While many super successful people write about becoming a millionaire by 30, I’m only able to tell my story about becoming a hundred thousandaire at 30 – and when I say ONLY, I hope you can sense the sarcasm because it’s a pretty great position to be in. For those not familiar with the hundred thousandaire terminology, it’s one who has achieved a $100k net worth. Look it up on Urban Dictionary, it’s a thing.
Quick definition of net worth – these are your assets minus your liabilities. Basically, take anything of value (ex. house, car, jewelry, investments, cash) and add that all up. Then you subtract all of your debts. (ex. student loans, car loans, mortgage, etc.)
Net Worth = Assets – Liabilities
I reached the $100k milestone a little while ago now, roughly 2 years ago, maybe a little less. Since this site didn’t exist then, I’m telling the story now. Reaching a $100k net worth took a lot of things. There was no magic bullet. Plus, I was the last one who ever looked too far ahead into the future as many 20-somethings tend to not do.
I recognize I could have done things much differently and saved more for the future, but what’s done is done. I have no desire to change the past and only hope to better my future – maybe you do too? Or, maybe you’re ahead of the game!
Way Ahead Of The Game
It doesn’t matter that I’m not a millionaire, because I’m way ahead, especially from a global perspective. According to the U.S. Census Bureau, this is the median net worth in the US by age:
Median Net Worth By Age
Less than 35 years – $6,900 <- Here’s where I fit in
35 to 44 years – $45,740
45 to 54 years – $100,404
55 to 64 years – $164,498
65 to 69 years – $193,833
70 to 74 years – $225,390
75 and over – $197,758
As you can see, having $100k by 30 is no minor feat. In fact, that’s enough to fit in the ’45 to 54 years’ category. That’s a 20 year head start… I’ll take it!
The Starting Point
Starting from the beginning of my personal path – I had two general career directions, take up a trade or go to college. I opted for college thinking that my future would be a little brighter with a little less back-breaking work – and it has.
I have no regrets, although I still can’t help but think what would have happened if I would have taken up a trade instead.
That would have been 4 years ahead financially with no hanging debt over my head. Since I took a year break in between due to some personal things, it actually took me 5 years to complete school.
In fact, I bet that I would have even beat myself to the $100k race, although the odds are against me according to the Census Bureau…
Median Net Worth By Education
No high school diploma – $5,010
High school graduate only – $36,795
Some college, no degree – $36,729 <- Had I not gone to college
Associate’s degree – $66,943
Bachelor’s degree – $147,578
Graduate or professional degree – $325,400
So had I not gone to college, then the odds say I’m likely to have less in savings.
Since I took some courses in high school that were at a local college, technically I’d fit into the ‘some college, no degree’ category as I highlighted above.
These stats are by overall population too, not even by age, so that number is likely a LOT less if you include age groups.
In the end, I got what I wished for – great pay, comfy desk job, and nobody breathing down my neck. What I didn’t know was how much I’d hate sitting behind a computer for 8 hours a day while contemplating, “This is the rest of my life!?”
I’m sure at least a few of you can relate. As we look at FIRE as not being “normal” then I think many of us can also recognize the fact that having a desk job also isn’t normal in the history of mankind.
We’re in uncharted waters people!
If I Didn’t Go To College
Had I not gone to college then I would have gotten involved in a trade, specifically HVAC. After all, heating and air conditioning is pretty important in this modern age and college isn’t for everyone.
Considering the apprenticeship would have lasted about 4 years, I would have probably completed it before I finished college. That would have left me a year ahead and making ~$60k a year.
Unfortunately, I graduated during the recession.
The reality was that I made ~$32k starting out of school and it took me 6 months to even find a job related to my degree. I was even forced to move out of the state in order to get the needed experience.
Making $60k a year and with no debt and a year ahead would have been pretty fantastic. In fact, with no debt I can only assume I would have started saving earlier. I may have already even had savings by the end of the apprenticeship.
Then again, at the time, major layoffs were happening. My brother was in the carpenter’s union and even the most experienced had trouble holding jobs. It’s possible I’d have ended up in a similar situation.
The thing is, in reality it only took 18 months after college to match the $60k salary and two years after that to hit the HVAC top earners at $80k. Had I stuck with HVAC, I would have hit the ceiling short of starting my own business.
Maybe I wouldn’t have beat myself to the $100k race…
How Long It Took
It actually took quite some time to get my priorities straight to start saving – somewhere in the neighborhood of 7 years out of college. My hatred of debt helped as I wiped out my credit card and college loans roughly 2 years after college was over.
From hitting the reset button at $0 to a $100k net worth, it took 4-5 years if you do the quick math.
Fortunately, even though I diddled around for a few years, I did make some big moves. From a career standpoint, my salary had increased by quite a bit.
Starting out on my own as an independent consultant, I had almost nothing in the bank. In fact, I had just enough for a deposit on a new place to live.
- Year 0 – Started career (-$30,000 in debt) with a salary of $32,000
- Year 1 – Changed jobs and doubled salary to $60,000 (-$20,000 in debt)
- Year 2 – Continuing my career and paying off debt with salary at $62,000 (-$10,000)
- Year 3 – Received large raise and bumped salary to $80,000 while paying off student loans! ($12k net worth)
- Year 4 – Another slight pay bump, ran a marathon, and saved a few dollars ($23k net worth)
- Year 5 – Became an independent consultant, resulted in large monetary increase ($50k net worth)
- Year 6 – Independent consulting is doing well and by end of year I hit $100k Net Worth.
These are totally rough numbers, but I think they’re fairly accurate without pulling the books. That’s how I did it, nothing too fancy about it.
How I Compare To The “Above Average” American
Before I get into final thoughts, I found an interesting article from Financial Samurai titled, The Above Average Net Worth For The Above Average Person. In the article, it provides the following chart:
I’m not necessarily a fan of the assumption that there is no student loan debt, but the chart is meant for an “Above Average Person” so in that regard it makes sense.
You can see I missed the mark by quite a bit – not that it’s a contest. I think healthy competition and comparisons are fine, but you also shouldn’t dwell on it if you aren’t close either.
This sets myself up for concrete goals to shoot for as I look toward the future. I have roughly 3 years at this point to hit the ’35yo – $429k’ category numbers, which is doable, but no one can predict how the markets will behave in the next few years.
That’s how I did it 20 years before the typical American – nothing magic. Just a combination of:
- Debt hatred
- Career driven salary increases
- Not having kids yet
- Shift in savings mentality
- Starting to invest the money
In reality, I could have done better as I know I wasn’t a savvy investor or saver through most of my 20’s.
In order to hit a $100k net worth at 30 you would need a little over a thousand dollars a month in savings after graduating at 22 – assuming no investments.
Out of college you have 8 years to hit that $100k mark. If you assume a 7% return by putting that money into index funds then you would need about $788 saved per month to do what I did by 30 years old.
Oh, the magic of compound interest!
Now you only have to put in $200 a month for the next 30 years to become a millionaire by 60! Or if you save up $132k by 30 then you could contribute NOTHING additional and have that million by 60.
Just DON’T TOUCH IT!!!
How you do you slice up to the average American? Or are you closer to the above average American?