For better or worse, the prevailing theory about those aged between 20 and 30 right now is that they lack financial discipline. This often means that they are far better at spending than saving, which is why there is a real concern about what retirement might look like for an entire generation.
Key Points
This young Redditor is already doing fantastically in their late 20s, building up a sizable net worth.
They are not trying to determine the best path forward with all their assets.
The hope is that things will continue, and in 15 years, the Redditor and his wife will be able to leave the workforce.
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The truth is that plenty of Gen Z individuals out there, including this individual posting in r/Fire, have already developed or are developing strong financial habits. In the case of this Redditor, they have already reached a significant net worth milestone at an impressive 24 years of age.
When I was 24 years old, I was definitely in the camp of spending over saving, so what this Redditor is doing is nothing short of inspirational.
The Situation
With a net worth of approximately $500,000, this 24-year-old is, in their own words, “extremely fortunate” and has been lucky to have found a great career. Add in savings from growing up, and they recently hit this magical net worth milestone.
Breaking down their current net worth, they have approximately $160,000 in a personal investment account, $20,000 in cash, around $70,000 in company stock, and $250,000 in home equity. The goal would be that if their income trajectory rises as expected, the Redditor and his wife could be looking at an early retirement around 35.
Admittedly, the original poster admits to being pretty frugal, putting them in great company with the FIRE crowd. The wife does encourage the Redditor to enjoy the fruits of his labor with some spending, especially on interests and hobbies.
As a mortgage broker, the hope is that there will always be a market for their role and that they can take advantage of the job flexibility they have to continue earning while having a decent work-life balance.
Of course, the real question is, with all this money floating around, what should the Redditor be doing? As he only talks to his wife about the money, family and friends have no idea, so the original poster hopes Reddit will deliver the advice they need.
Keep Things Simple
Aside from the assurance that nobody in this Redditor’s life besides their spouse needs to know the extent of their net worth, they are quickly encouraged to learn more about investing. The good news is that if they take the time, they are still young enough to gather knowledge and do much of the heavy lifting themselves. At least, this is one of Reddit’s favorite recommendations, which is guaranteed to be at the very top of the comment section.
Aside from staying independent, there is another question about whether the Redditor should continue to live a life of frugality, at least for those on the outside looking in. The truth is that there is a chance that if you tell your friends and they learn how far ahead of them you are financially, jealousy and requests for help can ensue. The best thing the original poster can do right now is to be silent.
Investment Advice
After the shine of this Redditor’s success wears off, we must consider that much of the net worth here is tied to real estate. The result is that there should be some additional diversification, especially with $70,000 in company stock. Does all of this money have to sit in one stock, or is the Redditor waiting for this money to vest?
In other words, can they take some of this stock money, at least the shares that are not restricted, and move them into something with a higher percentage return? The original poster mentions an interest in investing in both the S&P and NASDAQ funds, so using some of this stock money might be a smart move to help diversify into those two areas.
Right now, with a $200,000 income, the Redditor should avoid big purchases and continue to put away money. These are prime earning years, and while there is hope that income will go up, this individual is way ahead of other individuals of their age, so take full advantage of stashing away money for a rainy day and a cozy retirement in 10 or 15 years.
The post I Reached A $500,000 Net Worth at 24 — Now What Should I Do With My Wealth? appeared first on 24/7 Wall St..
