How much will I be worth in 20 years?

Have you ever thought about what your net worth would be in the future? In this post I will explain why this exercise is extremely important for financial freedom, and show you how to calculate your future net worth.

Why it is important to check your future net worth 

Understanding what you will be worth based on your current net worth growth is a great way to see your financial trajectory. This insight helps give you a realistic approach on where you will end up in life. If you do not like what your net worth turns out to be after this post then make the adjustments to change your life today. Of course life happens, and what you make today will most likely change. But understanding where you will be at in 20 years if all else remains the same is an interesting way to see your future net worth at a minimum. 

In addition, this helps with thinking long term. Having a long term mindset is one of the most advantageous skills to develop for success later in life. Short term thinking limits one’s potential if the game plan is only about what makes you happy in the moment. Important to see beyond the moment and build wealth over the long run in our day and age. This is why it’s important to gauge net worth later on in life. 

How to calculate future net worth

The first thing we need to know is what your net worth is today, and how much it has grown in the past couple of years. In a recent post, I discussed how you can track your net worth. From that post, I showed three years of data. We can use this data to see how much I will be worth in 20 years if all else remains the same.

Once you have at least two years you can add a column to calculate the change in net worth each year. To do this simply take your net worth for this year and subtract your net worth from last year. This will give you how much your net worth has increased since the last year. In 2020 my net worth increased by $30,000. Finally, we can take the net worth change and multiple by 20. If all else remained the same, my net worth would be $600,000 in 20 years

Net worth with a 5% increase each year

The net worth $600,000 is assuming my income/expenses, and investments all stay the same. In 2020 my stock grew 36%, so I had a great year but that return will not be the same every year. Also I would imagine my income would grow as well.

For example if my net worth increased by 5% each year. Then in 20 years my net worth would be $1,011,182.94! From just increasing my income by 5% each year I earned an extra $400,000 in net worth (assuming expenses stays the same) This means by age 45 I would be a millionaire. 

Net worth with both income and expenses increasing by 5% each year

If earning an extra 5% in income will earn me an extra $400,000, then what happens if my expenses also increased by that much. If I also increased my lifestyle and thus my expenses by 5% each year. Then I would lose out on $400,000 over a 20 year period.

This is why it’s extremely important to NOT spend more when you make more money. Building wealth is all about increasing your net profit, that is income minus expenses. This is the basis for the idea about cash flow. Imagine if your life was a business and you wanted to maximize cash flow, then growing the net profit is key.  

Net worth with income increasing by 5% and investments returning a 10% annual return

Before we just went over changes to income and expenses, but now let’s see what happens if we are investing over this 20 year period. In 2020 I invested about $7,500 into the stock market so the returns were calculated into the initial net worth change.

Currently, I am on pace to invest $21,000 in the market for 2021. With an assumed 10% annual return, and a 5% increase in income. Then my net worth would grow by 15% per year, and after 20 year my net worth would be $3,127,427.47!

If I managed a net worth increase of 15% per year for 20 years and kept my expenses the same I would have a little over 3 million in assets. It’s crazy to think about the actual numbers to achieve financial freedom. 


All in all, starting with just tracking my expenses and income. This led me to try a net worth calculation, and now using the data I collected about myself I can set reasonable goals to achieve financial freedom in our day and age. If you have any questions or comments please post them below. Thanks for reading. 

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