today i thought it would be interesting
to talk about what net worth you would
have to have in order to be in america's
upper class middle class and lower class
so that you can see where you fit in and
then we can talk about how to increase
that to move you to upper class i am
tiffany thomas with wealthytiffany.com
and i achieved financial freedom and
became a millionaire if you are looking
to do one or both of those things hit
that like button and hit the subscribe
button and we're going to dive right in
all right let's first define what net
worth really means so that we can know
exactly where we fall net worth means
that you take all of your assets
everything you own and then you subtract
out all of your liabilities everything
that you owe
for example if you own a home then you
would take the value of your home and
then subtract out the mortgage loan that
you have left on your home or if you own
a car then you would take the value of
your car and subtract out the amount
that you have left on your car loan you
take all of your assets everything you
own your house your car if you have any
investments or if you have a savings an
emergency fund the amount that's in your
checking account and then you would
subtract out everything that you owe so
all of your liabilities so your mortgage
loan your car loan any debt that you
might have on credit cards any student
loans a personal loan anything like that
so you'll total up all of your assets
have that amount subtract out all of
your liabilities and that would be your
net worth for example like i mentioned
before i am a millionaire my net worth
is about 1.3 million i have one mortgage
left i have paid off my other well three
mortgages when i had four properties but
now i'm down to three properties and i
just have one mortgage left i take the
value of all of my properties subtract
out whatever mortgage i have left i add
up all of my investments that i have
everything in my checking and savings i
deduct out whatever i have currently on
my credit cards so figure out your own
net worth right now and an easy way to
do that is to use a free app i love
using it it's called personal capital
you can hook all of your financial
accounts to personal capital so
everything we just talked about you can
enter in your value of your home all of
your credit cards checking savings your
401k
all of your retirement accounts and then
you can actually see right in personal
capital what your net worth is they
calculate it for you if that's something
you're interested in i will leave a link
below you can click on that to set up a
free account with personal capital and
then we are going to talk about how it's
broken down into upper class middle
class and lower class and then you can
see where you fall here is a chart from
the us census bureau with the net worth
of americans broken down you can see
that the bottom twenty percent which is
the poverty class has a net worth of six
thousand and thirty dollars so that is
very very low and then when we move to
the next bracket
the next twenty percent it is the lower
middle class
and they have a net worth of forty three
thousand seven hundred and sixty dollars
and then moving to the next middle
twenty percent
it's considered the middle class they
have a net worth of a hundred and four
thousand and seven hundred dollars and
then moving up to the next twenty
percent it's considered the upper middle
class
may have a net worth of two hundred and
one thousand and eight hundred dollars
then moving to the very top twenty
percent and these are considered wealthy
they have a median net worth of six
hundred and eight thousand nine hundred
dollars so if your net worth is between
forty three thousand seven hundred and
sixty dollars and two hundred and one
thousand eight hundred dollars you are
considered middle class and looking at
these different sections for the net
worth of americans money is thought
about very very differently in each
category when we are at the very bottom
we are struggling to make ends meet
usually living paycheck to paycheck if
we are even getting a paycheck every two
weeks and it makes it really difficult
to think about even building wealth when
we are struggling with a place to live
when we are struggling with just finding
a roof to keep over our heads and warm
clothes to wear and i actually did a
video about does money buy happiness and
in a sense it does buy happiness to a
certain degree and if you want more
details about that i will leave a link
to the video above and below and you can
check that out later on but to a certain
degree it really does matter money can
buy us happiness but once we hit that
certain point our happiness doesn't
really increase when our money is
increasing so it's not really just about
making more money all of the time and
speaking of making more money even when
you increase your income a lot of times
people will increase the amount they are
spending it's called lifestyle inflation
once they receive that promotion at work
they get that big raise at work then
they think oh well i can spend more
money i can buy that boat that i've been
wanting to purchase
or i can buy that second car when their
income is increasing then they are
increasing their lifestyle expenses and
that isn't helping grow their wealth at
all so we really want to be careful of
lifestyle inflation when we start
increasing our income we don't want to
increase our spending we want to
increase our investing and i wanted to
show you these numbers just so that you
can kind of see where you fall with most
americans but this isn't the end all be
all yes we want to increase our net
worth over time but we don't need to be
in the super wealthy category to be
happy
as long as we are focusing on spending
our money on things that bring happiness
to our lives bring joy into our lives
then we are doing really really well i
want to show you another chart this is
the net worth by age so that you can
kind of see where you are currently
based on your age so if you are younger
than 35
the median net worth for the average
american is 15 700
then when you go from 35 to 44
the net worth increases to 83 150
and then moving up from there 45 to 54.
it is 139 and 200
and then from ages 55 to 64
it's 203
900
and then moving into 65 to 69 it's 266
thousand four hundred dollars and then
70 to 74 it's 305 thousand and 100
dollars and then when you hit 75 plus it
actually decreases so it's 249 500
and that decrease is probably because
they are starting to spend their
principal amount that they have invested
instead of just the interest that they
have been earning on their investments
as you can see until you hit age 75 your
net worth should be increasing and
that's because usually your education is
continuing to increase and you are
becoming more experienced in the work
field you're getting promotions and
you've gotten raises over the year and
hopefully you've learned to invest your
money and continue to invest your money
but these are just some averages to give
you an idea on where most americans fall
and honestly i feel like these are
pretty low amounts especially for those
that want to retire early those that are
part of the fire movement financial
independence retire early because we
focus a lot on saving a lot of our money
so that we can invest the majority of
that money sooner than later and then we
can have that option to retire early if
we want to but we are focusing on
becoming financially free at a young age
so that we can really live our lives to
the fullest and we don't have to rely on
someone else for money or even rely on
working for the money and i would
actually aim higher than what these
charts are showing because if we really
want to become financially free we need
to invest 25 times the amount that we
are going to be taking out of our
investments every year and if that was
confusing let me say it in a different
way we want to take what our annual
expenses are or what they would be in
retirement years multiply that number by
25 and that would be the amount that we
would need to have invested in order to
live off of our investments in order to
quit our jobs if we wanted to and i'm
not saying you have to shoot for a super
high amount like 10 million dollars or
something but whatever it is that you
are comfortable living off of that is
what we want to aim for and if we can
aim just a little bit higher than that
amount then we're able to help more
people i really believe it's important
for us to become self-reliant so that we
can take care of not only ourselves but
so that we can help other people we can
take care of our aging parents or we can
make sure that we are providing for our
families or that we have that extra
money to donate to a cause that we
believe in while these numbers can give
you the average for americans you really
want to figure out what your own number
is what you want your own net worth to
be so that you can live a comfortable
lifestyle that you want to be living and
a few ways that we can increase our net
worth and aim for our financial freedom
number is by definitely spending less
money than you are making
and having an emergency fund and then
also investing any extra money that you
have and you want to make investing a
priority and i do talk about that in
another video i will leave a link to
that above and below and i like
investing in the stock market and in
real estate with real estate i have buy
and hold properties and they create cash
flow for me each month and then with the
stock market i have my retirement
accounts like a roth ira but i also have
a brokerage account which means i can
pull money out of that at any time that
i want to and i can switch what i have
that invested in so if i wanted to
take money from the stock market and put
it into real estate which is actually
how i bought my fourth property then i
can do that and if you want to know all
of the benefits of a brokerage account i
have a video about that i'll leave a
link above and below but we want to make
sure that we are investing as much as
possible as soon as possible that is
going to make the biggest difference we
don't want to leave a lot of our money
sitting in a savings account not working
for us i made that mistake when i was
younger and i wish i wouldn't have i
know i can't go back in time and that is
why as soon as i realized how much money
i could be making by investing it i
started investing more of it another
thing that will help us is believing in
ourselves believing that we can increase
our net worth because if we tell
ourselves we can't then we won't be able
to but if we are telling ourselves that
we can then we are going to figure out
how to do that opportunities will come
our way we will read about things that
we can invest in we will learn about
different investments that we can make
so we really want to be open-minded and
have that positive mindset and know that
we can achieve financial freedom we also
want to keep that long-term perspective
if we are just so focused on the
short-term and instant gratification we
are going to spend all of our money
right now and then have nothing in
retirement or have very little in
retirement think about where you want to
be in 10 years in 15 years or even at
the end of this year what are the steps
you need to take today to get you there
also we want to be tracking our money
and setting our financial goals and like
i mentioned before an easy way to track
your money is with personal capital so i
will leave that referral link below if
you're interested in that and if not
that's fine then set up a budget in a
spreadsheet i actually use both i have a
spreadsheet or google sheet now and then
i also use personal capital so that i
can really see my full financial picture
and decide where i need to make changes
another thing to keep in mind is that it
is not about deprivation it's about
prioritization so i'm not saying we have
to cut back on all of our spending and
never go out to eat or never buy a new
shirt right we just set our priorities
and then we can spend our money on those
priorities and then cut back on the rest
so that we have money to invest comment
below and tell me what your biggest
takeaway was from this video today and
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so much for watching i'll see you in the
next video