After first getting married to my sweetheart, our net worth was in the negatives for sure, especially because of all of the student debt I had acquired.
Through patience, continual learning, and discipline, we have been able to turn our net worth into a positive number!
During our 4 years and a half years of marriage, we used the debt snowball method and investing to help me graduate student debt-free with my MBA and build a total of $350,000 net worth.
Right now, my wife is 25 and I am 27 years old. We are completely debt-free except for our two real estate property loans.
Before breaking down our $350,000 net worth, I want to share some interesting statistics.
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So what is the average net worth by age for Americans?
Let’s see the average net worth by age for Americans according to CNBC.
- For those under age 35, the average net worth of Americans is $76,300.
- For those ages 35 to 44, the average net worth of Americans is $436,200.
- For those ages 45 to 54, the average net worth of Americans is $833,200.
- For those ages 55 to 64, the average net worth of Americans is $1,175,900.
- For those ages 55 to 64, the average net worth of Americans is $1,217,700.
- For those ages 75 and above, the average net worth of Americans is $977,600.
Table of Contents
What is Net Worth?
Net worth is the total value of all assets, minus the total of all liabilities.
In other words, net worth is everything you own minus all that you owe.
How to Calculate Net Worth?
Basically, the equation is NET WORTH = ASSETS – LIABILITIES.
Examples of Assets: real estate, checking accounts, saving accounts, retirement accounts, etc.
Examples of Liabilities: real estate loans, student loans, credit card debts, car loans, etc.
Our Net Worth Breakdown
1) Checking Accounts: $5000
We have two checking accounts, one for me and one for Shan. We have a total of $5000 combined between both of our checking accounts.
Our goal is to not put a lot of money into our checking accounts but is to keep a little more than our total monthly expenses.
2) Saving Accounts: $10,000
We also have 2 saving accounts, one for me and one for Shan. In total, we have $10,000 saved up for both of our savings accounts combined.
We use this money for big purchases such as saving up for a new home, travel, etc.
3) High Yield Saving Account AKA Emergency Fund: $11,000
We have one high-yield saving account which is also our emergency fund.
Each month we transfer $400 to our High Yield Saving Account / Emergency Fund and will continue to keep transferring money until we have enough savings to cover 6 months of expenses.
Having a fully-funded emergency fund is important to us and provides peace of mind.
4) Retirement/Tax Advantaged Accounts: $72,000
We have two Roth IRA accounts, both of which we max out each year.
One roll-over IRA account is from 2 of my previous employers’ traditional 401K accounts.
We then have two Roth 401K accounts with each of our current employers and contribute enough to our company’s Roth 401Ks to get the company match.
We also have one HSA saving account. My wife and I are on separate health insurance plans. I have an HDHP plan and my company matches part of the money that I put into my HSA. I max out my HSA every year because it has triple tax benefits and can also be a secondary/regular retirement account when you are 65 years old.
Combining all of those retirement accounts totals, we have $76,000.
5) Brokerage Accounts: $2,000
Right now we have one brokerage account and only invest $100 each month in it. We want to invest more in tax-advantaged accounts so that’s why we do not invest a lot in our brokerage account at the moment.
6) Car: $8000
Currently, we only have one car and we don’t have any car loans, woohoo!
One car works great for us, we are very fortunate. My wife works from home permanently and I am on a hybrid schedule where I work in the office on certain days and from home on other days.
To be honest, we both don’t like to count the car as our asset because it decreases in value.
Generally speaking, the car should account as your asset.
7) Primary Residential Property: $130,000
We built a single-family house which is our primary residential property right now.
The new home was under construction in July of 2020. The building process was very cool and took ten months to finish.
We officially closed on our primary residential property in May 2021!
Finishing our entire yard took two months after we moved in. We soon after welcomed our sweet Samoyed puppy named Tofu to the family! We finished our basement next.
Finishing a basement is a lot of work, but I’m learning many valuable handyman skills! A lot we did by ourselves but some parts were hired out.
After checking the current prices in our community, we found the equity in our home to be at least $130,000, especially with the basement and yard done.
8) Rental Property: $120,000
We have one rental property and sold our first townhouse rental a while back.
The rental property we currently own is a cozy 3 bedroom/2 bath condo built-in in 2002.
After first living in the condo for around two years we decided to rent it out. We also did some simple remodeling before renting it out.
Our rental property is giving us around $300 every month in cash flow now.
We checked condos in the same community and can say we have at least $120,000 house equity in it.
Side note: when calculating net worth for home loans you take the current market value minus what you owe on the loan.
| Checking Accounts | $5,000 |
| Savings Accounts | $10,000 |
| High Yield Savings Accounts / Emergency Fund | $11,000 |
| Retirement / Tax-advantaged Accounts | $72,000 |
| Brokerage Accounts | $2,000 |
| Car | $8,000 |
| Primary Residence Property | $130,000 |
| Rental Property | $120,000 |
| TOTAL | $358,000 |
“When you invest, you are buying a day that you don’t have to work.”
Aya Laraya
The past few years have been a very good time to invest in both real estate and the stock market.
We were able to buy a house when the market was slightly cooler, and then watch it increase in value.
The value or equity is still increasing and having rental income as passive income is an amazing thing!
We are so grateful we have been able to make $250,000 profits from our real estate investments with just $20,000 starting in 4 years during college.
We believe diversifying investments is extremely important and not just for real estate. Investing in tax-advantaged accounts is also very important in building our net worth.
Thank you for reading! Please drop a question or comment below – we’d love to hear your thoughts.
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
