A 32-Year-Old Financial Analyst and Her Chef Husband Are Intentionally Not Buying a Home
$374,570 net worth and No FOMO spending!
Exploring the Hidden Aspects of Wealth
Welcome to this week's newsletter, where we show you real numbers from real people and get a glimpse into their personal finances. From those in their 20s just starting out, to those in their 50s who have been building their wealth for decades. Each story provides insightful takeaways and strategies that others have utilized to grow their wealth, providing you with inspiration and practical tips for your own financial journey.
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In their 20s:
$150,000 net worth - A 23 year-old living starting earning $100K/year after graduating and now earns $107K/year. Her accumulated net worth is 87th percentile for her age group. Her net worth primarily consists of $123,700 or 82% in retirement accounts (401k, Roth and HSA accounts). She opened a RothIRA after seeing a YouTube video and graduated with only $12K in student loans after utilizing scholarships and grants to cover most of the education costs. Here are 5 things she attributes to her college, getting an internship and landing her first job:
“Worked hard in high school to get good grades and to apply to low-income/first-gen scholarships that were available to me”
“Researched and found that top private schools are able to give you full ride if you’re poor enough (shoutout to Questbridge), was able to apply due to my strong grades and extracurriculars”
“Perfected my resume, focused on getting experiences instead of maxing my GPA (while my peers cared more about their classes), and aggressively networked and utilized first-gen/low-income college career programs, my school’s resources, and alums to learn more about career paths”
“Spent my winter breaks applying to research programs, applied to 200 internships during the school year to land my first paid summer internship before senior year amidst COVID hiring freezes”
“Was proactive in applying to things (started applying to full time jobs at the end of my summer internship before it was even over), aggressively spoke to all my college professors to try to get into their labs for research, made connections in my school’s career office to be aware of opportunities, all of these made it that much easier to transition from my natural science experiences and major to a business oriented career path without having to change majors/take more classes”
TAKE-AWAY: The importance of hard work, taking advantage of every opportunity, and an early financial education. This includes pursuing scholarships, internships, and work-study jobs during college. Also, proactively maxing out 401K and HSA contributions at an early age.
$302,000 net worth - A 28-year-old who has been working for 6 years and earns $84K/annually. He just reached a milestone of $200k in his 401k. His accumulated net worth is 90th percentile for his age group. His net worth consists of 89% in retirement accounts (401k, Roth 401k and Roth) and 11% in checkings/HYSA accounts. “The peace of mind that having all this built up so far is immeasurable, even if it means I haven’t been able to go on vacations as much as some of my other friends.”
TAKE-AWAY: Starting to save in your employer 401(k) will allow you to take advantage of matching as well as create the longest path of compounding over decades. Why do humans struggle to understand the exponential effects of compounding?
In their 30s:
$96,700 net worth - Amanda and Carlos, a couple with two young children. Carlos, is a government employee and Amanda is a teacher. Their financial discussions often lead to disagreements and have been a source of tension in their relationship. These disagreements are often rooted in their different perspectives and attitudes towards money. Carlos views Amanda as complacent and nonchalant about their finances, while Amanda feels that Carlos's constant pursuit of more can be burdensome. They do not have a joint account and handle their expenses separately, which often leads to feelings of unfairness. Carlos pays for their housing and car expenses, while Amanda covers childcare and groceries. This setup, they realize, causes a disconnect in their financial relationship and they are considering combining their finances to have a better understanding of where their money is going. “I've had the conversation with her multiple times that she's much more valuable than what the education system is paying her right now. I want you to be my partner not just in marriage, not just in Parenthood, but in finances as well.”
TAKE-AWAY: The importance of open and regular communication about finances in a relationship. It’s crucial to be on the same page and have shared financial goals and plans, especially in terms of investments and retirement. Also, joint or separate accounts, can significantly impact a couple's financial dynamic and overall relationship satisfaction.
$374,570 net worth - A 32-year-old financial analyst based in Chicago. She and her chef husband, who is two years older, earn a combined income of $160,000, excluding bonuses and side hustles. Their accumulated net worth is 86th percentile for their age group. Their net worth consists of 67% in retirement accounts, 23% in taxable brokerage, and 7.5% in checkings/HYSA. They are focused on achieving financial independence and potentially retiring early. She is more involved in managing their finances due to her husband's disinterest in the subject. Despite their aggressive savings approach and frugal lifestyle, they still manage to allocate money for enjoyment. The interviewee expressed satisfaction and peace of mind with their current financial situation. They have plans of potentially taking a year off to travel the world once they achieve financial independence. “The flexibility that comes with not needing your next paycheck is something I value above most other financial goals.”
TAKE-AWAY: Personal finance is just that - it’s personal! They are prioritizing saving for retirement over short-term goals like homeownership, which diverges from most peers' common practices. Be intentional about how you save and spend your money and ensure it aligns with your goals and values (even if that is different than your peers). This can create future optionality.
In their 40s:
$2,010,895 net worth - A lawyer in his late 40’s shares 15 years of monthly details on Networthshare.com starting with a negative net worth of ($142,000) in December 2010. It takes years to get the first $100K of net worth and only 1 month for the most recent increase of $100K in net worth. He has an accumulated net worth that is 92nd percentile for his age group. The composition of his net worth is 42% retirement accounts, 38% home equity, 8% cash, 10% college savings, and 1.5% taxable brokerage.
Best Financial Decision? “Started tracking my net worth”
Worst Financial Decision? “Buying a house in Las Vegas in 2006 with zero down”
TAKE-AWAY: Start tracking your net worth as soon as possible. Even if you have a good salary, it's essential to learn how to manage your money. Consistent saving and investing over a long period of time can lead to substantial growth in net worth.
In their 50s:
$3,200,000 net worth - A 56 years old, married for 29 years, and has two daughters. He lives in a semi-rural area outside a suburban city. He works in enterprise software sales for a large corporation as a director-level individual contributor, and his annual income is in the range of $400-$450k. He started his career as a financial analyst, founded a software company with his wife, went into real estate for a decade, and finally returned to IT. His accumulated net worth is 91st percentile for his age group. His net worth consists of 46% in retirement accounts, 23% in primary home equity, 11% in investment property, 12% in checkings/savings account, and 4% in second home equity. His spends ~$180-$200k/ year and his saving rate has varied over the years, but currently, he saves about 30-35% of his gross income. In terms of investments, his philosophy is to buy what he knows (primarily tech stocks) while balancing risk with more conservative moves like paying off his primary house mortgage and building up a sizable cash reserve. “Focus on the big things – affordable housing, reliable autos, staying out of credit card debt. Automate savings, especially retirement savings.”
TAKE-AWAY: The importance to save and invest, even when income levels are low. He started by saving 6% of his income and gradually increasing it to 30-35% over time by avoiding lifestyle inflation as his income increased.
What is the meaning behind Ten Wilsons?
The $100,000 bill is the highest denomination ever issued by the U.S. Federal Government. Woodrow Wilson is the president on the $100,000 bill.
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7 net worth updates from earlier this week
