what's up me guys it's Graham here so it's recently said that nearly a third of Americans would go broke in less than a week if they lost their job to make matters worse 55% of Americans have less than $1,000 saved 70% admit the bad spending habits and just as many have nothing invested for retirement whatsoever thankfully though it doesn't have to be that way so to solve this here's exactly how much you need to save an invest by every age to eventually get out of debt buy a car own a house become a millionaire and one day retire on top of that we'll also cover how much money it takes to make it within the top 1% of every age group the average income within those brackets my own recommendations to put yourself ahead and then finally what you could do to get yourself back on track if you find yourself falling behind so that eventually you'll never have to work another day in your entire life ever again although before we go into that if you guys appreciate videos like this just do me a quick favor and invest in the like button by giving it a gentle tap and subscribing if you haven't done that already and is a thank you for doing that I'll do my best to respond to as many of your comments as possible all right so to start the first number that we got to talk about is net worth this is calculated by adding up everything that you own a value subtracting your debt and whatever's left over is your net worth so with that out of the way I want you to take a guess at what you think the average net worth is of a 23-year-old go ahead just guess a number you got it a few minutes later all right well according to the college investor that average net worth is negative 31,5 $71 meaning if you're 23 years old and your net worth is anything above zero then technically you're doing a lot better than the average of course In fairness this number is highly skewed by student loan debt since a lot of young people are starting out with nothing taking on enormous loans and then barely making any money so don't worry the numbers do get a lot better from here although in terms of how much the average 23-year-old makes here's where things get interesting the median income for this category is $37,500 a year and just guess at what you think it takes to make it within the top 1% of this category just guess well that answer is $19,750 a year now don't get the wrong idea it's a lot of money but it's a lot less than what it would take to make it within the top 1% of all earners in the United States which comes in at $819,000 a year but lastly as far as how much this age bracket has invested unfortunately it doesn't seem like there's a reliable indicator that breaks it down by AG although it does seem like that by the age of 29 the average 401K balance is $10,500 which means probably most people have less than this now since there's a very limited and skew data set of people in their 20s since a lot of them are going to college earning absolutely nothing in accumulating debt here are my own recommendations that would apply to anyone just starting out in their career regardless of how much you make or save number one would be go and get a credit card the point of this is to begin building up your credit score as soon as possible since 50% of your score is made up from your ontime payment history and how long you've had your credit open for this step is really just as simple as opening up a no annual fee secured credit card putting a few minor expenses on the card every single month and then paying it off in full by the time it's due that's it the second go and make sure you open up a Roth IRA now I understand that I mentioned this in practically every single one of my videos but it's true this is one of the best retirement accounts out there that you can invest up to $7,000 a year completely taxfree so that by the time you're 592 you could be sitting on a lot of money but to help with that third I would recommend getting in the habit of saving 20% of your income now usually i' set more strict measurements here like save two to three times your monthly expenses but honestly I think setting up good financial habits as soon as possible early on is way more important and if you could start saving 20% of your income now it's going to be a lot easier to carry forward into the future especially since the average gen Z savings rate is currently sitting at just 3. 4% and fourth get yourself invested in the markets in some way or another by doing this you'll get the experience of investing you could see what it's like and then from there it'll be a lot easier to automate in the future in fact it's said that investing could be so easy that everything you will ever need to know throughout your entire life could just simply be written on an index card and if you're curious what that would be here you go just pause the video and you could read it and finally there's one last point that I want to mention this is the time that you should begin thinking about how much money you need in retirement now I know for most 20-year-olds this is probably not what you want to be thinking about but trust me on this as you're about to see it's a lot easier to start now than to push it off later let me show you if you want your money to grow enough to make you $50,000 a year by the age of 60 without you ever having to work another job in your entire life ever again you're going to need $1,250,000 invested if you begin doing that starting at the age of 20 you can do that entirely within a Roth IRA with as little as $416 a month that means if you ignore the rest of the video but just focus on this one thing you've retired yourself regardless of what you make or save beyond that that's why it's so important to set good financial habits early on as soon as possible because that leads us to then how much you need invested in your 30s let's start off with the average net worth according to the college investor the average 30-year-old is a net worth of 42,300 $139 and by the age of 35 that amount jumps all the way to $141,000 now in terms of how much the average 30-year-old is making that amount was recently found to be $67,100 a year the median salary was $50,000 a year and if you want to make it within the top 1% of all 30-year olds that amount comes out to $323,000 a year then just for fun if you want to make it within the top . 1% of all 30-year-olds that amount would be $570,000 as far as how much they have invested according to Investopedia those between the ages of 30 to 39 have roughly $38,000 within their 401K a separate study found that for people in their 30s the median net worth was a more reasonable $34,000 since averages could often be skewed by Tech billionaires and trust fund kids who inherited a lot of money early on so even though these numbers seem somewhat all across the board the general rule of thumb is pretty much this by the age of 30 you should aim to have at least one one time your annual salary saved up and invested so if you have a salary of $60,000 then that's the amount that you should aim to save this all might seem overly simplistic since this is probably during a time where you're just starting out your career you're increasing your income you're paying off student loan debt maybe you're just buying a house that's why overall I think if you follow these Financial Milestones throughout your 30s you should be okay first you should aim to have a credit score of at least 750 this is going to put yourself in the best position possible to be able to get a low interest rate mortgage or be the the ideal borrower for pretty much anything that you need second you should try your best to be completely bad debt free by the time you're 30 this means that you don't have any loans or debt above a 6% interest rate you don't carry any credit card balances and besides the probability of a mortgage you don't have anything else weighing you down third you should keep a 3 to 6mon emergency fund at all times doing this is as simple as calculating exactly how much money you need to survive every single month including housing car payments Insurance food and utilities and then saving up 3 to six times that amount now fourth since this video is literally titled how much money you should have invested by every age as your income increases try to save 25% of your salary like I mentioned earlier a lot of these habits really begin in your 20s and if you could stick with it it's going to be really easy to continue into your 30s for instance if you're able to save 20% of your income throughout your 20s and then you get a raise by the time you're 30 it's really easy to be able to save the difference and now save 25% without really even noticing it since we're going with the goal of being able to earn $50,000 a year from your Investments if you're just now starting out at the age of 30 it's still absolutely doable to have 1,250,000 invested by the age of 60 but it will require that you invest $895 a month to be able to catch up again if you're earning the median income of $50,000 a year this will equate to a 25% savings rate so it's possible but it's going to take a bit more work and now let's talk about people in their 40s because this is where things really begin taking off that's because in what's called their Peak earning years and all the hard work put in throughout the last 20 years is beginning to pay off in terms of the typical 40-year-old net worth that's now grown to a median of $80,000 according to the financial Samurai blog but since some people in their 40s make so much money that skews the average to some pretty high numbers and that's why the college investor found that the average net worth could be as high as $319,000 but in terms of how much the average 40-year-old makes that comes out to 7 8,334 and if you want to reach the top 1% of all 40y olds you'll have to make an income of $650,000 a year well the top 1% net worth for 40-year-olds is $6.
5 million of course if you want to take that a step further and make it to the 0. 1% of people in this category you'll need to make about $1. 1 million a year and if you want to take it even crazier than that and go to the top 0.
1% of all income earners that begins it $7. 5 million a year anyway coming back down to earth throughout your 40s the average person has a net worth of $713,000 the median net worth is $126,000 and Investopedia tracks the average 401K balance at $93,000 so most likely the true number is somewhere around there now generally alongside with that most articles and experts say that by the age of 40 you should have three times your annual income saved up and invested in order to do this assuming you need three times the average 70,000 a year salary that'll require you to save between 15 to 25% of your income beginning at the age of 25 at a 7. 5% return which would give you about $220,000 left over beyond that though here's a few other recommendations that I'd like to throw into the mix so that anyone would be able to work towards them and number one would be to focus on maxing out retirement accounts this would include a Roth IRA at the $7,000 a year a 401k up to $23,000 a year or an HSA up to $41 $150 a year second you should also aim to maximize your earnings over the next 10 years the reality is as you approach some of the highest earning years of your life it's important that you make the most of it after all it was found that employees who stay within the same company for more than a few years get paid on average 50% less than someone who changes jobs more frequently and that should be taken into consideration third have a budget to stick to no matter what no even though technically this is something that you should be doing at any age it's especially important here because even though you're ear earning the most you're also probably spending the most that's why I think it's really important right now to live below your means think longterm and make sure whatever you're doing is sustainable then fourth by now you should know exactly how much money you need to invest to be able to retire by whatever your goal is for example if you're starting out with $0 at 40 years old and you want to retire at 65 with $1.
5 million you're going to have to invest $1750 a month to catch up so the sooner you start thinking about this the easier it's going to be and the better that you could plan ahead but now we should start talking about how things begin stacking up at the age of 50 the media net worth for someone in this age is about $29,000 well the average net worth is much higher $1. 3 million again boosted up by some of those billionaires who skew the numbers heavily towards the upside but hey if you want to be within the top 1% of net worth for those who are 50 years old that'll be about 9. 7 million and what I personally found the most interesting from this is that the income throughout your 50s doesn't don't really differ that much from your 40s in fact the median salary here is the same $60,000 a year will the top 1% earn around $650,000 a year at this point most standard guides say that you should have five times your annual salary saved up at 50 so if you're making $70,000 a year that would be $350,000 saved and invested but if your goal is to have $1.
5 million saved up by the age of 60 to be able to retire if you follow this advice you'd actually be falling behind just consider this if you started investing $416 a month by the age of 20 by the age of 50 that would have grown to almost $600,000 which is much higher than the amounts that are recommended here this is exactly why my financial Milestones would be a bit different from this first aim to have at least 7 to eight times your annual salary saved up or 10 to 12 times your annual expenses invested depending on how close you are to your goal if you find yourself following behind on this further than expected then your options are really just one of three make more money retire later or win the lottery the second depending on where you are in this situation you should be about halfway through paying off the mortgage on a primary residence some people could have mixed feelings on this depending on the interest rate of the mortgage but my personal philosophy is this I love low interest rate fixed debt but there's also something to be said about the security and peace of mind of having a paid off home that's why I believe you shouldn't pay it off sooner than needed but once it's paid off you should probably keep it paid off and then third by this point you should have a very clear understanding of exactly when you'll be able to retire and how much more money you need to be able to get there and then finally here's where you're going to be around ag60 for those curious the median income is about the same at $58,000 a year with the top 1% making about $650,000 a year but I will say this is super confusing because other studies that I've seen say the top 1% in this category actually makes more like $1. 5 million a year so I can't tell exactly which one is correct although as far as net worth is concerned the median Falls around $490,000 with the average being sign significantly higher at 1.
