“Am I financially on track?”
Raise your hand if you’ve asked yourself that question.
I know I have.
One way I assess if I’m on track is by calculating my own net worth every month and measure it against my net worth goal for retirement.
On top of that, I enjoy reading net worth updates of personal finance bloggers that are within my age group, and see how my numbers fare in comparison. Granted, family net worth in the personal finance blogging circle tends to skew higher than average, but it’s still a valid data point to consider.
While it doesn’t feel “healthy” to compare our wealth to others, most of us do it subconsciously anyway. We check out the fancy cars on our neighbors’ driveways, the brands of other women’s purses, and our friends’ vacation photos on Facebook. All in an effort to see how we stack up.
Whom you compare your wealth to is very important. After all, wealth is relative.
Using myself as an example, I actually felt much wealthier when I was a university student than I do now.
Back in those days, after I paid off my tuition and bought textbooks for all my classes, if I could still afford rent, food, and the occasional shopping splurge, I would feel like I was on top of the world.
While I was far from well-to-do, most of my friends were also students that had their own fair share of money struggles so I didn’t feel poor by comparison. If instead, I was surrounded by heirs and heiresses, I doubt I’d have felt financially adequate.
Where I lived mattered a lot too: my neighbourhood was full of starter homes, bungalows and apartments for students. There was overall an atmosphere of growth, hard work and hustling to make ends meet. Flaunting wealth was the last thing on these people’s minds.
Looking back, my naïve student self didn’t yet grasp the concept of financial planning, so it was easy to stay oblivious and blissfully content.
In absolute dollar terms, I’m clearly better off today.
I have a home that I love in a city notorious for high cost-of-living, the start of a retirement portfolio that I’m proud of, yet I still feel like I’m constantly playing catch-up.
Why is that?
My peers (who serve as points of reference) have changed to include professionals with established careers, personal finance bloggers who’ve started their financial freedom journey a couple of years earlier, and a small subset of acquaintances who’ve started successful businesses or are otherwise semi-retired.
Is that something you can relate to? Please share your experience in the comments section. I’d love to know!
Getting back to the topic at hand, there is an objectively better way to see if your net worth is on par with the rest: consult official survey data on the average Canadian’s net worth. These data are collected from a random sample of Canadians across all provinces and territories, not just those in your immediate social circle. So hopefully, you get a better sense of how you’re really doing in the grand scheme of things.
I dug up the latest data (2016) from Statistics Canada’s website and compiled the most relevant info into several visually appealing tables, so you don’t have to do the work.
Please bear in mind that the data below reflect the personal net worth of individuals who are not part of a couple.
The chart is broken down by age, because the assumption is, the older you are, the more time you’ve had to accumulate wealth and let compound interest work its magic.
If you have surpassed the average net worth figure for your age group according to this chart, feel free to pat yourself on the back.
If not, it’s not the end of the world. The mere fact that you’re visiting a personal finance blog suggests that you’re ready to do whatever it takes to reach your financial goals. Whatever those may be, best of luck!
For those who’re curious, the 2 tables below will show more details concerning the average assets and liabilities for each age group.
Average Personal Assets by Age:
Age Group Cash Principal Residence RRSP, RRIF, LIRA TFSA Vehicles
Under 35 years $8,770 $59,153 $8,483 $5,217 $9,816
35 to 44 years $4,977 $68,174 $14,010 $2,679 $5,468
45 to 54 years $10,113 $101,713 $33,842 $4,075 $7,547
55 to 64 years $22,517 $164,844 $59,579 $7,963 $10,019
65 years and older $60,416 $296,790 $100,883 $20,155 $13,457
Average Personal Liabilities by Age:
Age Group Mortgages Line of Credit Credit Card Debt Vehicle Loans
Under 35 years $45,912 $2,295 $1,596 $4,807
35 to 44 years $38,728 $2,098 $1,339 $2,192
45 to 54 years $39,225 $4,549 $1,657 $3,021
55 to 64 years $43,676 $6,929 $1,896 $2,678
65 years and older $16,235 $4,081 $1,241 $2,327
Want to track your own net worth? Feel free to download my net worth spreadsheet.
Do these numbers shock you? Don’t hesitate to share your thoughts below.