Net Worth vs YEO

Google ODaK24
Jan 10 14 Comments

What are some good benchmarks for networth based on YOE of 2, 5, 10, and 20?

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TOP 14 Comments
  • Amazon lvd11
    In my opinion you should be saving half your take home. Hand wavy if your are 300k TC and pay a third in tax you should be saving about 100k per year. This includes not only your stock market investments but also the capital you have saved in your home.

    The S&P 500 returns about 7% after inflation. So you can work out how much you should have saved my year n, as

    100k x (1.07^n - 1)/.07

    That gives these values:

    2yr: 0.207 million
    5yr: 1.8 million
    10yr: 13.8 million
    20yr: 41 million

    If you think you should be saving a lesser amount per year you can use a different multiplier in the above future value of an annuity formula.

    In reality most people retire rather than continue working before they get to the big number at 20yr because there is more to life than having a big investment. So I guess most people retire or do something different after 3mil or so.
    Jan 10 9
    • Google ovBk62
      Them 10 year savings though! Wonder why everyone doesn't reach 13.8 by 10 years ..
      Jan 10
    • New DuQvV7x
      This isn’t grounded in reality.
      Jan 10
    • Amazon lvd11
      The math is correct. Why people don't achieve it is that they have a spending problem and don't manage to save 100k/yr even though they could and should.

      I'm assuming 300k TC here with a 33% tax (just to make the math simple). You can rework the numbers with a different amount. If you think you should only save 50k per year divide all the above by 2 or whatever factor.
      Jan 10
    • Rackspace FINf68
      Lvd I think your math might be off. I tried a couple of compound interest calculators online and with monthly contributions of 8400 at 7% interest compounded annually, the result is less than 1.5 million after 10 years.

      https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator
      Jan 10
    • Google / Eng yogi bear
      lol, fantastic math
      Jan 10
    • New DuQvV7x
      lol at spending problem when the math is off by 10x
      Jan 10
    • Airbnb Ktfg
      California taxes with that tc would be more like 45%
      Jan 10
    • Microsoft stayfitcop
      My dude I hope you don’t work in accounting or Corp finance at amazon.
      Jan 20
    • New DuQvV7x
      Lol. I forgot this thread.

      Looks like @lvd11 just abandoned this instead of acknowledging bad math
      Jan 20
  • New DuQvV7x
    100k, 500k, 2m, 5m
    Jan 10 0
  • Twitter / Eng topk
    10, 5mil
    Jan 10 1
  • ConocoPhillips GzFG12
    2, $20k (almost all 401k)
    Jan 10 0

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