Net Worth Series 20s: How Much Should You Have at the Age of 20 – 29

In this net worth series, I will share the net worth that a person in an age bracket (by decade) should have. We will start with a person in the 20s.

Data source

Before we begin, let me explain the sources of my data. As I could not find the exact data for Malaysians’ net worth, I decided to use the EPF Basic Savings table as an approximation (click here for the table). However, the basic savings are intended to provide RM 1,000 per month for a period of 20 years, which I think is not enough. Thus, I am going to double the amount of the basic savings as the desired net worth.

Besides that, I am also going to share the income level by age group. The data that I use comes from Employee Wages Statistics (Formal Sector) Report for the third quarter of 2023. You can access the report by clicking here.

Keep in mind that this is based on my personal opinion and it just serves as a reference only. So, let’s start now.

Net Worth series 20s

According to the EPF Basic Savings table, the recommended savings at age 20 is RM 6,000 and at age 29 is RM 31,000. The mean is RM 19,000 while the median is RM 18,000. I will take the mean as the amount is higher, so the net worth that a person in 20s should have would be twice of RM 19,000, which is RM 38,000.

Net worth is your total assets minus total liabilities (click here to learn more about net worth). Thus, after deducting all the debts, a person in 20s should have RM 38,000 under his/her name. However, as this is an average number, I will provide a range here. The range is from RM 12,000 to RM 62,000. If you are in your twenties and your net worth is within this range, you are on target. It would be better if your net worth is at least RM 38,000. You excel if your net worth is more than RM 62,000 before 30 years old.

Income level at 20s

Now, we shall move to the income. According to the report from Department of Statistics Malaysia, the median monthly wages for age group of 20 – 24 is RM 1,745 and for age group of 25 – 29 is RM 2,400. Thus, the income level for 20s ranges from RM 1,745 to RM 2,400 per month, translating to annual income of RM 20,940 to RM 28,800.

In my opinion, a person in his/her 20s should have one time his/her annual income as net worth; thrice in 30s; quintuple in 40s; and seven times in 50s. However, this is just my personal opinion and I will explain my rationale below.

As a person in the 20s just finished study and started entering the workforce, the income level is not high yet. Thus, I think it is a great feat to accumulate a net worth equal to his/her annual income. Based on the figures above, the ideal net worth for 20s is between RM 20,940 to RM 28,800.

Savvy financial moves during your 20s

The key during this decade is establishing good financial habits and discipline that will help you build net worth over the rest of your life. The moves include

1. Develop good money habits.

2. Create a budget and stick to it.

3. Set aside a certain percentage of salary each month to save and invest.

4. Build an emergency fund.

5. Avoid unproductive debts.

6. Build a good credit score

Conclusion

For many people, the 20s are the time in their life when they are starting their professional lives and possibly a new career. Your earning potential may be somewhat limited, which might make it seem difficult to build net worth during this decade.

However, with a target and a plan, you will be able to do it. For a start, you may aim for the lower end of the figures above, RM 20,940 (based on the median annual income), and slowly increase it to RM 38,000 (my own calculation).

The next article in this series will be about net worth in 30s.

How can a financial planner help you?

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Disclaimer: This post is for informational purpose only. You should use judgment and conduct due diligence before taking any action or implementing any plan suggested or recommended in this article.