Interesting look at income and net worth

[schildi]

Hi All!

I had an interesting thought yesterday, going through my spreadsheets and updating my retirement planning assumptions on Fidelity's website.

Our current net worth after 26 years of working and saving/investing is roughly the same as our cumulative total gross income over those 26 years. So that means that we must have somehow lived off the investment gains and interest, almost exactly, LOL.

Not sure if that's average or good / bad after 26 years though, but nevertheless it seems like an interesting fact.

Where do you all stand with that, and after how many years?

[minnesotapaintlady]

I don't know my exact lifetime earnings. Looking just at my social security statement I haven't hit 1 million yet, but there's been non-SS taxable income as well (child support, tax credits, money that went into insurance premiums and HSA).  My retirement account balances are more than SS lifetime earnings though and if you look at total NW (about 1.4 million), I'm sure it's more than total lifetime earnings.  It's a lot more than 26 years though. First income was recorded in 1986. So 38.

[MN-Investor]

After college, I worked from 1975-1999. My husband worked after college from 1977-2016, and passed away in 2018. My current portfolio is just about 2½ times our total social security wages.

In the early years of investing, income and increases in investment value seem pretty small, but the fun comes eventually. At some point the increase in value of our portfolio exceeded current contributions. Then they exceeded wages for the year. Yes, there were down years, but the up years more than made up for them. During the Great Recession our portfolio dropped by one-third. It's more than made up for that. Hang it there. Your patience will be rewarded.

[Rukh O'Rorke]

Sept 2, 2024 14:34:50 GMT -5 minnesotapaintlady said:

I don't know my exact lifetime earnings. Looking just at my social security statement I haven't hit 1 million yet, but there's been non-SS taxable income as well (child support, tax credits, money that went into insurance premiums and HSA).  My retirement account balances are more than SS lifetime earnings though and if you look at total NW (about 1.4 million), I'm sure it's more than total lifetime earnings.  It's a lot more than 26 years though. First income was recorded in 1986. So 38.

So awesome! you are way above your total in net worth!


For me, other incomes that don't show up are early babysitting money, a supposed babysitting job that was really packing samples for shipment (back when babysitters made about a 1/3 or 1/2 of minimum wage) grad school stipend for TA/RA work, and of course waitress tips back when credit cards were an uncommon payment form.

While very small potatoes to the total, it does bug me I'll never know the total!

My total from ss is 2.3M, which is relatively embarrassing considering my net worth is less than that. Hopefully someday I will recoup the spent money and be at/above it like you all.

But a whole million is from after I did my phd (6 years ago now....), so maybe it was worth it. I remember some kerfuffle on whether it was worth it to go back at such a late age, etc. 

[schildi]

Sept 3, 2024 6:22:38 GMT -5 Rukh O'Rorke said:

Sept 2, 2024 14:34:50 GMT -5 minnesotapaintlady said:

I don't know my exact lifetime earnings. Looking just at my social security statement I haven't hit 1 million yet, but there's been non-SS taxable income as well (child support, tax credits, money that went into insurance premiums and HSA).  My retirement account balances are more than SS lifetime earnings though and if you look at total NW (about 1.4 million), I'm sure it's more than total lifetime earnings.  It's a lot more than 26 years though. First income was recorded in 1986. So 38.

So awesome! you are way above your total in net worth!


For me, other incomes that don't show up are early babysitting money, a supposed babysitting job that was really packing samples for shipment (back when babysitters made about a 1/3 or 1/2 of minimum wage) grad school stipend for TA/RA work, and of course waitress tips back when credit cards were an uncommon payment form.

While very small potatoes to the total, it does bug me I'll never know the total!

My total from ss is 2.3M, which is relatively embarrassing considering my net worth is less than that. Hopefully someday I will recoup the spent money and be at/above it like you all.

But a whole million is from after I did my phd (6 years ago now....), so maybe it was worth it. I remember some kerfuffle on whether it was worth it to go back at such a late age, etc. 

6 years with the higher earnings is too short of a time to accomplish this.
Keep on going, you'll get there!

[Mrs. Dinero]

Wow! Thank you for posting. It is very interesting. Had to go look immediately. I love financial statistics.

DH & I have made $2.9M over the course of our lives (variance between us is only $55k over all years. $30k was a severance. It’s crazy how we’ve been so similar since we started working in 1990).

Feeling inadequate with our net worth of $1.5 M.

Lifetime Wealth Ratio (LWR) for us would be .517

Incentive to go full throttle until we retire in 6 years.

[cronewitch]

I wasn't a big earner. Not sure of a total but in 1966 I made less than $1K and many years were $0. I broke 10K a year in 1978 and was up to 30K by 1985 but 65K by 1999 then bad years so down to under 40K again working up to nearly 110K by 2013. So not high income.

Now is so amazing I can't believe how much my net worth is I have nearly 2 million plus home equity of $300-350K.

This year my investment returns are over 350K and I get social security of about 45K.

I made more this year than probably the first 20 years working.

The funny part is I still feel poor, I have one furnace filter left so looking to order some. A 6 pack for about $100 or 1 reuseable one. I decided to use the one I have and order next year.

[obelisk]

Just turned 59.
I have always been a saver.  Started working at 14.  Networth of 7.2mil=3 earnings.  Wife is a stay at home.
Now is the time to really enjoy and loosen the purse strings.  Lots of traveling is being planned.  Planning early retirement sooner than later since work will not cooperate with frequent long vacations.

[Rukh O'Rorke]

Nov 9, 2024 6:47:46 GMT -5 cronewitch said:

I wasn't a big earner. Not sure of a total but in 1966 I made less than $1K and many years were $0. I broke 10K a year in 1978 and was up to 30K by 1985 but 65K by 1999 then bad years so down to under 40K again working up to nearly 110K by 2013. So not high income.

Now is so amazing I can't believe how much my net worth is I have nearly 2 million plus home equity of $300-350K.

This year my investment returns are over 350K and I get social security of about 45K.

I made more this year than probably the first 20 years working.

The funny part is I still feel poor, I have one furnace filter left so looking to order some. A 6 pack for about $100 or 1 reuseable one. I decided to use the one I have and order next year.

This is what I am grappling with too. And as I near the time to pull the plug on work I am dealing with quite a bit of doubts and anxiety about future black swan events that will decimate my hoard and plunge me in penury for the rest of my life. Simulation show most people on the 4% WR plan end up with 2 or more times what they started with - and some take it down to 0 before they are ready!

I know you retired on 1M or so, so you are at the doubling stage which is awesome! And I know you've been very generous with young family members too.

How old were you when you retired? how many years have it been?

I get worried that as the "good" stock market continues without a huge issue (2022 being rather run of the mill for downturns, and in the face of a huge pandemic no less), That the 'big one' is right around corner, waiting for me to quit the job efore unleashing the cracken as it were....

Now - with the furnace filter - how long are they meant to last? One I used to have was supposed to be changed monthly so I hope you aren't skimping on that!

[cronewitch]

Nov 9, 2024 12:12:46 GMT -5 Rukh O'Rorke said:

Nov 9, 2024 6:47:46 GMT -5 cronewitch said:

I wasn't a big earner. Not sure of a total but in 1966 I made less than $1K and many years were $0. I broke 10K a year in 1978 and was up to 30K by 1985 but 65K by 1999 then bad years so down to under 40K again working up to nearly 110K by 2013. So not high income.

Now is so amazing I can't believe how much my net worth is I have nearly 2 million plus home equity of $300-350K.

This year my investment returns are over 350K and I get social security of about 45K.

I made more this year than probably the first 20 years working.

The funny part is I still feel poor, I have one furnace filter left so looking to order some. A 6 pack for about $100 or 1 reuseable one. I decided to use the one I have and order next year.

This is what I am grappling with too. And as I near the time to pull the plug on work I am dealing with quite a bit of doubts and anxiety about future black swan events that will decimate my hoard and plunge me in penury for the rest of my life. Simulation show most people on the 4% WR plan end up with 2 or more times what they started with - and some take it down to 0 before they are ready!

I know you retired on 1M or so, so you are at the doubling stage which is awesome! And I know you've been very generous with young family members too.

How old were you when you retired? how many years have it been?

I get worried that as the "good" stock market continues without a huge issue (2022 being rather run of the mill for downturns, and in the face of a huge pandemic no less), That the 'big one' is right around corner, waiting for me to quit the job efore unleashing the cracken as it were....

Now - with the furnace filter - how long are they meant to last? One I used to have was supposed to be changed monthly so I hope you aren't skimping on that!

I retired in Jan 2014 with almost a million. I have planned for a 40% down market. My retirement goal was $400K but more than doubled to account for down markets. I got the most social security I could so living on it is possible. I thought 16K from investments would cover major home repairs. You need to handle downturns as part of the roller coaster. Companies are worth money price goes down it becomes a bargain and more people buy it. I save stress by taking a large amount out in January, RMD then convert a bunch to ROTH, gift to niece and nephew and then wait another year. Giving away money helps me think if I can give away thousands I can afford anything I want. McDonalds is selling burgers, they were selling burgers when they were 19 cents, now they charge more, people are spending much more per burger. I have 500 shares that pay dividends, not selling until people quit eating burgers. Furnace filters should be changed at least twice a year but I don't, I can reach them so need to call someone to change them. Our air is clean so it doesn't get dirty.

[Rukh O'Rorke]

Sept 3, 2024 12:56:01 GMT -5 schildi said:

Sept 3, 2024 6:22:38 GMT -5 Rukh O'Rorke said:

So awesome! you are way above your total in net worth!


For me, other incomes that don't show up are early babysitting money, a supposed babysitting job that was really packing samples for shipment (back when babysitters made about a 1/3 or 1/2 of minimum wage) grad school stipend for TA/RA work, and of course waitress tips back when credit cards were an uncommon payment form.

While very small potatoes to the total, it does bug me I'll never know the total!

My total from ss is 2.3M, which is relatively embarrassing considering my net worth is less than that. Hopefully someday I will recoup the spent money and be at/above it like you all.

But a whole million is from after I did my phd (6 years ago now....), so maybe it was worth it. I remember some kerfuffle on whether it was worth it to go back at such a late age, etc. 

6 years with the higher earnings is too short of a time to accomplish this.
Keep on going, you'll get there!

With the recent runup, I am there! Weird, unreal feeling right now, I must admit.