First Person: How I Beat the Median Net Worth in Less Than 10 Years

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A new study shows that American households today are poorer than they were in 1969. Since I wasn't born yet in 1969, I didn't have any net worth to speak of, but I have built up my net worth in the past 10 years. According to a recent article by Daily Finance, the median family wealth in America is at a 43-year low. The median net worth of America's middle class is now $57,000. What's more troubling is the fact that the number of people with less than $10,000 of wealth has increased from 29 to 37 percent in the past 17 years (between 1983 and 2010). Even though a lot of us have had to struggle in the middle class, I feel as though we are headed toward better economic times. I haven't given up on the American dream.

Building up equity in our home

Our first step toward achieving the American dream of owning a home outright and being able to retire with no debt and money in the bank rests with our house investment. Our home represented negative equity for several years, which brought down our overall net worth. However, now we can include our home in our net worth calculation in a positive way. We have about $20,000 of equity in our home if we sold it for the value as estimated by Zillow. Even if housing values remain stable, we will build up more equity by paying down our mortgage.

Staying out of credit card debt

In the 1980s, I was too young to have any credit cards. However, by the mid-1990s, I had more than $20,000 worth of credit card debt as well as student loan debt. I think a lot of people are unable to build their net worth in our country because they are still paying down tens of thousands of dollars in student loan debt. About 10 years ago, I was finally able to pay off the last credit card and make the last student loan repayment. The easiest way for me to build up my net worth in the past 10 years was by staying free of debt.

Investing in a retirement account

It's not surprising to me that the average American has a net worth of less than $57,000, while the wealthy continue to get wealthier. Most wealthy individuals invest in real estate and stocks over time. They can weather the highs and lows of the markets. Although I had less than $10,000 saved for my retirement 10 years ago, I followed the advice of financial experts who advise people to invest for the long term. After a decade of saving a small percentage of my income toward retirement, I have built up a nest egg of more than $50,000.

Even though I have saved a net worth of more than $57,000, I know it can all change overnight. That's because like most people, we live paycheck-to-paycheck. I don't have the cushion of a dozen real estate properties or millions of dollars in stocks that I can sell if my income plummets. It's clear the difference between the middle-class and wealthy isn't just that rich people make a higher salary. Most rich people I know make more money from investments. They also live below their means, although granted their higher income means they can afford fancier cars and homes. Ultimately, I still believe I can live the American dream by saving when times are tough and when times are good. When the down economic cycle ends in another decade, I'll be glad I had faith. It doesn't take a high salary to build up net worth over time. It just takes gumption.

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