What is the ideal net worth for my age?
This is a common question for those who start investing, and there are many ways to answer it. Below, we will see a simple method widely used by various financial advisors which takes into account your age and lifestyle.
Ideal Net Worth = Monthly Expense x Age x 12 x (10% ~ 20%)
For example, imagine that a 21-year-old has a monthly expense of $ 1,500.00. Applying this formula, we would have:
Ideal Net Worth = $ 1,500.00 x 21 x 12 x (10% ~ 20%)
Ideal Net Worth = $ 37,800.00 ~ $ 75,600.00
In other words, for a 21-year-old person with a monthly expense of R$ 1,500.00, the ideal net worth would be between R$ 37,800.00 and R$ 56,700.00. Of course, it is difficult for 21-year-olds to have this net worth, as they are typically still studying or just starting their professional life, but this is just a basic guideline.
| Age | Ideal Net Worth |
|---|---|
| 20 years old | Between $ 72,000.00 and $ 144,000.00 |
| 25 years old | Between $ 90,000.00 and $ 180,000.00 |
| 30 years old | Between $ 108,000.00 and $ 216,000.00 |
| 35 years old | Between $ 126,000.00 and $ 252,000.00 |
| 40 years old | Between $ 144,000.00 and $ 288,000.00 |
| 45 years old | Between $ 162,000.00 and $ 324,000.00 |
| 50 years old | Between $ 180,000.00 and $ 360,000.00 |
We must also take into account that each person is at a different moment in life. For example, a person studying medicine will spend many years without making any money, but she will likely be able to make up for this once they start working in their field.
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