Yahoo Finance Net Worth for Millennials: How To Tell If You’re Poor, Middle Class, Upper Middle Class or Rich
Millennials tend to get a bad rap for things like jumping from job to job, loving avocado toast and being late to embrace homeownership — but consider that this age cohort has been dealt a rough hand, in general.
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Most millennials entered — or were new to — the workforce during the Great Recession. The brutal economic downturn was, to put it mildly, a bad time to start “adulting.”
Though they’ve been dealt mighty challenges, millennials have largely managed to weather the storms and get their financial lives on track, with some turning out to be just as well off as their boomer parents.
But even if you’re a millennial who feels they are doing OK, it can be confusing to know which tier you fall into based on your net worth. Are you poor, middle class, upper middle class or downright rich?
Additionally, if you’re in a lower bracket given your net worth, you may be asking, “How can I move up the ladder?”
Let’s answer these questions with insights from finance experts.
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How To Measure Your Net Worth
Where do you fall on the net worth continuum from rich to poor? One way to find out is to look at statistics relating to income and net worth to see where you fit.
“For example, to hit the top 25% of earners nationally, you’d need to make about $90,000, and to hit the top 1%, you need to be pulling in over $560,000,” said John Jennings, the president and chief strategist of St. Louis Trust & Family Office.
When Millennials Make the 1% Mark — For Their Age Group
Consider that millennials are toward the younger end of earners, which plays a role in where they fall on the net worth continuum.
“They hit the top 25% at around $50,000 and the top 1% at about $175,000,” Jennings said. “Of course, these figures vary by state, as earning $175,000 in New York City or San Francisco is very different from earning that same amount living in St. Louis or Milwaukee.”
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But Statistics Only Tell Part of the Story
Though statistics provide a barometer of some kind, they don’t tell the full story, and may not even be the most important indicators of where you fall on the socio-economic spectrum — particularly not if you’re looking to determine whether or not you’re rich.
“You reach the stage of being ‘wealthy’ [when] if your income or net worth doubles tomorrow, little or nothing would change about your life other than the amount you save (or give to charity),” Jennings said.
“For example, I have a good friend who spends very little money, and if he made more, he’d just save it, so he is quite wealthy on what most would consider a modest income and net worth,” Jenning said. “I’ve also known people who objectively have a large income or a great amount of assets but don’t meet my definition of being wealthy because they have a desire to spend more and to have more. The point is not to judge people’s choices in terms of how they spend their money, but rather, it’s possible to be ‘wealthy’ at all sorts of different levels of income and assets.”
Invest In Career Training
If you’re a millennial (or anyone, really) who is on the lower end of the economic spectrum and is looking to vastly build your net worth, start by investing in career training to bulk up your skills and finesse your talents.
“Take a course in something new,” said William Bevins, CFP, CTFA, a fiduciary financial advisor. “Continue building your skill set.”
Not only will investing in yourself help you feel more motivated and capable, but it will also help address the needs of an ever-shifting work economy.
“Job markets are constantly moving, so keep your skills sharp and your eyes peeled for opportunities,” said Shawn Carpenter, chairman, CEO, StockAlarm. “Whether it’s a night class, an online course or a workshop, staying ahead can lead to better-paying gigs.”
Practice Good Budgeting, With a Focus on Paying Off Debt
Anyone looking to build their net worth, or even just looking to be in a financially stable place, needs to get a smart budgeting system in place and put tremendous effort into wiping out high-interest debt.
“Pay off high-interest debt first,” said Joseph Catanzaro, financial advisor at Oak & Stone Capital Advisors. “Focus on paying down credit card and student loan debts faster.”
Work With a Financial Planner
If you’re really determined to build your net worth ASAP, it’s wise to invest in a relationship with a trusted financial planner or advisor. These experts can help you build out an investment strategy and portfolio that works for you and gets you well on your way to generating wealth.
“Oftentimes the first step toward this is working with a financial professional like a planner or advisor to establish some goals and figure out what money you should be putting toward savings and existing debts, and what money can be allocated toward investments,” said David Kemmerer, CEO, CoinLedger. “A solid investment portfolio will really be the best step toward building solid net worth for the future.”
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This article originally appeared on GOBankingRates.com: Net Worth for Millennials: How To Tell If You’re Poor, Middle Class, Upper Middle Class or Rich
