Stock investing for dummies – The Average Net Worth Of Millennials By Age



Stock investing for dummies


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Let’s not sugar coat it – we’re all a bit voyeuristic when it comes to other people’s money. How much do you think they make? How much do you think they have? How did they afford that car? Can you believe that so and so is buying a house?

​So let’s focus on one metric – net worth. And let’s talk about millennials – which is likely you, and is me too.

​Why millennials? Well, the media seems to portray millennials as broke, unable to pay their student loans, and never able to buy a house. Millennials are supposedly delaying marriage and all sorts of stuff because they are poor and burdened by debt.

I don’t think that’s the case. With anything financially related, there is never an easy answer. But I think there are just as many millennials crushing it financially. I know first hand that some millennials are already millionaires. 

​Maybe the trouble is how we define millennials? Maybe there’s a bigger picture here we need to consider. Maybe we just need to ignore the mainstream media when it comes to wealth. Let’s break it down and then look at the average net worth for millennials.


Who Are Millennials?

​Millennials are technically anyone born between 1980 and 1998 (always subject to change). Basically, these people are 18 to 35 today.

​What makes them unique as a generation? Well, millennials likely were little kids in a time before computers and cell phones were everywhere. They likely remember getting their first computer and cell phone, and it was a big deal. The likely encountered technology for the first time at school – playing Oregon Trail on a green computer screen.

​When it comes to money, millennials do have some of the highest student loan debt rates of any generation in history. The average millennial has $30,000 in student loans.

​Depending on when the millennial graduated college, they could have entered a terrible or awesome job market. Remember, some millennials graduated from college before the financial crisis of 2007, some during it, and some after it. When you graduated from college played a huge role in your earnings right out of school.

Millennials are also all dealing with life events at different times as well – from buying a house to getting married, some did it before the recession and some after. As a result, even some older millennials can still be behind.​

So, it’s really a mixed bag when it comes to millennials. They’re hard to define financially.

But one thing’s for sure – they’re not dumb when it comes to their money. They are combining technology and money like never before (mobile banking, financial apps, etc), and they want their money to work for them. However, the traditional banking and finance sector hasn’t caught up, and millennials really don’t like engaging with traditional brick and mortar finance. As such, there is a divide here.

When looking at net worth for millennials, these are all factors to consider.

Factors To Consider About Millennial Net Worth

When I think of the main factors that fall into millennial net worth, here’s what we need to consider.

First, we need to consider when millennials graduated. If millennials are 18 to 35 today, some haven’t even graduated college yet. However, if you’re 35 today, you likely graduated from college 13 years ago – or 2003. That was before the last financial crisis.

Second, we need to look at the average salaries of graduates by year. NACE has a great survey that they conduct to look at the average salary of college graduates each year. Here’s how that looks:

Age

Starting Salary

35 (Class of 2003)

$40,818

34 (Class of 2004)

$43,124

33 (Class of 2005)

$41,376

32 (Class of 2006)

$42,881

31 (Class of 2007)

$43,094

30 (Class of 2008)

$42,414

29 (Class of 2009)

$41,546

28 (Class of 2010)

$40,766

27 (Class of 2011)

$41,701

26 (Class of 2012)

$44,259

25 (Class of 2013)

$45,327

24 (Class of 2014)

$48,127

23 (Class of 2015)

$50,561

22 (Class of 2016)

$51,100 (estimated)

Third, we need to discuss student loans. Student loans are a huge factor in millennial net worth, so we want to consider the average amount of student loan debt millennials had when the graduated (data here). Just look at the chart below – just within the “millennial generation”, student loan debt has doubled, on average. For current students, I estimated how much student loan debt they’d have currently – with next years graduates on track to set records again.

Age

Average Student Loan Debt

35 (Class of 2003)

$18,271

34 (Class of 2004)

$18,608

33 (Class of 2005)

$19,669

32 (Class of 2006)

$20,790

31 (Class of 2007)

$21,975

30 (Class of 2008)

$23,228

29 (Class of 2009)

$24,664

28 (Class of 2010)

$26,125

27 (Class of 2011)

$27,707

26 (Class of 2012)

$29,384

25 (Class of 2013)

$31,163

24 (Class of 2014)

$33,050

23 (Class of 2015)

$35,050

22 (Class of 2016)

$37,172

21

$39,915

20

$27,879

19

$18,586

18

$9,293

Finally, we do have to make some assumptions about saving. Remember, net worth is all about assets minus debt. But income plays a huge role and how much income is saved and how much debt is payed off really makes a difference. For the “average” millennial, I’m going to look at average savings rates for the calculation. For the above average millennial, we’re going to factor in IRA and 401k savings, as well as home equity.

Year

Average Annual Savings Rate

2003

4.8%

2004

4.6%

2005

2.6%

2006

3.3%

2007

3.0%

2008

4.9%

2009

6.1%

2010

5.6%

2011

6.0%

2012

7.6%

2013

4.8%

2014

4.8%

2015

5.1%

The Net Worth of Millennials By Age

As we compare the net worth of millennials by age, I want to look at average and stretch goals. I think it’s important to always consider the average, but I also want to leave you with a stretch goal to get yourself in the top 1%.

Remember, net worth is assets minus liabilities. As we discussed earlier, the main assets we’re focusing on is savings, based on income. The main liability is student loan debt.​

Finally, I want to re-emphasize that these are just my estimates. The Federal Reserve data lumps everyone under 35 into one bucket, so while we have some starting points, things can always skew one way or another.

However, I think it’s a great starting point for discussion, so let’s jump into it.​

Average Millennial Net Worth By Age

Age

Average Millennial Net Worth

35 (Class of 2003)

$20,236

34 (Class of 2004)

$17,351

33 (Class of 2005)

$13,599

32 (Class of 2006)

$9,896

31 (Class of 2007)

$6,036

30 (Class of 2008)

$2,093

29 (Class of 2009)

-$1,989

28 (Class of 2010)

-$6,043

27 (Class of 2011)

-$10,168

26 (Class of 2012)

-$14,447

25 (Class of 2013)

-$18,988

24 (Class of 2014)

-$23,704

23 (Class of 2015)

-$28,706

22 (Class of 2016)

-$33,984

21

-$38,915

20

-$27,129

19

-$18,086

18

-$8,893

I tried to make these estimates line up with the real data as best as possible, but most real data points exclude negative net worth for millennials buried in student loan debt. For reference, the median of millennial net worth is $10,400. The true geometric average of millennial net worth is actually $75,500 – but that number is heavily skewed by outliers like Mark Zuckerberg.

So, what that means is, if you want to be “better” than average, the 50% mark is $10,500 overall. Here you can see my best estimate of the 50% mark by age.

High Achiever Millennial Net Worth By Age

Now that you’ve seen what average is, what does it take to be above average?​ Well, anything better than the chart above is above-average. But I want to give you a stretch goal. I call this the high achiever millennial net worth by age.

How do you get here? A few key areas:

Age

High Achiever Millennial Net Worth

35 (Class of 2003)

$293,021

34 (Class of 2004)

$276,439

33 (Class of 2005)

$258,920

32 (Class of 2006)

$242,111

31 (Class of 2007)

$224,690

30 (Class of 2008)

$207,183

29 (Class of 2009)

$189,953

28 (Class of 2010)

$173,074

27 (Class of 2011)

$156,513

26 (Class of 2012)

$139,572

25 (Class of 2013)

$121,592

24 (Class of 2014)

$103,178

23 (Class of 2015)

$83,626

22 (Class of 2016)

$41,518

21

$28,915

20

$20,879

19

$16,542

18

$11,221

What are some of your thoughts on this? Do you think an 18 year old can have $11,000 saved up? I think it’s definitely possible – especially the high achievers that started working at 16 (or earlier) and saved a bunch.

I think that these high achiever net worth amounts are very do-able. They are a stretch, but not unheard of. And these amounts will clearly make you above average.​

How To Boost Your Net Worth

​Now that you know the average and above average net worth, how do you get there? It’s time to start looking at ways to boost your net worth.

​The great thing is that you’re still young and you have a ton of time on your side. Time is the biggest ally you have in building wealth. But if you want to grow it (and fast), here are two more key areas to focus on.

​Boosting Your Income – As mentioned earlier, income is one of the key drivers in building assets and eliminating debt. The more income you have, the easier it is to grow your net worth. I want to challenge you to earn at least an extra $100 per month. We have a great list of ideas to get started. I’m a firm believer that everyone can earn more if they try.

​Eliminating Your Debt – One of the biggest struggles millennials have is overcoming a negative net worth and making it positive. Eliminating that student loan debt is key. Leverage your additional income but also look at student loan repayment strategies to help lower that debt.

Conclusion

​The fact is not everyone is average or above average when it comes to net worth. But knowing where you stand is incredibly important. It can validate your current financial plan, or it could provide motivation for you to make financial changes in your life.

​Don’t be discouraged if you’re not hitting the bar yet. Follow the strategies we discussed and start working towards building real wealth.

What are your thoughts? Are you a millennials that’s above average or below? What do you think is the driver of that?​

– stock investing for dummies

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