Financial position of a 30yr old?

[Tyler Durden]

This is a very, very generalised question, but what are your expectations of a 30 year old's financial situation?

Let's keep it simple, and say net position, so all cash + shares - credit card debts and personal loans. How much savings would you expect a 30yr old to have?

 

[bellenuit]

How much savings would you expect a 30yr old to have?

If you ask "would you expect" as opposed to "should have", I would say no savings or investments, a $5K credit card debt and a $20K car loan debt.

From my experience, using myself and friends when we were that age as examples, that was typical. It wasn't until we married, settled down and had kids that we started to worry about such issues. That isn't to say we were right. If one were to spend half of what one spends on entertainment in our younger years on investments instead, most would be financially independent by their 50s.

What should a 30 year old have? If working continuously from 22 say (degree qualified), a 30 year old should be debt free, have at least $100k in investments ($10k per year invested plus growth). This will enable them to put a 20% deposit on a $500k house. This should be relatively easy to achieve by acting prudently, without being miserly.

 

[Smurf1976]

It depends on the broader circumstances, especially career, of the individual.

If your career really is as a neurosurgeon then thus far you have done and awful lot of study and probably run up some impressive debts. But on the positive side the vast majority of your income is still ahead of you. It is thus reasonable to assume that such a person would have minimal cash or assets, but with lots of $ coming in they ought to be able to build them up in the years ahead.

At the other end of the scale, consider a tradesperson working on construction sites etc. If you are ever going to work lots of overtime then for most people the only real chance to do it is in your 20's. Same goes for jobs done for others on the weekend - by the time you're in your 30's it ceases to be an option to work 7 days a week. At most it might stretch out to age 35 or thereabouts, but it's very rare to find someone still doing it when they're 40. Future income is likely to be lower, not higher, in "real" terms unless you move into a supervisory or management role. If you haven't built up any assets by this stage then the odds are against ever doing so. Hours worked reduce and income goes down meanwhile a mortgage and kids come along - there goes any chance of saving serious money.

So it really depends on your career. If you are in a field where "real" income peaks in your 20's due to working long hours on wages, then you'd better have accumulated some assets before there's any kids (or even a partner in many cases) or it isn't going to happen. Reverse that if you're in a career where income doesn't peak until you're 50+.

 

[burglar]

This is a very, very generalised question, but what are your expectations of a 30 year old's financial situation?

Let's keep it simple, and say net position, so all cash + shares - credit card debts and personal loans. How much savings would you expect a 30yr old to have?

In 1982 when I was 30, I owned a 1975 LH Torana and a mortgage on a red brick house valued @ $22,500
With two children and a spouse we collectively chewed though $10,478 pa.

There wasn't a cent leftover for decades!!

I could not afford to replace the Torrie til 1997.

 

[ROE]

Very broad question...

depend when you born, what your background and career wise...
a formula used by Dr Stanley in the millionaire next door

10% of (Age X Income) = Expected Net worth

say you on 80K and your age is 30

80K x 30 / 10 = 240K

a decent starting point, it's not a perfect formular take that and give or take a bit
from your circumstances..

 

[Bill M]

This is a very, very generalised question, but what are your expectations of a 30 year old's financial situation?

Let's keep it simple, and say net position, so all cash + shares - credit card debts and personal loans. How much savings would you expect a 30yr old to have?

At age 30 I had a 1br unit in Sydney paid off and no other debt. The value of that unit today is around 400k.

Today for an average 30 y/o who say did an apprenticeship for 4 years and has worked 10 years in the trade should have no car or credit card debts outstanding and should be well on the way owning his own home with say 30% paid off already and a kick of cash say 10 to 20k in the bank ready for his/her wedding day or some kind of emergency.

 

[prawn_86]

We are a mid 20's couple and having got the expensive travel and wedding costs out the way would expect to have about 200k in income producing assets (or paid off a family home) between us by the time we are 30.

 

[Bill M]

We are a mid 20's couple and having got the expensive travel and wedding costs out the way would expect to have about 200k in income producing assets (or paid off a family home) between us by the time we are 30.

And that sounds about right to me. You're a pair of hard workers and savers, well done!

 

[So_Cynical]

This is a very, very generalised question, but what are your expectations of a 30 year old's financial situation?

Let's keep it simple, and say net position, so all cash + shares - credit card debts and personal loans. How much savings would you expect a 30yr old to have?

To broad...a 30yr old farm hand with no education living in the central west of NSW or a 30yr working as an accountant in the city.

I would expect the accountant to have a lot more than the farm hand.

 

[Julia]

Too broad...a 30yr old farm hand with no education living in the central west of NSW or a 30yr working as an accountant in the city.

I would expect the accountant to have a lot more than the farm hand.

Yes. It's also going to depend on upbringing, what parental values were imbued into the child.
The example set in a family where the child has only experienced living on welfare is obviously going to be very different from that where a sound work ethic and savings habit is the norm.

A child brought up with the conviction that he is responsible for his success or failure is going to approach life very differently from the child raised with belief that the state owes him everything.

 

[Knobby22]

What should a 30 year old have? If working continuously from 22 say (degree qualified), a 30 year old should be debt free, have at least $100k in investments ($10k per year invested plus growth). This will enable them to put a 20% deposit on a $500k house. This should be relatively easy to achieve by acting prudently, without being miserly.

I think that's about right.

 

[gav]

We are a mid 20's couple and having got the expensive travel and wedding costs out the way would expect to have about 200k in income producing assets (or paid off a family home) between us by the time we are 30.

That's fantastic. If you don't mind me asking, can you explain how you managed to get yourselves into this position?

 

[Ves]

We are a mid 20's couple and having got the expensive travel and wedding costs out the way would expect to have about 200k in income producing assets (or paid off a family home) between us by the time we are 30.

I'm in a pretty similar situation with my partner. It's amazing how many people look at you like it's a super-human feat - I think it says more about others than us.

 

[Knobby22]

If you are a couple, you can save a lot more than a single.

 

[skc]

Too broad a question - I know a couple at 30 who paid off their $500k home, and I know a 32 single who asked me if having $6k in net asset is a lot of money (I told her it is for an 18 yr old - incidentally she's an accountant working in the city)...

But I think if you have saved 8-10% of your income every year of work and with 5-10% growth each year (in interest / return) you would be above average. Doesn't necessarily mean you are in a strong financial position, but at least you are reasonable at managing personal finance.

 

[stewiejp]

To broad...a 30yr old farm hand with no education living in the central west of NSW or a 30yr working as an accountant in the city.

I would expect the accountant to have a lot more than the farm hand.

The farm hand works day and night for a small but honest wage - maybe has room and board thrown into the deal but by the time the week is done he or she is hardly up for a big weekend. Most of the take home pay goes into the bank, or under the mattress, and everything he buys he buys with cash.

The young upwardly mobile accountant rents an inner city apartment, leases a new beamer - trading up every few years, owns at least six platinum or gold credit cards and might be able to meet one payment this month. All his designer furniture is on "interest free" but the date it kicks in is drawing near. On a weekend the accountant drinks at the finest bars, eats at the finest restaurants each time praying the plastic card doesn't "have a problem".

Not what you earn, it's how you handle it.

 

[Spongle]

Well I am 31 and I can tell you how much I have...

Absoloutley bugger all.

But... since my father decided to do himself in a few months back I should soon be in receipt of about 30 grand... a small portion of a hefty life insurance policy.

The problem is when you're in your 20's it's all hedonism gone mad... which tends to cost money, what with all the booze, fags, other intoxicants, big sound systems and shedloads of vinyl, bloody endless root canals and porcelain teeth and, of course; the fairer sex. Dating is expensive.

Screw being frugal before your 30... unless you have kids of course.

 

[prawn_86]

That's fantastic. If you don't mind me asking, can you explain how you managed to get yourselves into this position?

A bit of luck and then just good financial discipline.

I had scholarships through Uni so we were able to save a little bit then while the mrs was working. Now i am working and she is studying but i am earning a lot more than she was when i was studying.

Luck came about with the job i fell into. I am good at it, and paid fairly well for being good at it. We tend to save 10--15% of our after tax pay towards our 'assets'

 

[tinhat]

It depends on your lifestyle. Cocaine is not cheap.

 

[prawn_86]

If you are a couple, you can save a lot more than a single.

Depends on how expensive a taste one partner has...