Money For the Rest of Us

How Much Should Your Net Worth Grow Each Year?

Jan 10, 2024

The podcast discusses the factors that shape the growth of net worth, including professional choices, risk tolerance, and lifestyle decisions. The speaker shares personal experiences of transitioning from a big organization to a small advisory firm, and eventually working for themselves. It emphasizes the importance of income, stability, and available opportunities in determining net worth growth. The chapter also explores personal growth, career choices, and managing oneself, including the impact of having a high net worth. It concludes by highlighting the challenges of determining net worth and the importance of maintaining flexibility and optionality in achieving the desired lifestyle.

26:19

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Episode notes

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Quick takeaways

Net worth growth should be balanced with a comfortable and sustainable level of spending.

Profession, risk tolerance, and lifestyle choices play key roles in determining net worth growth.

Deep dives

Understanding the Importance of Assessing Net Worth Growth

The podcast episode explores the topic of how much net worth should grow each year. The speaker shares the example of his son conducting an annual review of his spending, which sparked a discussion about the allocation of savings for various purposes. The speaker highlights their own practice of reviewing their spending using Monarch Money, a budgeting tool. They found that their spending habits had not significantly changed over the years. The speaker emphasizes the idea that as net worth grows, it is essential to prioritize a comfortable and sustainable level of spending without constantly striving for more.

Introduction

3min

Career, Lifestyle, and Financial Decisions

2min

Leaving Corporate Finance for a Small Advisory Firm

5min

From Consulting Firm to Self-Employment

8min

Determining Net Worth Growth Based on Profession and Lifestyle

2min

Personal Growth, Career Choices, and Managing Oneself

7min

Determining the Growth of Your Net Worth and Maintaining Flexibility

3min

The intricate dance between profession, risk, lifestyle, and luck in determining how net worth grows.

Topics covered include:

The various factors that shape the growth of net worth, including professional choices, risk tolerance, and lifestyle decisions.
David Stein's personal account of how these elements influenced the trajectory of his financial growth.
Insights into the range of net worth increases observed in 2023, driven by the performance of financial markets.
The importance of focusing on one's output quality and personal journey of wealth creation, rather than fixating on comparisons with others' net worth.

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Show Notes

Managing Oneself by Peter F. Drucker—Harvard Business Review

Soloing: Realizing Your Life's Ambition by Harriet Rubin—HarperCollins

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