in september 2011 three stanford
students launched a startup expectations
were low since nine out of ten startups
usually fail and there was no reason why
their startup would not fail as well the
idea behind it was simple it would be a
social media app that with a small twist
it would allow its users to post photos
and videos that disappeared from the
site after a few moments it wasn't clear
how anyone would find that valuable but
schoolkids quickly found a use for it as
they could post the dirty things they do
in school since it would disappear
anyway the next day
the app went viral the company grew way
faster than the founders expected in
less than four years the company's
valuation crossed a few billion dollars
turning its founders evan spigel and
bobby murphy into billionaires at just
25 years old evan spiegel became a
billionaire he's not alone in that
category of people mark zuckerberg bill
gates and others like them have amassed
massive fortunes at such an early age
since then snapchat started a war with
facebook and surprisingly did not lose
so the company's stock price grew
dramatically raising spiegel's net worth
to 15 billion dollars despite facebook's
massive size it has also doubled its
stock price since then hence the true
beneficiaries of this war were investors
who invested in both snapchat and
facebook but the problem is that around
half of americans don't own a single
stock which means around half of
americans are missing the opportunity to
benefit from the stock market's rise of
course there are other investing tools
out there from bones to real estate but
bone rates are so low that you will end
up losing money in the long run since
inflation will wipe out any potential
gains you will make on the other hand
with real estate comes a lot of
responsibilities and risks and it often
takes a lot of time for anyone to get
into real estate since it requires a lot
of capital which makes the stock market
even more appealing but what most people
don't understand is that your investing
strategy should highly depend on how old
are you a fourth year old should not
invest like a 20 year old so let's try
to find out how much you should invest
by every age so give this video a thumbs
up and let's dive in
in order to find out how much you should
invest first you have to find out your
net worth calculating your net worth
isn't really difficult it's much easier
than you might think take a piece of
paper draw a line in the middle of it on
one side you have to add up the total
value of your assets this includes the
current market value of your investment
accounts if you have one of course
retirement savings homes cars trucks
valuable things like jewelry and the
cash value of your checking and savings
account
on the other hand write down your
liabilities these include your mortgage
car loan student loan personal loans
credit card debts 300 bucks you owe to
your buddy and any other form of debts
you might owe
and now finally subtract your
liabilities from your assets the total
cost is considered your personal net
worth your total could result in
positive net worth or negative if you're
in a negative net worth category don't
be afraid it's alright it's typical for
people who are early in their careers to
have a low or negative net worth if they
have student loans or are new home
owners or just starting to save for
their future
if you're in your 20s and have zero in
savings congrats you're not doing bad
i'm not kidding it's fine not to have
any savings at this point in your life
let's face it if you're in college and
have student debts your part-time job
would hardly cover your bills leave
alone paying your debts so don't worry
most 20 year olds have a negative net
worth in your 20s your job should be
getting rid of unnecessary debts and
sorting out your finances i'm not
talking about mortgage if you have one
but rather credit card debts car debts
or a student loan because over time
these debts will compound and each year
the amount is going to grow bigger and
bigger if you're going to leave it you
might just never get financially free so
only interest on your debt will be so
high that you won't be able to cover it
don't invest any money if you have such
debts but the moment you get rid of
these stats your first priority should
be to invest as much as you can this is
the only period in your life where you
can live frugally because later in your
life you will have financial
responsibilities that you cannot avoid
as we have mentioned before your debts
can compound so does your investments so
the dollar that you invest in your 20s
is worth far more than the dollar you
invest in your 30s so invest the vast
majority of your income at this period
of your life when you approach your 30s
and you want to be doing at least good
enough you should have at least saved
six months of your income as an
emergency fund if we check the average
household income then that's almost 31
000
but if you want to be doing better than
your average boy then you should have at
least a year of your income saved in
your account emergencies happen
sometimes they even lead to bankruptcies
hundreds of thousands of people file for
bankruptcy due to unexpected bills
so be careful when it comes to your net
worth according to the fed the average
net worth for families in the us under
age 35 as of 2016 was 76 000
but this number isn't accurate because a
small percentage of wealthy americans
skewed it that's why the median is much
lower at an eleven thousand and one
hundred dollars that's not hard to
achieve the reason that this number is
so low is that even though average
adults have assets like a house and a
car their student loans and a mortgage
would overshadow them so don't worry as
you begin to cover your student loan and
your mortgage your net worth will
quickly build up
at this age it's usually difficult to
save money because people often have
families sometimes kids so people
usually leave paycheck to paycheck at
this point if you can even save 10 to 20
percent of your income to invest then
you will be doing great
as you start hitting the 40s ideally you
should have saved at least three times
your income if you're earning a hundred
thousand dollars then your number is
three hundred thousand dollars but
that's unrealistic for most people in
fact according to the fed the median
income of 40 year olds is a little below
60 000
usually people have families and lots of
bills to cover at this stage of their
lives taking care of an entire family
isn't easy especially when your children
begin to grow if you have started
investing back in your 20s you will have
at least something to fall on at this
age but if you didn't then you're naked
i probably won't be able to rip the
rewards of compound interest since
compound interest works with time so
this is the time where it's better to
focus more on individual stocks and not
in index funds but make sure you don't
touch your emergency fund since the
stock market is unpredictable you only
win in the long run do not invest any
money you might need in the next year or
two invest only which you can afford to
lose as you approach your 50s your net
worth should be significantly higher
because you're also getting closer to
your retirement age and if you want to
have a good retirement you have to
prepare for it the median net worth of
50 year olds is a hundred twenty four
thousand dollars but keep in mind that
it's the median the average is seven
hundred twenty seven thousand dollars
which is much much higher and your
savings should be five times your annual
income it might seem unrealistic to
reach these numbers but to be honest
even saving a small portion of your
income over 30 years is enough and if
you started investing early on it is
easily going to add up you to the power
of compounding keep in mind that you
don't necessarily have to follow these
numbers you can work a little harder and
retire in your 30s possibilities are
beyond what you might imagine some
people start taking care of their money
in their 20s others in their 40s so do
not directly compare yourself to anyone
sometimes circumstances do not allow you
to save in your early years so take a
look at your circumstances and plan it
accordingly and now it's your turn how
old are you and how much you have
invested let me know in the comments
below don't forget to get your two free
stocks from weeble if you use the link
in the description or check out my
special course on skillshare that will
teach you how to invest in the stock
market like those rich people do and
most importantly give this video a
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thanks for watching and until next time
you