Comments on: Net Worth By Age Is Meaningless

By: Jeff Haw

Jeff Haw — Thu, 17 Nov 2011 14:46:15 +0000

Yawn….
25 Yr
NW: ~450k (dependant on stock market and housing flux)

By: James Patrick

James Patrick — Thu, 01 Sep 2011 07:18:09 +0000

Me: 50
Networth: $230,001

By: Patrick

Patrick — Fri, 20 May 2011 17:57:01 +0000

Me: 25
Net worth: $115,001

By: Asad

Asad — Wed, 10 Mar 2010 20:46:42 +0000

No Ken,
You missed the point here. (Net worth by salary would mean that people who are making as much as you do which is 75K have a net worth of $244,100. Do keep in mind that they might be working for a long time probably much longer than you). So be happy and proud of yourself that you are making much more that most people did. I do believe though that the number seem too low to be true but cant comment on that.

By: James

James — Tue, 23 Jun 2009 03:46:32 +0000

Me: 25
Net worth: $115,000
I’m doing aight! Keep cool my babies.

By: Reg

Reg — Tue, 12 May 2009 15:20:11 +0000

The problem is that 94.8% of all statistics are completely made up. wink wink

By: getagrip

getagrip — Tue, 05 May 2009 12:23:25 +0000

Networth comparisions to others can be used to help motivate you or think of areas in general you may want to adjust, but really, they’re only practical use is to give you a snapshot of how you’re doing today. Take enough snapshots and you can trend how you’ve been doing over the years. To me their best use is not in comparing yourself to others, but to allow you to see your own progress over time, where you’re succeeding, where you need to do better, and how things that may have happened in your life have affected it. Sometimes we get bogged down in the weeds and need to step back and look at the bigger picture, and they’re one way to do that. They’re just another tool in the financial tool kit.

By: kitty

kitty — Sat, 21 Jun 2008 20:58:07 +0000

My problem with these chartsis that they take each parameter – in this case age and income – separately. A more interesting number would be a function of both income and age – people of this age with these income i.e. f(age,income). But they way they do it, and the way a similar table they had before did it, was to give you f(age) and f(income).

49, current income – low 6 digits
net worth by age: 109K — but this includes 49 year olds with very low income
net worth by income 363K – but this includes young people who are just starting high paying jobs with tons of student loan debt

My real net worth is considerably higher than either of these numbers, but I’d imagine if they were to look only at 49 year olds earning 100K-something, the number would be much closer.

Also salary isn’t a constant. People get raises, change jobs, etc. Someone earning 40K one year and 100K the next isn’t likely to have the same net worth as someone who earned 100K for many years.

CNN money also had once a table which listed net worth by various categories – age, education, profession, etc. But again, they also gave median net worth for each parameter separately. I came out ahead in all categories, but I suspect if they only looked at these parameters together, this may not have been the case.

By: Meg

Meg — Sat, 21 Jun 2008 00:56:57 +0000

Guys, it’s not a calculator. It is a graphical illustration of the median net worth – you can look at it by age, or by income. The only thing that changes with your inputs is which column they highlight to show you where you fall.

That said, I find it exactly as helpful as it’s meant to be. If you’re interested to know the median net worth of people your age – or in your income bracket – then this chart tells you that.

I find it interesting that the numbers are as high as they are. HALF of all people 55-64 have more than $200K in net worth. And HALF of all people under 25 have more than $600 in net worth. To listen to the media you’d think the median net worth for that age group is way negative because of credit card debt and student loans.

By: Jay

Jay — Fri, 20 Jun 2008 20:40:12 +0000

It’s a shame when a company as respected as CNN puts something as shoddy as this net worth calculator out. If you’ve never seen or used tools like these, it makes them seem completely worthless. Even worse, if you’re gullible enough to put any stock in the results, it can be very misleading and make you think you’re doing much better (or much worse) regarding retirement planning than you actually are.

I agree with you, Jim, this tool is crap, but your post brings up an important topic. Can you find great retirement planning, budget & debt management, and portfolio tools on the internet? Yes, you definitely can. Stick with well known sites like Morningstar. Their reputation is based on their planning/investing tools and you can count on high quality products. My personal favorite is the Portfolio X-Ray, you will know SO much more about how your goals match your actual behavior after you put your portfolio through this tool.

Unfortunately a lot of investing research sites charge a monthly subscription fee for their high-octane products, but I recently found out that you can get free access to just about any of these tools if you happen to sign up for the right online brokerage. For example, Ameritrade bought in all of the Morningstar products so you can use the portfolio X-Ray for free if your one of their clients, no need to pay Morningstar a monthly subscription.

Online brokerages are probably one of the best ways to get free access to powerful budgeting, planning and investing tools, because most sites maintain an amazing variety to attract new investors. Even better, if you can’t figure out how to use any of the tools, there are always customer service reps (who are usually brokers or planners) available to teach you whatever you care to learn as long as you’re a client. Free stuff is cool. (-:

Jay

By: Lord

Lord — Thu, 19 Jun 2008 19:22:57 +0000

I agree that one is a lost cause. What difference does it make how well you are doing relative to others if they are all doing badly? What you want to know is if you are making your goals. A much more relevant one would consider your age, retirement age, income, wealth, savings rate, the replacement rate needed in retirement, expected return, and tell you if your savings rate is too low, your retirement age is too low, etc. Those are hard to judge if young, but will at least put some perspective on them.

By: Toby Ludwick

Toby Ludwick — Thu, 19 Jun 2008 19:05:18 +0000

Ken:

I agree that the CNN Money tool is confusing and doesn’t make much sense.

Net Worth IQ looks a little biased because those who put up the numbers there (see their profile stats) are mostly highly educated professionals.

A couple weeks ago, the following blog showed a net worth distribution chart by age group: http://www.goodmoneyblog.com/archives/2008/06/how-far-are-you-from-being-rich/

According to that chart, for you who’s 25, you’re at the top 25% of the age group 20-29.

Age is not the single criteria for such a comparison but it’s a fact that we like to compare us with those who are as old as us, right? For instance, we compare us with friends, peers, or co-workers around us, whether they’re married or have kids.

By: Ken

Ken — Thu, 19 Jun 2008 16:12:32 +0000

Also i enjoy this a little more.

https://www.networthiq.com/

It lets you compare by more than just age and salary. Although not too much more categories. But at least you can see other peoples whole situation.

By: Ken

Ken — Thu, 19 Jun 2008 16:11:23 +0000

I hate these net worth calculators. They are never right.

Me age 25, salary $75,000
Net Worth by age $2,125
Net Worth by salary $244,100
Actual net worth $53,000

If I were to try and hit the net worth by salary money that means i would have to of saved every penny i earned since college and payed no taxes, and i would still be short.

Net worth by age, I save that per month between 401k, IRA and cash.

By: Pinyo

Pinyo — Thu, 19 Jun 2008 14:01:06 +0000

i like these tools, but mainly for its entertainment value.