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Can You Be Worth More Than You Earn in Your Lifetime?

possible to be worth more than your lifetime earningsHave you ever thought about how much you’ll earn over the course of your life? If you average $50,000 a year for 40 years, that’s $2 million bucks! So, with those millions of dollars, what will you be left with? $100,000? $500,000? $1,000,000? Or…is it possible to be worth more than you earn in your lifetime???

Can You Be Worth More Than You Earn in Your Lifetime?

If you make $2,000,000 in your lifetime and have expenses like food, cars, your house, healthcare, insurance, etc. etc. etc….how on earth would it be possible for you to be worth more than you earn in your lifetime? Seems impossible, right?

Well long story short…It’s not.

As it turns out, Joe Udo from Retire by 40, J$ from Budgets are Sexy, and J.D. Roth from Get Rich Slowly have already explored this phenomenon. And they use a measure called, “The Lifetime Wealth Ratio.

Lifetime Wealth Ratio = (Total Net Worth)/(Total Lifetime Earnings)

If your net worth is greater than your total lifetime earnings, then you’re killing it!

In fact, here’s the official rankings by J$:

  • 0%-10% – Meh
  • 10%-25% – Now we’re cooking!
  • 25-50% – You’re on fire, baby! Give me your number!
  • 50-100% – Marry me.
  • 100%-1,000% – How do I get into your will?

Hahaha! Gotta love that guy. Hilarious.

Alright, seriously though. We’re still sidestepping the point. Apparently it is possible to be worth more than you earn in your lifetime, BUT HOW??

How It’s Possible to Be Worth More Than You Earn in Your Lifetime

As you can tell from the recent posts I’ve published, Liz and I have really been thinking a lot about our financial futures. With our second kiddo on the way (YAY!), we’re starting to wonder how financially stable we really are, and if we’re setting ourselves (and our children!) up for financial success!

So naturally, I started to think about our net worth vs. our earnings to see if we’re ahead of the game. The table below is basically the financial story of my life. I did tweak a few numbers to protect the innocent (me!), but for the most part, this is exactly what my life has been and what I plan for it to be like.

  • I started working at age 14
  • Got my first real job at age 24
  • Invested in my 401k, then pulled it all out after about a year and a half (stupid, stupid, stupid!!)
  • Then I got back on track. My career took off, I contributed 13% of my salary into my 401k, then I paid my house off!
  • From there, I figure my career earnings will grow by roughly 5% each year until I’m 50, without debt we can invest 50% of our income, and I figure I can earn a 9% return on my investments

can you be worth more than your lifetime earnings

Sorry for the tiny numbers, but hopefully you can still see the phenomenon that’s taking place!

Take a look at the magic that happens at age 47. At this point, Liz and I will have a net worth of $1.97M and I will only have earned $1.93M in my lifetime. So it IS possible! But how in the heck did this happen?

It’s All About that Eighth Wonder of the World

I don’t know if it’s true or not, but I’ve always heard that Albert Einstein called compounding interest the eighth wonder of the world. For him to say that must mean that it’s pretty special, and it absolutely is! I mean, c’mon, take a look at that chart above! By age 47, our money will be making $163,000 a year on its own, which is more than I figure I’ll even earn during that year!

So what is compounding interest? describes it this way:

Compound interest (or compounding interest) is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Put even more simply, this is interest that accumulates on top of interest. It doesn’t seem like a big deal for 10-15 years, but as the decades go by your money will just grow faster and faster. It almost becomes incomprehensible (Too bad we couldn’t all live to be 200. We’d be gagillionaires!!)!

Compound Interest of $1,000

Let me carry this one step further. I really want to nail down this point of compound interest to help you understand how powerful it really is. I feel like I just haven’t done it justice yet.

Let’s say you have $1,000 as a 10 year old kid (maybe your lunatic rich uncle stroked you a check on your birthday. That stuff happens, right?? ;)). Since you’re just a kid, your parents stashed it away in an IRA for you. The plan is that you won’t cash it in until you’re 80 years old. At an average interest rate of 10%, at age 80 do you think you’ll have more dollars than bunions? Let’s take a look! (not at the bunions…please keep those to yourself!)!

  • Age 10: $1,000
  • Age 20: $2,594 (*yawn*)
  • 30: $6,727 (*meh*)
  • 40: $17,449 (better, but still can’t even buy me a new car…)
  • 50: $45,259 (getting there…)
  • 60: $117,391 (whoa, I could almost buy a house)
  • 70: $304,482 (there’s that house I wanted!)
  • 80: $789,747 (Sheesh! No need to be worried about retirement! Barbados anyone??!)

Seriously?? $1,000 nearly turned into nearly $1,000,000? By doing nothing more than just stashing it away and letting it grow?


And that’s why compound interest is often quoted to be the eighth wonder of the world!

Remind Me Again Why This Matters?

Alright, circling back now. We’ve all (including myself) recently discovered that it is possible to be worth more than you earn in your lifetime. And how can we make that happen for ourselves?

Basically, by:

  • Ditching debt as early as possible,
  • Living well below your means, and
  • Investing heavily in your future (typically by more than 25% of your income for life)

So why on earth would anybody want to do this? It sounds kind of terrible doesn’t it? You struggle to pay off debts…you then put off living large so that you can invest and be worth a ton when you’re 70 or 80 years old…when you really can’t even enjoy it because your walk has turned into a hunched over hobble.

All this saving sounds kind of pointless, right? Why would you strive to be worth more than you earn in your life??

…This is the argument of those that ignore their debts, spend everything they have, and struggle mightily in their old age since they don’t even have two pennies to rub together….

The honest truth is, there is a balance. The only thing is, nobody can tell you where that balance is for you.

Why We’re Striving to Be Worth More Than the Average Bear

For my wife and I, we like to play it safe in life. And, we’re both mature enough to understand that we can’t always control our circumstances.

  • I could get hit by a car tomorrow and become a vegetable
  • Liz could be diagnosed with cancer
  • Maybe I become blind through some freak accident and I can’t work as a financial analyst or a blogger anymore!

We just don’t know. So, since there are so many unknowns in this world, we’d rather have more stashed away than less.

Don’t you feel the same? And really, it’s not that much of a sacrifice. We live in a 3 bedroom, 2 bath house, we have two cars that run great, and I have a job that allows me to spend a ton of time with my family. Where is the sacrifice in all of this? What, so we don’t fly to the Bahamas every month? Oh, poor us… 😉

Life is fantastic, especially the simple life like we have. We’ll continue to save up our money and as long as nothing terrible happens, we’ll soon be worth more than our lifetime earnings (and we’ll likely have a big smile on our faces because of it). 🙂

How about you? Will you be worth more than you earn in a lifetime someday? When do you think it will happen?

Battle of the Mind Investing Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. awesome data points, they really show, step-by-step, how to get there. You always do such an awesome job of that. A great morning read that will definitely keep me thinking about saving.

    • Love it! Thanks for the encouragement on the article. That always keeps me going as well! Have a great day, Jeff!

  2. That 10 year old in your example needs to have earned income for an IRA!

    Now…to go see how close we are to saving as much as we have earned!

    • Yeah true… Oh well, they could have just put the money into mutual funds through Vanguard. Same result! Haha, my readers are too smart!! Can’t slip anything by you… 😉

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