Where Should You Be Financially at Your Age? The Net Worth Benchmarks Nobody Tells You

Most people don’t know where they stand financially until something forces them to look. I’ve seen it over and over again people hit their 40s or 50s, panic, and suddenly scramble to “catch up.” But the truth is, you can get ahead financially at any age once you understand the benchmarks and the system to follow. Let me walk you through what the average American has saved, what you should actually aim for, and the steps to hit financial freedom even if you’re starting late.

Understanding Financial Benchmarks by Age
Before you panic, understand this: most people are behind. The average net worth in America may look high, but the median what most people actually have is much lower. Under age 35, the average net worth is about $183,000, but the median is only $39,000. Between 35 and 44, the average jumps to $549,000, but the median is $135,000. From 45 to 54, the average is $975,000, while the median is $247,000. At 55 to 64, the average net worth hits $1.57 million. From 65 to 74, the average is $1.79 million, and it drops slightly to $1.62 million for those over 75. These numbers show one thing: most wealth is built later in life, after decades of compounding. But they also show how misleading averages can be and how important it is to track your own goals not someone else’s.

The Importance of Financial Goals
If you want to become financially free, you have to actually define what that means. For most people, that number is based on how much income they want every year without working. If you want $100,000 per year in passive income, you need about $2.5 million invested under the 4% rule. But if you build your portfolio around cash-flowing assets returning about 7% annually, you need roughly $1.5 million instead. Your goals determine your plan and your plan determines your timeline.

Steps to Achieve Financial Freedom
I always break wealth-building into a clear, repeatable system. Step one is saving $2,000 for emergencies. Not $20,000. Not six months of expenses. Two thousand dollars. Step two: destroy your credit card debt because paying 15% to 25% interest will kill your wealth before it even starts. Step three: build your financial system using the 75/15/10 rule, 75% of your income for spending, 15% for investing, 10% for saving. Step four: start investing. Whether you want to invest actively or passively determines how hands-on you want to be, but you must start investing if you want any chance at financial freedom.

Investment Strategies: Active vs. Passive
Active investing means you’re directly choosing assets individual stocks, real estate deals, or businesses. It can lead to higher returns, but it takes time, effort, and skill. Passive investing means you put your money into professionally managed investments funds, ETFs, syndications and let them do the heavy lifting. The best investors often use both approaches: passive investing for stability, active investing for opportunity.

Investment Strategies: Growth vs. Cash Flow
You’ll need to decide whether you want growth or cash flow or a balance of both. Growth assets (like long-term stocks or property appreciation) can double in value, but they’re volatile. Cash flow assets (like dividend stocks, rental properties, or business income) give you money every month without selling the asset. Cash flow brings freedom faster, while growth builds wealth bigger. The right mix depends on your goals.

Learning About Investment Options
There is no shortage of investments stocks, real estate, crypto, gold, ETFs, mutual funds, you name it. The real risk isn’t picking the wrong investment. It’s not investing at all. Even if all you can put in is $10 or $100, you’re ahead of the millions who never start. Retirement accounts like IRAs and 401(k)s make this easier because they let you invest with tax advantages. Traditional accounts give you tax deductions now; Roth accounts give you tax-free growth later. If you expect tax rates to rise, Roth accounts become extremely valuable.

Wealth-Building Asset Classes
The three assets that build real wealth in America are stocks, real estate, and business ownership. Stocks are accessible and scalable, but volatile. Real estate has the most tax benefits and cash flow, but it requires management. Businesses offer the highest upside, but also the highest work. You don’t need all three, but you do need one. The biggest mistake is relying on a salary alone.

Paying Off Low-Interest Debts
Once your investments are growing, you should eventually eliminate low-interest debts like student loans, car loans, and mortgages. Imagine a life where 100% of your income is yours not the bank’s. Your money becomes a tool instead of a burden, and your wealth snowballs.

Smart Spending Rules for Financial Health
To stay financially free, you need guardrails. Never finance anything that doesn’t make you money except your primary home. And for luxury purchases, follow the rule of five: if you can’t buy five, you can’t afford one. This rule keeps your ego from sabotaging your bank account.

Strategies for Increasing Income
You can only cut expenses so much. At some point, you have to grow your income. Ask for a raise. Change jobs. Build new skills. Start a side hustle. Learn AI tools. The extra income doesn’t go toward lifestyle upgrades it goes toward investments.

Protecting Your Wealth and Assets
As your wealth grows, you need to protect it. Taxes are your biggest expense, so a skilled accountant is non-negotiable. Depending on your situation, you may need real estate attorneys, business attorneys, and estate planners. Insurance, asset protection structures, and legal planning become essential tools not optional luxuries.

The Importance of Giving Back
True wealth isn’t just about what you keep it’s about what you give. Whether you give financially or through service, giving back is part of a complete financial life. The more wealth you build, the more people you can help.

Summary of Financial Foundations and Steps
Start by understanding your financial standing. Set clear targets based on the lifestyle you want. Follow a structured plan like the 75-15-10 method. Start investing early and consistently. Pay off debt, grow your income, and protect your assets. And once you have wealth, use it to make a difference. That’s the real path to financial freedom.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.