I was having an interesting debate with some friends over the weekend about what is considered being “well off” these days? Especially, what do you consider to be well off at 30? What about 40 or 50?
While there were a variety of answers, I think that having $150,000 in cash and investments (not including a house) would be considered well off at thirty. By 40, I felt that one should have around $400,000 in cash and investments, and by 50, it should be $750,000.
Why does this matter? At 30, it doesn’t really, but I think that people really want to know if they are “well off” or not. Just like reading how people make money or how much they have can be fascinating, it is nice to know how you are doing compared to others. Also, there was a lot of talk about what assets you consider: cash, investments, a house, what about other property or a business maybe?
So, readers, what do you consider “well off” at 30, 40, or 50? What to you consider to be part of the “pie” to be included in this. I would love to hear your responses.
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 39 comments… read them below or add one }
I would consider well off to be financially free with the ability to generate passive income whether you work or not.
At 30 I would consider 50K a year of passive income to be well off. That could include dividend payments, cash flow from real estate etc. And a net worth of at least 300K.
At 40 at least 65K passive and net worth of at least 500K
At 50 at least 80K passive income and net worth of at least 800K
I didn’t even think about including passive income generation. Good call.
Wow. I think $150k by 30 is pretty lofty! Most of my friends will still have school loans at that point! Now, I think the numbers at 50 are a little low. $1 mil should really be attainable at that point.
For me, I’m shooting for a house that’s fully paid off and $50k in investments. From that point, I’ll have absolutely no debt and will go gangbusters on my passive income investments.
No debt is so important. If you are debt free, you can do so much!
I think that if you are debt free and regularly investing by 30, you are miles ahead of ordinary.
By 40, I think that being a homeowner w/ around $300-400k in retirement would be an awesome start.
By 50, being completely mortgage free with around a cool $1 Million would be awesome.
FYSA must be in her 20s. 50k in passive income is extremely difficult to achieve. If you have 50k in passive income, you probably have over 1 million net worth. I don’t know anyone who has 50k in passive income… Well, I guess those people don’t share their finance.
Well off isn’t rich so I’ll go with these below.
30 – 150k, same as yours.
40 – 1 million net worth not counting primary residence
50 – 2 million net worth not counting primary residence
I would agree that well-off doesn’t necessarily mean rich. You can be well off and not uber wealthy.
I think you’re well off if you can set aside money to meet all of your financial goals each month and still have room to splurge. So by my definition the absolute amount will vary significantly.
I’d actually say $150k would be too low to be impressive to me by 30. $250-500k would be my mark. FSYA’s works out to around $1.5mil by 30 which is pretty intense! You’d have to be making big bucks to get there since you have no time to compound.
As for 40 and 50 I’m going to agree with Retire by 40 and go for $1 and $2 mil respectively.
I agree. At 30, well-off would probably be around $150,000 in assets. At 40, $500,000 would be pretty well off, but I think that at that age, salary/income also plays a factor. At 40-50, I would consider well off being a salary of >$200,000 per year.
Whether you ask people what is well off, rich or wealthy, the answers are usually all over the place. Being a millionaire is thought of as well off at almost any age, but it isn’t really enough money to change your lifestyle. It takes somewhere around $5-7 million to think of yourself as rich or wealthy. Probably, when I am there it won’t be enough. It seems it is a moving target and subject to opinion!
I don’t know if there’s a number, because everyone’s situation is different. If you have a home you’re going to stay in, you need less than someone who is going to be moving in the near future.
$150,000 in net worth at 30 is certainly attainable for me, but there’s a long way to go before I can determine whether that’d going to happen, and I’m sure several life events will happen in that time as well.
Well off at 30, I think, includes no student loan debt, no debt at all really, and some money in the bank. I think people really underestimate a positive net worth haha.
Definitely should not have student loan debt!
$50,000 in true passive income is very difficult to achieve by 30. You’ll need close to $2 mil liquid at a 2.5% guaranteed return.
I’m pretty sure everybody here will be a millionaire by 50!
Very true. That may be my goal at about 50, but not 30!
Maybe it’s me, but I think 150k, not including a residence, is very wealthy for a 30 year old. Assuming you started with nothing, and began work right out of college at 24, that gives you 6 years to put away 150k…about 25k a year, though this calculation does not include any investment return. Still, that’s some serious saving!
I’m 27, and consider myself well off – I pay my bills, have very little debt, save and invest regularly, and splurge here and there. I have family and friends and my health. What else could I ask for?
You also have to remember that you don’t necessarily star making money after graduating college. I worked I’n high school and college and had a nice amount in the bank by the time I graduated college.
I’d agree with your numbers for the most part but I also think that your debt levels play such an important role in this. $150k in assets doesn’t mean much if you’ve got $200k in debt. I’d say if you’re debt free at any age, you’ve got a great start to being well off. Add in $150k at age 30, $500k at age 40, $750k at age 50 and you’re really doing well!
I think that 150k by 30 is a good number. If you don’t have student loans or other debt coming out of college, and you don’t chase after a house, then it can be done. If you graduate at 21 or 22, then you have 8 years to get it done.
Since you most likely won’t have many financial obligations, putting away less than $20,000 a year is doable!
Let me add that being “well-off” to me includes being debt free, and having some income that you can control (even if it’s not technically “passive”).
First off: It’s awesome that I’m part of the group you are in also because your blog is just one of those blogs I really enjoy but rarely find the time to sit down for.
Hmmm for being well-off I don’t consider just cash, I would include assets… investments. For a 30year old in my area I would call someone with a networth of $500000+ welloff
I think $150k excluding home equity would be more than well off at 30 years old. Well, at least in my part of the US. I’d want that much more more, though, since saving earlier is way better than saving 5x as much later.
I’d probably shoot lower at 30, maybe $100,000. By 40, $400,000 is reasonable, assuming you’ve been married and contributing max to 401k and IRA (practically zero return here!). By 50, $1M, at a minimum.
I like the passive income model too. Even though I earn a good salary I wouldn’t consider myself “well off” at any age until I could quit working for long periods of time without any real financial hardships resulting from that kind of move.
If you’re in your 30′s and single, you’re passive income welloffidness could be as little as $30K/year if you live a modest lifestyle (Thinking early retirement extreme guy). However, if you have a family to support and/or if you are in the sandwich generation and taking care of elderly family members, I think that number has got to be much higher. Depending on the age of your parents you may need your most income in your 40′s or 50′s.
Suze Orman always does this segment every week called “How am I doing” and I’m always amazed at how many low grades she gives to 30-yr old’s with a 100K or so in retirement.
I shared this article with my Twitter family too…
Yes, she does give low grades, but a lot of them also skip on basics like insurance and estate planning documents.
I think well off is not a number, it is having enough money to save about 20% plus have all your needs and some of your wants covered.
I love your reply!! Yes, “well off” is having zero debt, and enough income to save 20 percent or more, plus live a lifestyle that’s reasonable, by your own standards.
I really don’t think you need to have zero debt, how is someone with a mortgage less well off then a person who pays the same amount in rent?
Very true. I’ve never thought about that before.
I think $150,000 cash at 30 is considered well-off already since not many 30-year old person can achieve that. There are a lot of people who are still undecided on what career they want to pursue at that age and some are probably in deep debt or just not saving enough.
It doesn’t have to be cash. It could include 401(k) and such as well.
You know, I think well off at any age would include being out of debt and having a positive net worth. Beyond that, I think it would mean not having to worry about being able to do the things you enjoy. I don’t think there’s a specific dollar figure that goes with that particularly.
This is such a hard question to answer since everyone’s vision of well off is different. For me, someone in that age range, I think well off is being debt free. Most of our friends still owe student loans and don’t own a home yet or have any savings. My hubby and I are debt free, have savings, and own a home. We also plan to retire early and so we save accordingly.
I can’t imagine having $150,000 at age 30.
I think achieving that would assume that you started working at 22, without taking any breaks or any time off, and consistently earned a solid income ($50k/year or more).
Even still, at that rate you’d need to save $18,750 a year for those 8 years (which would be a huge percentage of your income). That might only be possible if your employer sponsored a very generous 401K match.
Am I missing something? How else is $150K by age 30 achievable?
Its doable. I’ve got quite a bit more than that and no debt. I drive a beat to death old car, live in a small rental and wear old clothes when I’m not at work. I see my friends in the industry dressing nice and driving new cars and I think i’d really love to have that but even more I want to retire at 55 and travel. It helps to make 170k a year.
I just found your blog and this was a fantastic question which I’ve asked myself in the past.
The philosophy i think works best in this situation is taking a multiple of your household salary to your net worth.
For example I think that:
At 30 a multiple of 2 for you salary would be considered well off (so if you made 75k per year then 150k net worth would be great)
At 40 a multiple of 10 would be considered well off (so at 75k then 750k would be great)
& at 50 a multiple of 20 would be well off (75k to 1.5million)
Obviously as you earn more it gets harder to reach, but this way a doctor would be held to a different standard than a mechanic (since they would obviously have different ideas of ‘well off’).
That is a great philosophy. I would include no debt as well with that, but I agree that you should consider higher earners in a different bracket.
Offhand, I’d say that well off in my view means:
@30, $250,000 in net worth, not counting equity in one’s primary residence.
@40, $1,000,000 in net worth, not counting equity in one’s primary residence.
@50, $3,000,000 in net worth, not counting equity in one’s primary residence.
All values represented above in 2010 dollars, so they’d all be indexed for inflation to higher numbers.
Yes, these numbers are aggressive, and most people are doing way better than average even if they only have half or so of these values. Almost all things are relative, but that’s what “well off” means in my view, roughly speaking.
We are 40 -paid off 200000 house 80000 in 403s and roths. 15000 in cash. Wondering were we stand.