Have you ever wondered what net worth puts you in the top 10% of Canadians for your age cohort?
The data is surprisingly hard to find in one place, but it can be pieced together from multiple sources, such as Statistics Canada. In this article I will share the net worth that puts you in the top 10% of Canadians by age.
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The data
Drawing on multiple data sources — Statistics Canada, Canadian Housing Statistics, Bank of Montreal and others — I pieced together rough estimates of Canadians’ net worth by age bracket.
To be in the top 10% of Canadians by your age group, here’s what your net worth needs to be:
- Younger than 35: $350,000
- 35 to 44: $900,000
- 45 to 65: $2.5 million
- Older than 65: $3,000,000
If your net worth is at or above these levels, then you are in the top 10% your age bracket.
Factors that go into determining your net worth
If you’re looking at the figures above and thinking “whoa, I’m way behind!,” there’s no need to panic. There are many factors that go into determining a person’s net worth, and not all of them are things you would necessarily think of. Among the obvious things (cash, savings accounts, stocks, GICs), there are other things that go in to determining your net worth:
- Home equity. Your home’s value less your amount of mortgage yet to be paid off, is considered an asset. It’s possible for the price of a home to decline to a level where you have negative equity, but in Canada in recent years, this has been uncommon. Some homeowners were hit with negative equity in 2022, when housing markets across the country dipped.
- Your car. Although cars depreciate in value, they usually have some residual value that counts as equity for their owners.
- Electronics. Some electronics, such as Apple products, hold their value surprisingly well, and can be considered assets.
The ‘slow and steady’ way to grow your net worth
If you feel like you are a little behind on your net worth, you need to come up with a game plan for increasing your wealth. Working and living beneath your means are two indispensable pieces of the puzzle.
You also need to invest. Stashing away money year after year works to an extent, but such money is constantly being eaten away by inflation. To really maximize your net worth, you need assets.
As for what you should invest in: stocks, index funds, guaranteed investment certificates (GICs), money market funds, and more.
Among individual stocks, large cap dividend stocks are often good performers. Companies like The Toronto-Dominion Bank (TSX:TD), pay steady dividends that tend to rise over time. TD specifically pays a dividend that yields 4.7%, meaning that you get a decent percentage of your investment each year even if the stock price goes nowhere.
TD is a staple of many Canadian retirees’ portfolios. Owing to its conservative lending practices, high capital ratios and aggressive but prudent expansion strategy, it has stood the test of time. Today, it faces certain risks, especially in its U.S. business, which is being investigated for money laundering. Over the very long term, it appears likely to continue succeeding.
By holding TD and other defensive large-cap dividend stocks in your portfolio, you’re more likely than not to grow your wealth. If you stick you such a strategy, you will likely end up with a sizable net worth.
