Real-Life Financial Journeys: From Aggressive Savers to Successful Entrepreneurs
From $15,000 net worth at age 34 to $25,000,000 net worth at age 42
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. We have curated a collection of personal financial journeys, shedding light on how individuals across different age groups and income levels navigate their financial landscapes. From 20-somethings making sacrifices for a secure future, to strategic 30-year-olds juggling debt and planning for family expansions, to ambitious 40-year-olds building wealth over time, these stories reveal the diverse paths to financial stability. Each narrative offers unique insights and takeaways, emphasizing the importance of balance, planning, diversification, and persistence in financial success.
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In their 20s:
$350,000 net worth - A 29 year-old that is earning $120K/ year and has been saving and investing aggressively while living with his parents for the last 3 years. His accumulated net worth is 92nd percentile for his age group. He is investing 16% pretax into a 401(k), which includes company match. This comes to about $19K/yr. Another $6K a year into a Roth IRA, and $24K a year into a taxable brokerage. He is also saving $4K a year in a HYSA for a house someday but is also starting to feel burned out. "I just feel pretty down because I’ve sacrificed a lot of my life to get myself into a decent financial situation, and I’m constantly anxious that I’m not doing enough and am still behind."
TAKE-AWAY: The importance of finding a balance between financial security and personal well-being. While aggressive saving and investing can greatly increase net worth, it may also lead to feelings of burnout and constant anxiety. It's crucial to consider personal happiness and mental health along with financial goals.
In their 30s:
$73,375 net worth - A 31 year-old Senior Resource Navigator earns $58,000/year working at a non-profit organization. She lives in Grand Rapids, MI with her husband and daughter. Their finances are kept separate, but they split bills and household costs 50/50. They have an accumulated net worth that is 45th percentile (below the median) for their age group. Majority of their net worth is in their home $118K, they have only $14K in retirement accounts and over $68K remaining in student loans. They plan to have more children and have started preparing for the additional expenses. Despite her financial anxiety, she is working on paying off her debts and is expecting part of her student loans to be forgiven in four years."I feel a level of financial anxiety that isn’t always based in reality. I am working on paying off accelerated debts like my private student loan to have more spending money."
TAKE-AWAY: The importance of planning and managing finances, especially when dealing with debt. Despite facing financial anxiety, she remains proactive in financial planning.
$2,020,000 net worth - A 39 year-old financial advisor shares his investment strategies of turnkey rentals and the challenges of investing in real estate. His accumulated net worth is 96th percentile for his age group. His net worth is heavily weighted in investment real estate with 47% in single family rentals and syndications, 35% in retirement accounts, 10% in a primary residence and 4.5% in cash. In this podcast interview he shares his financial journey including views on debt, lessons from childhood and advice for those starting out. He began contributing to his 401k at the age of 22 and later branched out to real estate investments. This early start allowed his wealth to compound over time and with $2M+ before 40, he is now in the 96th percentile of net worth for his age. One of his regrets is his heavy focus on retirement accounts which has been beneficial, but diversifying to more flexible and immediate income sources, such as real estate, could have enhanced his financial freedom."Put something away for your future self from your very first paycheck and you're never going to miss it."
TAKE-AWAY: The importance of diversifying your investments (retirement accounts, real estate syndications, single-family rentals, and cash). This diversification can help to mitigate risk and can create multiple income streams.
In their 40s:
$1,305,750 net worth - A 42 year-old earning between $100-$149K/year in a medium cost of living city. 15 years of monthly details on NetworthShare.com starting at a $133,622 net worth in 2010. He has an accumulated net worth that is 91st percentile for his age group. The majority of his net worth ~$790,400 or 61% is in retirement accounts, $268K or 21% is in taxable brokerage, and $189K or 15% is in home equity. He is planned to retire early on $70K/year pension (not in net worth) plus 72T distributions from retirement plans. “Plan to start a 72T distributions in 2026 (estimated at $40K a year). My pension will be approximately $70K a year, which is in addition to my 72t distributions.”
TAKE-AWAY: Typical of the profiles of those that are trying to build wealth they have 2-4X as much in retirement accounts vs home equity. Consistent saving and investing over a long period of time can lead to substantial growth in net worth (see graph below that demonstrates this financial journey from age 28 to age 42).
$25,000,000 net worth - A 42 year-old software engineer shared his journey to financial independence, growing his net worth from $15k at 34 to $25M at 42. He started a SaaS company 8.5 years ago with minimal funds. Despite initial struggles, the product began generating revenue, allowing him to quit his salaried job. The business flourished, attracting interest from PE firms. Eventually, he sold the business for ~$40M (pre-tax). He has an accumulated net worth that is 99th+ percentile for his age group (anything above $7.8 million net worth is 99th percentile for his age group). Almost all of this is is invested in various ETFs except for $500K in cash. “My naive approach was that if I reach $1M in invested funds, I can take 10% each year indefinitely and not have to work again. That became my initial goal.”
TAKE-AWAY: One key takeaway is the importance of persistence and adaptability in achieving financial success. He started his business with minimal funds, faced initial challenges, but continued to refine and grow the business. This emphasizes that success often requires tenacity, a willingness to take calculated risks, and the ability to adapt and respond to challenges along the way.
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 last weekend!
