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What's up, guys? George Camel here with some fun facts for you. By age 30, you're older than 42% of Americans. On average, you've had 7.5 jobs, and don't pretend you don't know what that .5 is about. You call taking skates out of a roller rink cubby a job? Get a life. And your net worth should be...
Well, that's what we're here to talk about today. You see, we typically have a lot of expectations for who we should be and what we should have accomplished by age 30. And for me at age 34, I have yet to run a marathon or forgive myself for mispronouncing acai for the last decade. But I console myself with the fact that I'm at least still with it. I'm hip. Sure, I still wear skinny jeans, which I know are out. But that big baggy stuff the kids are wearing these days, these parachute pants, it'd make me look like a puppet or a muppet. A muppet.
And yeah, I don't go out anymore, but I used to. It's just that after knowing how much my house costs to live in every day, why would I leave? Plus, every time you leave the house, it's at least a hundred bucks, just gone, as soon as you step out the door. You go out to eat. You know how much they charge for a cardboard gluten-free bun that turns my burger into a sad crumbly salad? Too much. So before we dig into the numbers to find out what your net worth should be, let's prove to the algorithm and all the haters that we're still hip and relevant by clicking that like, subscribe, and share.
Some say it's the new vaping. Vaping is out. Like, share, subscribe is in. So click it or ticket. Let's get to it. Now, first, let's clarify what net worth even means. It's a simple math equation. It's not your opinion. It's just accounting and financial metrics. Net worth is what you own minus what you owe. It's the total value of all of your assets, your house, your cars, your investments, your cash, your collection of Bob Ross originals.
minus your liabilities. Things like credit card debt, student loans, your mortgage, and the remaining $2.82 you owe a firm because you buy now, pay latered a case of Coke. It's a real thing, and I wish it wasn't. So that means your net worth is not just the stuff you have, because you could have a million dollars in cash and investments, but if you also owe a million dollars in debt, you're not a millionaire, you're broke.
And let's also clarify that your net worth has nothing to do with your income. Just because you have a high income does not mean you have a high net worth. And just because you have a low income doesn't mean you have a low net worth. Now, sure, a six-figure salary might help you build your net worth, but it won't lead you to a high net worth unless you're doing the right things with money. So are the 30-year-olds we're talking about today doing the right things to build net worth? Let's find out as we spin the wheel of net worth.
According to Financial Samurai, the average net worth for Americans at age 30 is $8,000, which is sad. But at least it's more than nothing, right? No, that's barely an emergency fund. Not to mention, you've spent years working by this point. In fact, at age 30, you've likely worked around 17,000 hours as a contributing member of society.
and all you have to show for it is $8,000? Man, at that rate, you're averaging about 47 cents an hour. Let that sink in, 47 cents an hour. And while that's a downright shame, it's not shocking, considering that debt is eating up way too many people's net worth. For someone aged 30 to 39, the average consumer debt amount, excluding their mortgage,
is over $23,000. Guys, this is not where I want my 30-year-old brothers and sisters to be in life. I want you to have margin and freedom so you can get a good seven hours of sleep on your memory foam pillow. That's where we should be. So where should you be financially by age 30?
Well, to be truthful, there's no exact figure because everyone's circumstances are different and winning can vary for each of us. But let me play out an A-plus scenario to give you a picture of where your net worth should be. You have no neck pain because of the memory foam pillow. You've graduated college debt-free. You have a paid-for car. You start your career at 22, making $56,000 a year. And you start investing 15% of your income in your company's 401k plans.
So with all that being said, let's crunch some numbers using our net worth calculator. I would like you to crunch those numbers again.
It's a program. There's no such thing as crunch them. Just crunch them, please. And if you want to play along, I'll link that net worth calculator below. So let's start on the asset side and let's go with real estate. Let's say because you're debt free, you're able to save up and put a whopping $50,000 down payment on a $250,000 townhome. Now, over time, that townhome appreciates to $300,000 by age 30, meaning you have a total of $300,000 in real estate assets. Boom.
already at 300 grand. We're looking good so far. So you still have your original mortgage of $200,000 since you put down 50. So your liabilities are $200,000 on our real estate loans. Now let's take into account your checking account. And we'll say you have a thousand bucks in a checking account right now. We're going to add that on the asset side. Now your savings account. You already have an emergency fund of three to six months of expenses, which we're going to call $15,000 in this case. So savings accounts,
15,000. Now let's talk about investing. You've been investing 15% of that $56,000 income from age 22 to 30. Now with the average rate of return, we're gonna call that $100,000 in your 401k. And that's assuming you never got a raise. All right, let's add $100,000 to the retirement accounts. Now we move on to cars. We'll say that you have a paid for 2016 Nissan Rogue that's currently worth about $15,000. We're gonna add that to the cars.
Now we have other assets. This could be the value of antiques, jewelry, stocks, bonds, whatever else you have going on. And for fun, we're going to call this your extensive Bob Ross collection, which is currently worth $5,000. All right, let's see what that brings our total net worth to. Let's calculate that net worth.
$236,000. Incredible. Now, that's an A-plus scenario, assuming you did all the right things in your 20s. And it's likely that your report card looks a little different. And while there's no official ranking, I'm going to create my own scoring system to help you self-assess where you're at. And I'm going to call it the Camel Financial Scoring System, or KFSS for short, or as I like to call it,
- Oh, snack. - Again, there's no shame here, but it's good to know where we stand. So let's start with an F. I'm gonna say you have an F on your report card if you have a negative net worth of $100,000 or more in the negative. I think we all agree that's a bad place to be. Now moving on to the D, a negative net worth of up to $100,000.
A C, we're gonna call that a $0 net worth up to a $10,000 positive net worth. Pretty good, and that puts you at average based on that Financial Samurai data. A B is a net worth of a $10,000 to a $100,000 net worth.
And finally, you'll get an A and a gold star if you have a net worth of six figures or more. If your net worth is 100,000 plus, up to maybe a million or more, that's amazing. You are crushing it. You are doing all the right things with money. Now, don't freak out if you're not an A. Maybe you're more of a C plus student or the type that carefully added a line
to that F to make it an A, no judgment. And your parents weren't fooled. But regardless of what your past looked like, your financial GPA can and will improve if you follow some simple steps. And listen, no one sets out to become broke other than theater majors. Bye-bye, birdie. More like bye-bye, retirement.
I know, I thought you were gonna be in Hamilton too. It didn't work out. But going broke usually happens thanks to life circumstances paired with a series of bad decisions or financial ignorance. A loan here, a bad investment there, a couple of hundred swipes on the credit card later, and you're 30 on a crusty futon with no idea how you landed there.
And even if you're not in totally dire straits like our futon-bound friends, being broke can also look like living paycheck to paycheck with no savings, or being in debt up to your eyeballs, or buying a brand new car because you can afford the monthly payments, but then not having enough in your bank to cover a $1,000 emergency.
I know it sounds grim, but according to the numbers we talked about earlier, we live in a culture where broke is normal and normal sucks. So maybe it's time to be weird. And listen, if you fall into that normal bucket, you don't have to stay there. No matter what age you are, you can turn your finances around. In fact, the people who follow the Ramsey baby steps become debt free in two years or less. It's amazing.
And that's the same plan I followed to knock out $40,000 in consumer debt in 18 months many, many years ago. Now, on average, six months later, you have a fully funded emergency fund saved. So get this. If you follow the Ramsey baby steps, in two to two and a half years, you become completely debt-free with a pile of money in the bank. That is the first step to a higher net worth. Listen, you could be in the same place two years from now if you just do nothing.
So how do you break the mold of normal and build a network that reflects how hard you work? Here's some action steps. Number one, live on less than you make. Make a monthly zero-based budget and take a hard look at your take-home pay and your outgo each month. You've got to live on less than you make in order to build wealth. Number two, buck the system.
Stop following the trends and stop listening to broke people for financial advice. And stop believing that your credit score is some indicator of your financial health. It's debt management, not money management. And stop thinking that leveraging debt is some kind of wealth building hack. Which brings me to my next point, ditch debt. I'm serious. Get rid of it. All of it.
Student loans, credit cards, the car payment. We're getting rid of all of this stuff to free up our greatest wealth building tool, our income. And if you don't know how to get started paying off the debt, I'll drop a link to an article below on the debt snowball method that will walk you through exactly what to do. Number four, invest the right way.
There's a lot of ways to invest, and there's a lot of traps out there. And it's a whole lot simpler than you might think. And it doesn't involve picking the right stocks or the right crypto coins. A retirement account like a 401k or a Roth IRA is what real-life millionaires use to build wealth. And if you want more on this, check out my video called Investing for Beginners. I'll link that below as well. Now, if you're an A-plus student with a $236,000 net worth of 30, keep up the good work.
Heck, make your own YouTube channel. But don't you dare compete with me. I will take you down. Hey, we're all friends here. We're all, it's the creator community. But seriously.
I'll take you down. And if you don't quite know what your net worth is, I recommend finding out immediately. And by immediately, I mean right after this video is finished and you've shared it with a friend in their 30s. You see, knowing your net worth will help you start working toward your financial goals and help you see what challenges you're up against. So check out that net worth calculator I was using earlier to find your number. I will link it below. And I'd love to know how you grade yourself when it comes to your net worth. Thank you guys for watching. I'll see you next time.