A newly minted millionaire and 5 other financial journeys

Unmasking Financial Realities Across Generations

May 29, 2024

Exploring the Hidden Aspects of Wealth

Our goal is to provide complete transparency and show you real numbers from real people. In today's newsletter, we have financial journeys of individuals from various walks of life. We examine a 23-year-old assistant publicist in Brooklyn with a net worth in the 71st percentile for her age group, who despite earning a modest income, manages to live comfortably in an expensive city thanks to wise spending decisions. We also explore the story of a 29-year-old couple with a net worth in the 98th percentile for their age group, who switched their career paths to prioritize financial stability. They focus on keeping major expenses low, which enables them to spend freely on things that bring them joy.

Moving into the 30s bracket, we meet a 31-year-old grants administrator in Philadelphia. Next, we learn about a mid-40s individual who recently crossed the $1 million net worth mark. His journey from a net worth of $10K in 2013, to now being in the 81st percentile for his age group, demonstrates the power of compounding.

Furthermore, we introduce a 41-year-old with a net worth of $6.1 million. Despite a dramatic increase in income over the past few years, he reminds us of the importance of identifying what 'enough' means on a personal level, to avoid working more years than necessary. We also explore the journey of a 40-year-old music producer and entrepreneur with a net worth of $8.1 million, who has masterfully combined his passion for music and skills in finance to amass wealth.

These stories provide a wide range of experiences and financial strategies, all of which reinforce the importance of mindful spending, smart investing and the power of compounding. They also remind us that there is no one-size-fits-all approach to financial stability and wealth creation. Take action now to create the life you want!

In their 20s:

$23,780 - 23-year-old assistant publicist living in Brooklyn, New York earning a salary of $43,000 annually. She has an accumulated net worth that is 71st percentile for her age group. She has $11,176 in stocks and the remainder in checking/savings accounts. She benefits from financial support (rent) from her parents and lives a fairly comfortable life. When she was 19, her grandfather helped her invest $10,000 into stocks. She manages this investment herself and is not allowed to withdraw any of the earnings until she turns 29. While she's not completely financially independent, she's conscious of her spending and tries to save where possible. "I took a women-centered economics class online that really shaped my outlook on personal finance, and I try to trust the process and not just hoard my money in my savings account, but it’s hard, and, frankly, I’m 23 and like to party."

TAKE-AWAY: Despite earning a relatively modest income, she is able to live in an expensive city, participate in social activities, and enjoy small luxuries by making thoughtful decisions about her spending. She recognizes the importance of budgeting and managing her money wisely. Also, she highlights the value of having a personal savings goal and investing for future financial security.

$1,020,000 - A couple, both 29 with no kids, switched degrees from English (her) & psychology (him) to finance & computer science once they both realized they wanted to prioritize financial stability. They have an accumulated net worth that is 98th percentile for their age group. The majority of their net worth $683K or 68% is in retirement accounts, 18% is in home home, 14% in taxable brokerage and 1.4% in cash. "An overarching theme is that I am a firm believer in keeping the BIG life expenses small & not sweating the little stuff. Some of the major life costs we either skipped (wedding) or minimized (housing, cars) allowed us to be there for our family (flying cross-country last minute for an unexpected funeral) or ourselves (date nights!) when we wanted to without thinking twice."

TAKE-AWAY: You and your partner can choose any path you want. You don’t have to do what others are doing. Prioritize your spending on what makes you happy and don’t worry about what others think.

In their 30s:

$75,359 - A 31-year-old grants administrator in Philadelphia, who earns $73,500 a year. She has an accumulated net worth that is 58th percentile for her age group. She shares details about her daily spending habits, her relationship with money, and her financial goals. The majority of her net worth, $61K or 81%, is in retirement accounts. Despite having a decent income, she still experiences financial stress due to previous years of low pay and the high cost of future goals such as buying a home or having children."I am still recovering from years of crappy pay and burnout working in non-profits. I am both extremely fortunate for what I have, yet aghast at how far behind I feel, especially because buying a home, having children, paying for the related costs later on, all feel prohibitive."

TAKE-AWAY: This emphasizes the importance of financial planning and conscious spending. You need to prioritize getting to that first $100K of net worth as early as possible.

In their 40s:

$1,000,815 - He is in his mid 40s and just crossed $1 million in net worth this week. Over 120 monthly net worth detailed entries on networthshare.com starting from ~$10K net worth in January 2013. He has an accumulated net worth that is 81st percentile for his age group. His net worth composition consists of $573K or 57% in retirement accounts, $314K or 31% in home equity, and $71K or 7% in taxable brokerage.

TAKE-AWAY: It took many years for the first $100K of net worth and only 4 months for the last $100K of net worth emphasizes the importance of compounding.

$6,100,000 - 41 year old, married with 2 kids. 3 updates over the last 4 years. Original update was December 2020 when his net worth was $2.6 million. Their accumulated net worth is 98th percentile for their age group. Their income increased dramatically over the last few years, from $400,000 per year to over $1 million per year. "The lifestyle changes at $20M or $30M NW isn't significant enough for me to work another 10-15 years - at that point any extra wealth I gain I'd basically eventually donate to charity anyways since I don't plan on passing along generational wealth."

TAKE-AWAY: Those that save can sometimes save too much. You need to figure out for yourself what your ‘enough’ is. Many people keep pushing the goalpost back and working more years than they need to.

$8,100,000 - A 40 year old music producer and entrepreneur with a background in finance, political science and music. His accumulated net worth is 99th percentile for his age group. 70% of his net worth is in commercial real estate primarily on the east coast. Podcast interview where he discusses how he built his wealth through commercial real estate investments and his marketing agency. He also shares his conservative approach to finance, avoiding high levels of debt, and the importance of reinvesting back into his businesses. Despite his success, DJ Bander continues to maintain a low-key lifestyle and emphasizes the importance of pride in one's work. "I never increased my spending and kept my lifestyle very low-key even when I started making a lot more money. So I was able to constantly be reinvesting. I never lived beyond my means."

TAKE-AWAY: This is a good example showing it is possible to combine your passion (music) and skills (finance) to create significant wealth. Also, a reminder that living below your means allows you to create future optionality.