Here’s What Your Net Worth Should Be At 25 Years Old

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What Should My Net Worth Be At Age 25?
Are you wondering what should my net worth be at age 25? Good for you as it’s important to get an idea of where your net worth stands in relation to other 25-year-olds. After all, everything is relative in personal finance.
At age 25, you’ve still got your entire career and money-making life ahead of you. The key at age 25 is to know and follow the fundamentals of personal finance. You’ve got time on your side. With a great habit of saving and investing for several decades, you will be amazed at how big your net worth will grow!
The Average Net Worth At Age 25
According to CNN Money, the average net worth for the following ages in 2021 are:
- $9,000 for ages 25-34
- $52,000 for ages 35-44, $100,000 for ages 45-54
- $180,000 for ages 55-64
- $232,000+ for 65+
Therefore, it’s safe to say that the average net worth of a 25 year old is closer to $0than it is to $9,000, given the age range includes 25-34. An average net worth of $0 at age 25 sounds kind of sad. However, due to student loan debt and credit card debt, it’s understandable.
With only several years of employment out of college, the average 25 doesn’t make or have a lot of money. Some 25-year-olds weren’t able to get a great job due to a pandemic. A large percentage of 25-year-olds have had to live back home with their parents. Thankfully, the economy is recovering.
All this said, I believe the above average 25-year-old should have a net worth of closer to $80,000. Let me share with you why I believe a financially save 25-year-old should have this amount.
The Above Average Net Worth At 25
To achieve the above average net worth of $80,000 for a 25-year-old, you need to be and do above average things. Here are some attributes of an above average person:
1) Someone who went to college and believes grades and a good work ethic do matter.
2) Does not irrationally spend more than they make.
3) Saves for the future because they realize at some point they no longer are willing or able to work.
4) Takes responsibility for their own actions when things go wrong and learns from the situation to make things better.
5) Takes action by leveraging free tools on the internet to track their net worth, minimize investment fees, manage their budget, and stay on top of their finances in general. Once you know where all your money is, it becomes much easier to optimize your wealth and make it grow.
6) Welcomes constructive criticism and is not overly sensitive from friends, loved ones, and strangers in order to keep improving. Keeping an open mind is critical.
7) Has a healthy amount of self-esteem to be able to lead change and believe in themselves.
8) Enjoys empowering themselves through learning, whether it be through books, personal finance blogs, magazines, seminars, continuing education and so forth.
9) Has little-to-no student loan debt due to scholarships, part-time work, or help from their parents. Our parents have saved and invested through the largest bull market in history. It’s understandable that parents want to help their children out.
Now that we have a rough definition of what “above average” means, we can take a look at the tables I’ve constructed based on the tens of thousands of past comments by you and posts I’ve written to highlight the average net worth of the above average person.
The Above Average Net Worth Calculated
First, we must highlight what the average tax-deferred retirement savings plan is for those in America. We’ll focus on the simple 401K system we have here where one can contribute a maximum of $19,500 of their pre-tax income every year in 2020.
Being only 25 is a huge competitive advantage to allow for compounding to work its magic. Compounding is the greatest force in investing. Most of Warren Buffet’s wealth was created after his 60th birthday!
This chart can be used as a rough estimate for those with the RRSP plan in Canada, and retirement plans in Europe and Australia as well.
In fact, any country that has any sort of tax-deferred retirement plan and social safety net program for retirement that has a GDP/capita of $30,000 or more can use the below chart as an aspirational guide. Remember, we are talking about the “above average person.”
Financial Samurai 401k Savings Potential Guide

For example, when I started contributing to my 401k in 1999, the maximum contribution limit was only $10,000. As a 39 year old, I’ll focus on the Mid End column as a guidance.
This chart does not take into consideration any after-tax savings post 401K contribution or 401k company matching either to remain conservative. It’s always good to end up with too much money than too little.
Financial Samurai Post-Tax Savings Guide

The Importance Of Real Estate In Building Wealth
A 2020 study showed that the average net worth of a homeowner is roughly $200,000. This is 40X greater than the average renter’s net worth of $5,000. We can debate the merits of this study (done by a real estate association of course) all day long (demographic sampling, housing price changes, etc). However, the point is, “above average” people generally all own homes and are wealthier, be it 2X wealthier or 40X wealthier than the average renter.
The return on rent is always -100%. You get a place to live and that’s that. There is never a positive return on an asset after a month, or 30 years of renting. A renter cannot pass on her paid off house to her kids or grandchildren. There is no asset accumulation at all. There is a reason why some 97% of millionaires are property owners.
If you are 25-years-old or thereabouts, your mission should be to try and find a stable job and get neutral real estate by owning your primary residence. If you rent, you are SHORT the real estate market, which is unwise long-term.
How To Buy Real Estate
If you can’t afford to buy a primary residence in your 20s (or don’t want to), then you can still invest in real estate through publicly-traded REITs or private eREITs from a firm like Fundrise.
Your goal is to gain exposure to real estate so you don’t fall too far behind as you are building your downpayment. Ideally, you want real estate to decline in your 20s to get a good deal. However, at the very least you can do is ride the ups and downs of the real estate market.
Hence, let’s construct an equity value chart of something based on a range of $250,000-$500,000, with the assumption that upon retirement, you have your house paid off and can attribute this amount into your net worth, or the capitalized value of all rents you would pay if you did not own.
Financial Samurai Home Equity Accumulation Guide

It can be calculated as the present value of those future rental payments, or simply the market value of the home. I assume zero price appreciation on the home to keep things conservative and no extra payments to accelerate the payoff either.
Home prices have historically returned just a bit above inflation every year e.g. 2-3%. But given the above average person puts down about 20%, the 2-3% returns suddenly turns into a 10%-15% cash-on-cash per year.
10-15% compares favorably to the average S&P 500 return of roughly 8%. Add on the tax benefits for mortgage interest deduction and owning a home through a mortgage becomes very beneficial for higher income earners.
The X Factor Is What Every 25-Year-Old Needs
So far, we’ve touched upon pre-tax savings, after-tax savings, investment returns of 0 for those savings to remain conservative, and real estate. You need to spend less than you earn for that inevitable day you no longer have an income.
You also need to live somewhere, hence, you should own your property if you know you will be there for much longer than 5-10 years.
There’s something missing in all of this, and that something is what I call the X-Factor. Above average people seem to always be thinking of new ways to build wealth. There is an optimism about them that no matter what happens, they can always find ways to make more money.
It’s hard to quantify what that X Factor is for the average above average person, but it’s there somehow through music, writing, athletics, communication, entrepreneurship, side hustling, and so much more.
Your X-Factor might very well be working 80+ hours a week like the analysts in investment banking, managing consulting, and big law. While you are young and have the energy is when you need to work extra hard. Once you do, you will likely be on your way to a top 1% income eventually. You’ll then get to coast more easily when you are older.
Given savings and building equity in your home over the next several decades is largely automatic, the X Factor comes out because you have so much more free time to do something else!
The Above Average Net Worth For A 25 Year Old
I have gone ahead and averaged the averages for pre-tax savings, post-tax savings, and real estate equity progress in the spreadsheet below. The pre and post tax savings can be invested however you see fit and is a topic of another post.
Another thing to note is taxation, given pre-tax savings have to eventually be withdrawn and taxed. Again, these are rough estimates to give you an idea of the average net worth of the above average person.

There is NO REWIND button in life. With a continued low interest rate environment, it’s more important than ever to save until it hurts each month. You won’t regret it when you no longer want to work!
Manage Your Finances In One Place
The best way to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts on their Dashboard. This way, you can see where you can optimize your finances.
Before Personal Capital, I had to log into eight different systems to track 28 different accounts to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing. I can also check how my net worth is progressing. You also get your net worth amount sent to your inbox weekly.
One of their best tools is the 401K Fee Analyzer. It has helped me save over $1,700 in annual portfolio fees I had no idea I was paying. You just click on the Investment Tab and run your portfolio through their fee analyzer with one click of the button.
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