll tell you where I was, not "where a Boglehead should be." Nothing in investments, maybe about a month's salary in savings, just bought a house, one two-year-old kid and one brand-new kid.

Six times' salary in renewable-five-year-term life insurance.

Of course, not to put too fine a point on it, I also had parents. I don't know how you factor this in, but my parents were still alive, and, while hardly rich, I considered to be a sort of "emergency reserve" if you will. One which I fortunately never had to call on.

Funny, people make all these references to "human capital" (the economic treatment of their prospective earnings). What about "parental capital" (the present net value of the future stuff you might receive from your parents, either as gifts or as an inheritance?) Come to think of it there was a posting a week or so ago, and I guess that might have been what the poster had in mind. It's just too creepy to think about, though.
nisiprius, if you were thinking of this thread that I started a little while back, it was more of a exercise to see if people thought that inheritances should effect your AA. The general consensus from the replies I got was that unless the inheritance is fairly large, don't plan on it.

I agree, it can be slightly morbid to think about assets in such a way, but no less, in my opinion, than discussing a will with parents / children. You are planning on someone's death. Edit: I should add, that I started that thread mainly out of curiosity, not for any personal planning reasons.

More on topic, I agree that any metric will fail, as the circumstances are wildy varying. A friend of mine went to school with me, and he had to take out loans due to being out of state. He paid them down very quickly after graduating, but still had to fork over ~20k to the lenders. I had the lucky opportunity of being born into a state that has a great school and a in-state lottery that funds school scholarships, so I paid almost nothing out of pocket for school.

thedude
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Post by thedude » Tue May 19, 2009 12:26 pm

I'm 31 and have a net worth of approx $110K:

Roth: 11.5K <-- 100% equities, VTSMX
403b: 36.5K <-- 100% equities, VTSMX
Taxable: 70K <-- saving for house + emergency fund. ~50% cash, ~25% equities, ~25% bonds.
----------------
Assets: 118K

Debt: 8K student loans @ 3.5%, paying it as slowly as possible.

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goggles
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Post by goggles » Tue May 19, 2009 12:38 pm

Data point: by age 30, my lifetime earnings (high school on) were $248k. I feel pretty good about that; it wasn't a ton, but it was enough, and I was happy. Quite a bit of that time was in college or grad school. Net worth of about $100k, due to hardcore saving, some luck, and about $30k in a much-appreciated gift. I also paid off my (not-huge) student loans in this period.

Not seeing where one might get $500k saved out of that.

Alistair
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Post by Alistair » Tue May 19, 2009 1:02 pm

At 30, more or less zero I would think. A year into first job (1999 or 2000 ish, starting salary 18,000 GBP). Fortunately the great British taxpayer and a corporate sponsor paid for my education. To the extent I'm better off now, it required various promotions/raises... and was held back by taking a year or so to do 'other things'.

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steelerfan
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Post by steelerfan » Tue May 19, 2009 1:55 pm

Remember the book, the Millionaire Next Door by Stanley and Danko?

Stanley and Danko argue that your total net worth alone does not tell a good enough picture of one's wealth, what matters is how much worth you can accumulate on your income considering your own age. Therefore, a 30 year old making $ 25,000 who has a net worth of $ 80,000 has more relative wealth than a 50 year old doctor making $ 200,000 a year who is only worth $500,000.

Here is a link to the wealth calculator:
http://www.banksite.com/calc/wealth
"You make most of your money in a bear market, you just don't realize it at the time." - Shelby Cullom Davis

dc5vt05
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Post by dc5vt05 » Tue May 19, 2009 2:22 pm

i guess you could reach 500k by age 30 if you work a few contracting jobs in iraq or afghanistan. dont know how many people would be willing to do that.

pretty interesting to see how much some people have saved. im 26, turn 27 this year. definitely feel like i have saved more than the average 26 year old. but it has come at a cost....

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HomerJ
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Post by HomerJ » Tue May 19, 2009 2:23 pm

steelerfan wrote:Remember the book, the Millionaire Next Door by Stanley and Danko?

Stanley and Danko argue that your total net worth alone does not tell a good enough picture of one's wealth, what matters is how much worth you can accumulate on your income considering your own age. Therefore, a 30 year old making $ 25,000 who has a net worth of $ 80,000 has more relative wealth than a 50 year old doctor making $ 200,000 a year who is only worth $500,000.

Here is a link to the wealth calculator:
http://www.banksite.com/calc/wealth
The only problem with that calcuator is that it asks for your salary TODAY... and then compares it to the amount you've saved over the years at a much lower salary...

Ron
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Post by Ron » Tue May 19, 2009 2:32 pm

rrosenkoetter wrote:The only problem with that calcuator is that it asks for your salary TODAY... and then compares it to the amount you've saved over the years at a much lower salary...
Oh oh...

I have no salary (nor will I, for the rest of my life).

How am I doing :roll: ???

- Ron

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steelerfan
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Post by steelerfan » Tue May 19, 2009 2:56 pm

Ron wrote:
Oh oh...

I have no salary (nor will I, for the rest of my life).

How am I doing :roll: ???

- Ron
Well, it doesn't ask for your salary. It asks for Your total annual household income. But your point is well taken. There are several scenarios that will lead to silly looking results with this calculator. The point is, however, that you should not compare the net income of someone making $500K/yr with someone making $50K/yr.
"You make most of your money in a bear market, you just don't realize it at the time." - Shelby Cullom Davis

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modal
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Post by modal » Tue May 19, 2009 2:58 pm

Didn't Fidelity or some other place have a tool which you could enter your age, region, savings, income, and mortgage to see where you stand?

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Frobie
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Post by Frobie » Tue May 19, 2009 3:07 pm

I'm a little surprised by this, but I actually found the Excel spreadsheet containing my account values from around my 30th birthday. It looks like my net worth was near my annual income at the time.

I managed to delay getting my first "real" job until I was 26. I graduated with debt equal to around 1/3-1/2 my annual income. So in retrospect I'm pretty happy to have gone in 4 years from negative net worth to 1x my annual salary, even if it wasn't quite Bogleheads Territory(TM).

Of course, you didn't have to be a genius to make money in the stock market back in the mid-to-late 90s, and there were no kiddos in the picture.

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NYCPete
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Post by NYCPete » Tue May 19, 2009 3:15 pm

Bounca wrote:I'm willing to provide specifics for the 30 somthings and break things down.

Me 37 Wife 36 Two kids, 4 and 7, Three cats

Mortgage = Payoff date 9 years from now at the latest. Loan to value 30/70 %
All 401Ks and IRAs combined = As of approx 11 AM today $141,727
Pension = Me yes Her no
Misc Taxable Savings/Emergency Fund = Around $5K
Life Insurance = yes, 20 yr term, 4X salary, both of us
Job Security = Me very good, Her there's some risk for sure
Other Loans = 3 yr minivan loan, other than that and mortgage, we are debt free
529 Plans for both = $1,700 in each plan deposting $200 a month for each, plus some savings bonds

Am I 'OK'???? I have no flippin idea (someone please say yes).

We can't predict the future.
I'll go too:

I'm 29 with a domestic partner(unmarried) who is 31. We have 6 plants, and they don't lip off or talk back.

Mortgage = None right now, as I rent. Annaulized rent is 6% of gross income (in an NYC rent stabilized apartment). They will carry me out of this apartment in a coffin...
Tax Bracket = 25% (filing single)
403b and Roth IRA combined = Around $19K
yearly retirement contributions = around $12,000 from myself and employer contributions combined ($9000 me, $3000 employer)
Pension = none
Misc Taxable Savings/Emergency Fund = $5K
Life Insurance = yes, through employer 4X salary; domestic partner, none.
Property Insurance = yes, around $40K in renters insurance
Job Security = Me: decent, Her: moderately cyclical
Other Loans = For me, none; for her, $20K in student loans
529 Plans= None. No children

With the amount that I save per year, and how much I expect my income to increase over the next 20 years, I am on track to reach my retirement goal. My investment strategy is made up of total market index funds for both U.S. & Int'l, a bond index fund, and a REIT fund. I plan to switch to Total World Stock Index fund when purchase fee goes away. I am currently 81/19 stocks/bonds.

Best,
Peter
To the extent that a fool knows his foolishness, | He may be deemed wise | A fool who considers himself wise | Is indeed a fool. | | Buddha

waitforit
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Post by waitforit » Tue May 19, 2009 3:16 pm

I feel like I didn't give good information in my original post.

At age 22 I was married, owned a home, barely getting by attending professional school full time while my wife worked in a lower-income profession. We never took on debt besides a mortgage and low-interest federal student loans.

At 25 I graduated, got my first job, and began maxing my 403b and roths for myself and my wife. The difficult thing is it seems as though I've been putting a ton of resources into funding those accounts and I believe the account is worth more or less every dollar I've put in with the market runup and subsequent crash - a bit disheartening.

Now that we have a little one, it doesn't seem as worth it to put every effort into funding retirement at the cost of keeping monthly expenses low, etc. Probably a sign that I'm oversaving. Don't feel sorry for me though, we make a good combined income. Perhaps it is a reflection of getting older and realizing what matters - experiences vs. accumulating money.

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tetractys
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Re: Where should one be at 30?

Post by tetractys » Tue May 19, 2009 3:19 pm

waitforit wrote:... I'm curious what would be considered good progress on the financial front.
waitforit,

Being a Boglehead is really a lifestyle measured in financial prudence, and not in dollars. So from what you've said, I think you're far far ahead of the curve.

Here's to you and you're family's prosperity, Tet
RESISTANCE IS FRUITFUL

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FrugalInvestor
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Re: Where should one be at 30?

Post by FrugalInvestor » Tue May 19, 2009 3:32 pm

tetractys wrote:
waitforit wrote:... I'm curious what would be considered good progress on the financial front.
waitforit,

Being a Boglehead is really a lifestyle measured in financial prudence, and not in dollars. So from what you've said, I think you're far far ahead of the curve.

Here's to you and you're family's prosperity, Tet

I agree wholeheartedly.

I believe it is much less important where you are financially at 30 than how you've decided to live. If you live beneath your means, save all you can and invest prudently you are well on your way to a secure future.

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3CT_Paddler
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Re: Where should one be at 30?

Post by 3CT_Paddler » Tue May 19, 2009 3:36 pm

tetractys wrote:
waitforit wrote:... I'm curious what would be considered good progress on the financial front.
waitforit,

Being a Boglehead is really a lifestyle measured in financial prudence, and not in dollars. So from what you've said, I think you're far far ahead of the curve.

Here's to you and you're family's prosperity, Tet
I would second what Tet has to say. The fact that you are a boglehead means that you are on the right track. Don't get stuck in the trap of comparison with others... you can either get a false sense of importance based on your success or become envious of others when they do well. Here is a good proverb...
Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding.

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ipod_keith
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money mag article

Post by ipod_keith » Tue May 19, 2009 3:40 pm

waitforit,

Back in April of 2005, Money Magazine featured an article that covered some of what you're looking for. I cannot read the whole title because I did not scan the title page, but it's something '.... Are you About Money' by Cybele Weisser.

I'm not sure it's entirely accurate, especially since most people's assests have declined since 2005, but it at least gives you some things to think about.

If you cannot find it, PM me and I'll send you the copy I scanned.

-keith

bmb
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Post by bmb » Tue May 19, 2009 3:41 pm

I wouldn't worry about retirement at age 30. You may never want to retire, and life expectancy may increase dramatically in the next two decades.
At age 30 if you are supporting yourself and have no debt with the possible exception of a college loan and a mortgage, you are doing fine. Consider any investments gravy.

raddle
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Post by raddle » Tue May 19, 2009 3:58 pm

I'd say hitting a net worth of $0 at 30 is a good benchmark, assuming no gifts and no help from parents for college/grad school.

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