7 Signs You Are WAY ABOVE Average Income Debt Retirement

The media often likes to cover what the rich are doing. When I was planning this video today, I saw a headline talking about how Mark Zuckerberg just closed on a $170 million property right here in Miami on Indian Creek Island. This is one of the largest and most exclusive homes ever built. Wow, that's great, Mark. Good for you. But most of us are never going to obtain anything anywhere near that in life. Today, I want to talk about what the average person really has right now, so that way you can gauge how you're doing. Are you falling behind or are you moving ahead? Every once in a while, I like to make a video like this because not that you should be constantly playing the comparison game with yourself versus everyone else, but I think it's equally important to have some sort of an idea of where you stand if your goal in life is to get ahead financially. If you're okay with where you're at, then this video is probably not for you. But if you're just mildly curious about what other people have, how you're doing in comparison, this video definitely is for you. Now, let's start off with income in America. Right now, the median household income in the United States is about $84,000 per year. Clearly, in the area I'm walking through right here in South Beach, along this marina, it's a lot higher, but that's the median throughout the country. Median just means that half of the households earn more than that and half of the households earn less than that, so you're just kind of in the middle, hence the word median. But that number doesn't really tell the full story because income fluctuates depending on your season in life. Age has a lot to do with income, where you're at in your career has a lot to do with income. Sometimes people switch career paths altogether and that can have a massive impact on your income, either positive or negative. For example, a lot of households under the age of 25 only bring in around $38,000 to $42,000 a year. Those are people who are just starting out in life, who are either working part-time or maybe they just graduated from college and that's their starting salary. But once you get a little bit older, in your mid-20s to your early 30s, that median household income can jump into the low $60,000 range, so quite an improvement from where it was before. And by the time you reach your prime working years, between 35 and 44, median income climbs to about $78,000 to $85,000 per year. And your peak earnings in life are actually usually between 45 and 54, where the median household income usually is between $88,000 and $95,000 annually. And after that, it kind of declines as people start to transition into retirement. And one thing you might have noticed is even when you look at people in their peak earning years, and you just look at the median numbers, more than half of all people are still making less than six figures a year. And I would argue that even making six figures a year these days is poverty wages. A few months ago, I made a video talking about how the new poverty level should be close to 140K a year with how bad inflation is. Some people might think that's an extreme number. I saw a lot of comments in that video saying, well, I get by on way less and my life is great. And I think there's a lot of truth to that because some people have just gotten way too overextended. And depending on the city you live in and the cost of living in your area, people just have unrealistic expectations of what it takes to live a good life. People's standards have gotten too high essentially. But just by knowing those numbers, you can take a look at what you're earning and say, okay, well, I'm doing a lot better than the average American, or half of all people are still earning more than me. Maybe I want to do something to try to catch up and make up the difference because I want more out of life than what I currently have. But of course, income is not the only thing that counts, guys. I would say it's actually equally, if not more important, what you actually spend. There's this old saying, it's not about how much you make, it's about how much you keep. That's how janitors who have made minimum wage for the past 50 years end up a millionaire in retirement. Meanwhile, people making six figures end up broke and are never able to retire. That's how this can look in the real world. And the reason why spending is probably more important is because spending habits are learned at a very young age and you tend to hold on to those spending habits throughout your life unless you recognize that you're in an unhealthy spending pattern and you do something about it before it's too late. Now, the younger you are, you typically spend less money and that's because you simply just don't have as much money and also you don't have as many expenses. You don't have kids yet. You don't even have a spouse yet. You're just living in a simple studio or one bedroom apartment, just kind of subsistence living. But as you get older, you accumulate more things, you maybe get together with someone, and suddenly your spending requirements go up. And once you get a little bit older, you might have kids, you might have a mortgage, you have other household responsibilities, and your expenses and cost of living just continues to rise. That's where I was just walking down there along this path. As you can see, pretty cool view out there. But when you look at what people are spending, this is how most people end up broke, guys. Households under 25 spend between $28,000 and $32,000 a year. By the time you reach 25 to 34, you're spending between $55,000 and $60,000 a year. Between 35 and 44, you're spending $70,000 to $75,000 a year. And then at the same time your earnings peak, so does your spending. And between 45 and 54, you're now spending between $78,000 and $83,000 a year just to maintain your lifestyle. That's not getting ahead at all. That's just to keep up with what you have going on right now. These numbers only represent the cost of living, things like housing, food, transportation, insurance, utilities, and basic necessities. They do not include saving or investing. So when you have a household that's spending around $80,000 a year just to live, they need to be earning significantly more than that in order to actually build wealth or any sort of retirement savings for the future. And for many households, there's just hardly anything left over. And I would argue that today, a lot of that you can thank inflation for, guys. We have never seen anything close to what we're seeing right now in terms of the cost of living and the gap between what people are earning and what life actually costs. But also, we have to be honest with ourselves and recognize that people take on far more debt since credit is so easy to obtain for basically anything these days, even getting a DoorDash delivery. It makes it very easy for people to spend beyond their means. So the big takeaway that you can have from this information is look at where you fall on this age group and look at what a lot of people are spending. And you can say, am I spending more than this? Am I spending less than this? And that can either show that you have room for improvement or it can let you know that you are actually doing way better than the average person. You might be earning more than what most people make and spending less. That's the perfect combination. And you're probably on your way to being pretty wealthy or you already are. But later down the road is when people start to regret some of those choices of just kind of living at their current income level rather than putting something away for later on. Because only about 40% to 45% of households approaching retirement right now, they have less than $100,000 saved. That's pretty much half of everybody, which is essentially nothing in today's world. That's not even enough to cover a year's worth of living expenses. Maybe you can stretch it out to two or three if you significantly cut back on your standard of living. But that's it. How do you retire on $100,000? And that's why no surprise of pretty much everybody these days who's retiring relies heavily on social security. In fact, if it wasn't for social security, I think retirement would already be over, guys. I've been predicting since I've been talking about this that retirement is going to be a thing of the past in the next decade or so. And if social security goes away or people just aren't earning enough through those checks to actually pay for your cost of living, it's going to be over. No one's going to be retiring because it just simply will be out of the budget. Right now, the average social security benefit is about $2,071 a month. And that's roughly 25 grand a year. And that ends up being people's primary source of income. So you're stuck with trying to live off of 25 grand a year and make small withdrawals when you need it from that $100,000 or less retirement account. It doesn't sound very ideal to me. And I've heard from people on this channel multiple times who do that and have made it work just fine. And that's great, guys. But you have to understand that you probably have been doing this for a while. You've got used to your standard of living that has made it possible to make this very easy. And you're able to establish this standard of living before the cost of living got out of control. And I think those are two important things to acknowledge of somebody who's been living this way for the past 10 or 15 years in retirement versus somebody who's retiring tomorrow that wants to start living that way. You have a headstart, so to speak, and you have more experience stretching that dollar versus somebody who might have been making $80,000 or $90,000 a year and is going to have to start living off of $35,000. Did you know that when you are using the internet and every time you sign up for some sort of new platform or new account, you get bothered with those pesky terms and services? 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So let's now take a look at net worth and what people have. I think this is the most interesting one because like I said, income and spending are only different parts of the equation, but your net worth ultimately is like the end result, right? It is the end result of how much you have saved and earned in your lifetime, how much of that money you've invested and how much of it has grown for you to build additional wealth. Because at the end of the day, somebody who made way less money can have a much higher net worth than somebody who made a lot more money if they just made smarter financial choices throughout their life. Now let's start with people 35 and under, because really when you're in your twenties, you essentially have no net worth. So by the time you reach your mid thirties, you've might've built a little something. And 35 and under typically have about $39,000 in net worth. If you're between 35 and 44, that number climbs to 136,000 substantially more. By the time you get to 45 to 54, it rises to 247,000. And between 55 and 64, it gets to around 365,000 and 65 to 74, you get to 410,000. And those are just the median numbers once again. So you might look at this and say, well, I'm 40 years old and I already have half a million dollars in net worth. You're way ahead guys. That is a great thing. Or you might look at this and say, I'm 50 years old and I only have $200,000 in net worth, which means I'm significantly behind. But if you're earning a decent amount of money, you might still have time to change some of your spending habits and compound some more wealth before it's time to actually retire. So that's why I think it's important to look at these statistics, not really to make anyone feel bad, but more as like a prevention measure, right? You're preventing yourself from reaching retirement age and having nothing. And you're able to kind of do something about it before it's too late. And that's why I think it's important to know this stuff. But then of course, we have another problem. Debt is a huge factor in what people end up with in the end and has a heavy impact on your net worth. The average American adult owes roughly $63,000 in total debt as of 2025. But that does include mortgages, auto loans, student loans, and credit cards. So because it includes mortgages, I think that number is a lot higher. But if you exclude mortgages, it's going to be significantly lower. But it is no surprise, we have been talking about this for the past couple of years now, consumer debt levels have been continuously rising every single quarter. The New York Fed puts out a report about household debt levels and it continues to skyrocket. So things are definitely moving in the wrong direction when it comes to that stuff. And you might think it's great when you're younger that when you get older, you're going to be earning more. But the truth is that people who are middle-aged, usually in like their mid-40s, mid-50s, actually have the highest debt-to-income ratios because these people make the most money, but they also have the most expenses, guys. I mean, ideally you would like to keep your debt-to-income ratio as low as possible. And that just means that the amount of debt that you have to pay each month is very low compared to your relative income. So for example, if you make $100,000 a year and you only have to pay $10,000 a year in debt, or in other words, $1,000 a month, that's a 10% debt-to-income ratio. But most households are operating at a 30% or above debt-to-income ratio right now. That means somebody who's making $100,000 is spending at least $3,000 a month just on debt payments. That's a third of your income gone before you ever saved anything, before you ever invested anything, guys. So that's why people aren't getting ahead these days. But like I said before, it's not totally everyone's fault. Inflation has been a game changer over these past six years because even though the official inflation numbers are now in like the 2.7% range, the average everyday expenses have gone up significantly more than that over the past six anywhere between 50% to 100% or more, depending on what items we're talking about here. They say groceries have gone up about 30% over the past five years. We know it's been more like 50% to 100%. They say rents have gone up 20% to 30%. Depending on where you live, it might have gone up 40% to 60%. Insurance rates have climbed also about 30% in this timeframe. Everything has gone up. And one of the most misleading comparisons out there I think is the net worth between homeowners and renters, guys. And the reason I think it's misleading is because this kind of gives people the impression that buying a home is the only way to build wealth in life, which is simply not the case. But because it is the way that most people build wealth, because they are not strict and diligent investors as renters, then the numbers heavily get skewed in favor of homeowners. But this is how it looks. The median homeowner has a net worth of about $400,000, but the median renter net worth is only around 10 or $15,000. So yeah, it's like significantly higher. But why is that? It's because people who rent typically do not invest the difference. The other day when I ran into my neighbor Jeff here in Miami Beach, he has been a real estate attorney for decades now. And that's why he also said this statistic is misleading, that you can become much wealthier as a renter slash investor rather than a homeowner because people simply just don't do it. But it's not that it's not possible, it's that people don't do it. And that's why they say everybody should buy a home because it acts like a forced savings account, which it does, assuming you're not borrowing against the house, assuming you don't refinance every few years, assuming that you continue to build equity, assuming that you don't move. That's a lot of assumptions and those are a lot of things that people simply just don't do. So I would also say at the same note that being a homeowner is also a very misleading way to build wealth, guys, because yeah, it can be just like renting and saving and investing can be, but it also might not be if you are not responsible with your choices when you become a homeowner. If you're constantly borrowing against the house to maintain your cost of living or increase your lifestyle, so to speak, you are never going to get ahead financially. You're not going to have the same net worth as somebody who didn't do that. And that's why ultimately people are retiring later and later in life. The average retirement age for a long time was around 62 or 63 years old. And now it's closer to 64 or 65, but a lot of people are continuing to work well into their 70s now out of necessity. And I've seen some of these interviews on YouTube before of people who are doing this. People have to go back to work. And a lot of them, it's not always the case, but a lot of them have big regrets about their spending habits when they were younger. And like I said, at the beginning of this video, your spending habits are developed from a young age. You see what your parents do. You hear the things that they say. And a lot of people just emulate that subconsciously, right? So it's kind of up to you actually to become self-aware of your spending habits as early as possible and make sure that it reflects your goals in life. And there's also another hidden risk to just not being smart with your finances from a young age. And that is longevity, guys. People are living longer than they have ever before in the past. Life expectancy keeps going up. A man who is 65 years old right now is expected to live at least into his early 80s. And the average woman might live into her mid 80s. And of course, a lot of people end up living longer than that too. So ironically enough, the longer you live, that might be great. But if you didn't save and plan for it appropriately, it can be a miserable existence. For example, for couples, there's a better than 50% chance that at least one spouse will live past the age of 90. And that means retirement might last 25 or 30 years longer than what you expect. So running out of money is a huge risk that people take on by not being smart from the get-go. And I think the good news from everything that we just went over is a lot of these numbers are very attainable, guys. Especially if time is on your side and you are still under 30 years old, you can easily surpass these numbers within just a decade, okay? You can be 40 years old and have twice the net worth of the average person in their 60s, guys. It is definitely doable. There are so many opportunities out there for you to get there. It's not even funny. The problem is most people just don't take advantage of any of them. People just kind of follow what the system wants them to do, what they've been coached to do their whole lives. You go to school, you go to college, you get a job, you get married, you have kids, you buy the house, and next thing you know, you're just treading water like everybody else. Nothing wrong with following that pattern if you want to, but doing it in a smarter financial way is going to put you leaps ahead of most people. Because the reality is most people don't even retire with a million dollars. Just retiring with a million dollars is essentially a fantasy for almost everyone. A lot of Americans say they need at least a million and a half or two million bucks to retire comfortably, but yet, like we went over, a lot of people approaching retirement today don't even have a hundred grand. And that's why the official data from the Federal Reserve shows us that only about two and a half percent of Americans have $1 million saved in their retirement account. Now, if you zoom out a little bit and you include net worth, which is not just the amount people have in their retirement accounts, but are just a millionaire by looking at all of their financials, that number does go up to 18%, guys. But even that's a pretty low number. Net worth is a great gauge. It does tell the whole picture, but you might have half of that net worth tied up just in your house. And if you're living in that house, there's not much you can do besides borrow against it or sell it to extract that equity. Or people end up doing reverse mortgages, things like that. I'm not a fan of it. We've gone over that in the past too. But what this data reveals is just how little people actually have. Take a look at the median value of assets for U.S. families going all the way back to 1990. And what do you notice? Today, it's at $38,000. The peak of this chart peaked back in the early 2000s when U.S. families had 47,000. So going back the last 25 years, people have actually gotten significantly poorer. And this data proves it right here. The amount of asset holdings have declined substantially since then. And when you factor in inflation, this is basically a straight line down. And at the same time, the rich continue to get substantially richer. Since 1989, the top 0.1% of Americans increased their share of wealth by over 60%. And the bottom 50% of Americans saw their share of national wealth fall by 46%. And this just goes to show you how important it is to get on the asset train as early as possible, guys. Like I ran into one of my subscribers the other day, I think his name was Dylan, who told me he's like 25 years old. He's been buying silver for the past few years and he's stoked. You know, he's super happy now that he's starting to see the results from that. And that's what you have to do. You start early. Pick something that you enjoy. Pick something that you can afford, whether it's investing in the stock market, buying gold and silver, maybe being a real estate investor, it takes a lot of risk and a lot of money in many cases, or better yet, starting a business from a young age. You know, those are all ways to get your hands on assets and really own something over time. That's why you see this giant wealth gap. That's why you see top 0.1% of earners, their net worth and wealth has just skyrocketed over the past 30 or 40 years, while everybody else is kind of going in the other direction. Because once you get your hands on a decent amount of money and assets, it gets significantly easier to compound that over time. And I also think this is one of the most misleading things too, because a lot of people look at, well, there are more than half a million 401k millionaires in the United States today, which is true. And that number has been exploding, right? But that's only half a million people, guys, in a country about 340 million. So it is a drop in the bucket. And it took these people who have a million dollars in retirement savings on average, 27 years to reach that milestone. Think about that. We're talking a lifetime of hard work and saving and making sacrifices to get there. These are people who started saving and investing early. They were consistent. They were disciplined. And those are the personality traits that you need to have in order to get ahead. So I'm hoping that a lot of people saw this and said, wow, I'm doing a lot better than the average American right now. And if you are, good for you. And if you're not, I hope this gave you some inspiration to start making some changes and some improvements and start playing catch up. You're going to be glad you did in another 10 years from now, once you start reaping the benefits from it. So if you enjoyed this video, make sure you subscribe to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here, and I'll see you in the next one.