How a 25-Year-Old Saved $200,000

There is so much baggage weighing down our money conversations. Taboos and complicated feelings make talking about money extremely difficult, even though it is importantThere is shame, spite, and many strong opinions where money is concerned. The way we spend our money is a reflection of the way we want to live our lives. Everyone has their own opinion on how best to live (including how others should live) and likewise how money should be managed.

There are so many reasons to not share numbers. Many people feel shame around their debt, while others feel shame around their inheritances. We are unhappy if we do not have enough and uncomfortable if we have more than enough. I started exploring the reasons to share my own net worth and weighed them against the reasons not to share.

Reasons not to share

I may render myself unrelatable

The average net worth for a 25-year-old is negative:  -$23,704. Student loan debt terrorizes millennials, but I am fortunate in many ways: a high earner, no debt, and free from hardships that hold many others back. I realize that not everyone is in the same position I am in, but hopefully there is still useful information to glean from my story.

Feeding the comparison beast

Sharing net worth might be discouraging rather than encouraging, a new type of frugal “Joneses” to keep up with. OurNextLife, another blog about financial independence, wrote about this comparison beast in their post about why they don’t share numbers. Comparison is the thief of joy, and why rob readers of joy?

Money is like politics

Everyone has their own opinions on how it should be managed, shared, spent, earned, etc. I am not perfect and have made flawed money decisions in the past. By sharing my net worth, am I also inviting others’ judgments about past decisions? What about future decisions? Will I have to endure the mantra of “you can afford it!” until my ears bleed?

man in brown long sleeved button up shirt standing while using gray laptop computer on brown wooden table beside woman in gray long sleeved shirt sitting
I will side-eye you if you tell me “You can afford it!” because my goals are different than yours.

This blog is not 100% anonymous

Some people I know in real life know about this blog, and it is really uncomfortable to know that they will now have personal details that used to be guarded. However, they are all friends and family I trust, so I hope that this won’t affect my relationships.

There is also the issue many financial bloggers are nervous about– career ramifications. Some tell stories of being passed over for raises and promotions or being targeted in a layoff because they are known to be well-off and so are able to weather it better. That would be awful, but I hope that while we continue to have money conversations, decisions will be made on a performance basis and not on social whims.

Being a target for fraud is also a concern. Should a man flaunt his wealth on the streets, he is more likely to be robbed while he sleeps.

“Now, I don’t share my current income online because the internet is full of people trying to steal shit: my identity, my money, my self esteem. There is a line to walk between transparency and privacy.” – Kara from BravelyGo

Kara makes a great point, and I applaud her for sharing the numbers from her past as a guide for others in financially tough situations. To combat fraud it is important to follow best practices, ensure the security of accounts, and be on the look-out for suspicious activity.

This might come across as one big humblebrag

This one pretty much speaks for itself. I hope to share the entire story without it coming across like I just want to brag about this number. In fact, I do not really want to share at all, except for the following reasons.

Reasons to share

Open dialogue, transparency, and honesty

The more people share, the more we can untwist fraught feelings. We can have conversations with context. Numbers help to illuminate the overall financial picture. If I want others to share, it would be hypocritical for me not to share!

Attempting to protect other peoples’ feelings by obscuring the truth is a discredit to other people. I would personally prefer to know the truth of a situation, even if it hurts or makes me feel bad. The classic example is riddled throughout our entertainment: the sitcom where critical information is withheld and characters make decisions without all the facts. It is like a friend who lies to you about their opinion of your bright red, shiny, new boots when you ask for their opinion. I don’t think you have to be a jerk, but err on the side of transparency and honesty and I think we will all be better off.

tenor
In The Good Place, Chidi doesn’t tell his best friend that he actually hates the red boots– it turns into an ethical quandary

“Net worth does not equal self-worth.”

In their book Your Money or Your Life, Vicki Robin and Joe Dominguez remind readers that you are not defined by your number. Financial situations are fluid. There are stages, and we are all in different stages at different ages. I am sharing my net worth to be a tool, a “GPS coordinate on a financial map,” as Robin and Dominguez write, not as something that ought to reflect my (or your) value as a person.

Time to Reveal

I had a lot to sort out before I felt ready to share my net worth. As you just read, I still have some mixed feelings about it. However, I write about money, and I am writing about my progress to financial freedom, and this is where I am now in my journey.

For simplicity, my net worth reported here only includes what I have in bank accounts. I do not include assets I own and could sell (though I don’t own a car or a home so there is not much to sell).

I am 25 and I have a net worth of a little over $200,000.

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A screenshot from Personal Capital

How Did I Get Here

Let’s talk privilege. There are many people who do not have the same opportunities I have based purely on factors outside of our control: where we are born, race, gender, sexual orientation, etc. There were systems in the background helping me to succeed in school and financially. Recognizing this, I will share the actionable things I did to start saving and also try to acknowledge where I benefitted from privilege.

Early Life

I wrote some about my formative experiences with money in my first couple posts. I got into a pattern of saving early and also attempted to earn money early as well.

  • woman playing golfI enrolled in a babysitting course as soon as possible, pocketing around $7 per hour at age 13. Since I did not have to contribute to my family financially, it could all go straight into my bank account. By the end of high school, my rates climbed to $12/hour.
  • I did not have an allowance, but birthday and holiday money were socked away the second I received it.
  • At 14 I applied for a competitive summer job at the local golf course. I wrote my first resume, shook with nerves in my first interview, and filled out my very first W-4. I made $6.85 an hour.
  • I had around $6,000 saved up by the time I was in my teens. I did not share that fact with anyone except my little sister. I felt like I had to guard my money by pretending it didn’t exist— even to myself.

College

I knew my parents could help with college, but we never talked numbers, so I did not know how much they could help. For all I knew, they could help for one year and then I would be all on my own, so I approached it as if they were not helping me at all.

I needed scholarships or a full-ride to go out of state, which I desperately wanted. I applied for 11 schools, wrote at least 15 essays, took 7 AP classes, studied relentlessly for the ACT and SAT. However, in the end I went to a school in-state because it was the most affordable option. Though at the time this seemed devastating to me, I see now it was a pretty fiscally responsible choice.

  • Going in-state meant my parents could afford to cover the entire cost of my education.  No student loan debt to pay off is a HUGE privilege.
  • They gifted me what was left over in my college fund. Thanks to the hard work and generosity of my parents, this amounted to a $20k headstart.
  • By the time I graduated I had personally saved up approximately $20k from working during school as a research assistant and from summer internships.

Age 21-25

This is where the hard work in University starts paying off. There is no denying that a high salary helped me save like crazy. Does this have to be your path to financial independence? No! However, a high income will undeniably speed up my progress.

Engineering as a Career

I pursued mechanical engineering for the same reason I stashed money instead of spending it: I wanted to give my future-self options. Though I enjoyed English more and almost effortlessly aced my writing assignments, I chose to struggle through long nights in the engineering building instead. I decided passion could come after financial safety had been established. The hard work paid off– my first engineering internship paid me $32/hour.

liberal-arts-major-vs-engineering-major (1).jpg
I clung to a hope for a high quality of life while I sacrificed social life in order to study for a test – from WeKnowMemes

Being Willing to Change Industries

I kept myself open to new opportunities.  I graduated with a degree in mechanical engineering, but when I searched for jobs in Portland, Oregon, the best opportunities were mostly software related. I applied anyway. Some baffled friends questioned why I would even attempt to send resumes to a job without the right degree. I kept at it and landed a Software Engineer role, working to teach myself skills on the job. My starting salary was $65,000 per year.

Early Career Development

I worked hard at my first ‘real job’. I was promoted after 8 months for delivering a project that was projected to save the company millions of dollars. I came prepared to meetings with my manager with set goals and achievements. I spoke at community events and helped organize workshops. I worked at the first job for 3 years before I started to feel like I hit a learning plateau and began looking for a new job. I read up on career development and used those skills to change jobs and double my salary.

Avoiding Lifestyle Inflation

A common pitfall to new grads is that the money coming in is immediately spent on new luxuries and an upgraded lifestyle. The first few years I lived with roommates and generally kept living like I did in college. Currently, I spend ~$23,000 a year and the rest goes into savings.

Net Worth Tracking

I started tracking my money just over a year ago. Not including retirement accounts or the $20k from my parents, I had $78,000 saved at 24 years old. I was living with roommates in the city on an engineering salary and kept a high savings rate. For more information about my money management, check out My Money Map – A Complete Financial Breakdown

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Tracking my growth. (The major uptick to $127k is when I hooked up my retirement accounts and the college fund from my parents. The brief drop to the right is when my 401k funds moved and Personal Capital lost track of them for a little while.)

Over the previous year, I have saved $87,000, which is higher than my entire salary last year. This is primarily thanks to the recent job change, resulting in a jump in pay (which you can see starts about halfway in the graph when the lines get a bit jumpier), a sign-on bonus. The market has been on a bull run, so everything I saved has been growing in the market for the last few years.

Takeaways

  • There are lots of reasons not to share net worth, but for me transparency and the hope that concrete numbers will help others is worth it.
  • My progress is a result of saving early and earning early.
  • My accumulated savings grew due to steadily putting money away. None of it is from a bet on bitcoin or a winning the lottery.
  • In times of uncertainty, make choices to set your future-self up for success. I had no idea what I wanted to be or to do, so I chose engineering to get my footing.

What about you?

Have you calculated your net worth? Would you share it with others? What are your thoughts about money transparency?

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16 thoughts on “How a 25-Year-Old Saved $200,000

  1. Another good reason to share your ‘savings number’ is to give yourself credibility. I mean anyone can give out financial advice but you have the numbers to prove that you live what you succeed in what you write about.
    I remember a friend giving me tons of advice about how to take care of my African violets (even though they were blooming with tons of purple flowers) then admitted hers had died.
    You clearly have a green thumb when it comes to growing your savings!
    A valuable take home message is that you have reached your goals by working hard, even if you did have some good fortune along the way.

    Like

  2. Wow. YOU are killing it. 25 with a networth of over 200k that’s very impressive. I just recently posted my networth of over 100k and thought I was achieving something, but man oh man. I have to agre with you though. The reprocussions of posting ones net worth do have both negatives and positives. And while I personally believe that we do it to help others realize that this is a reality. Some don’t take too kind to it. However, I will be checking back to learn from you as well as check in on your progress.
    Thanks for sharing

    Like

  3. I definitely know how you feel! I didn’t put much thought into being transparent on my blog and actually shared my net worth in the first post I ever wrote. I always wonder what people are thinking about me when I’m around them in real life as most of the people I’m around know about my blog. If I could go back, I would probably remain anonymous, but it’s too late now! At least I’m still not ranking on the first page of google when you search my name.. Probably have a little while before that happens.

    I think sharing my net worth is a great thing for my readers though. The mission of my site is to show people that they can become millionaires if they implement the things I talk about. It will be cool several years from now to have the story of my net worth journey mapped out for people to see where I started and how I get to the end goal. Kudos for sharing yours! You have made a lot of great choices to set you up to where you are now.

    Liked by 1 person

    1. I think it’s awesome you shared! I am curious about what people think– if they think about it at all. I like to think that everyone is really focused a lot on their own lives more than Googling me 🙂

      I really like following your net worth reports. It shows the whole progress map, which is something which I lack. I felt like I looked up one day and suddenly had a hundred thousand saved up, which is not really a common experience! Thanks as always for your support.

      Like

  4. Love this post. My wife and I do track our networth and have debating on if we should share it or not. I love the idea of being transparent with money and have tried in my personal life. You can feel the awkwardness when you start to talk about it with some people so I just leave it alone. Do you think that sharing it gives you more credibility when talking with others about money?

    Liked by 1 person

    1. Hopefully the pros and cons were helpful! I have had mixed reactions with talking with people in real life. Sometimes I feel it out or just wait until something comes up — a friend using a credit card I know about, someone talking about saving, etc. I did not really think about the credibility factor as much at first just because you can be great with money and have a little of it because of unfortunate events or you could be a generational millionaire but terrible with money. However, if it helps my credibility I will take it!

      Like

  5. Great post! Your writing skills really come out, so it’s nice to have multiple talents. I did the same exact thing. Wanted to be a newspaper reporter (how dated is that) but growing up poor, I wanted to make the most money possible, so I did engineering. I applaud your efforts to be transparent about having some advantages. Not so much the net worth sharing, because, while impressive for your age, it’s still not a lot of money in wealth standards. It’s still something to be super proud of as an achievement. You’re developing such great habits that will give you leverage and freedom to make choices that work for you. I’ve kicked around the idea of sharing net worth, and I’ve mentioned in a post or two, but I really don’t like the idea, from a security standpoint and from what you mention about the job situation.Bosses will use it as leverage against your bargaining position. Anyway, I look forward to following along and watching your growth.

    Like

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