The JSE and finance forum for South Africa
General Category => Shares => Topic started by: santoshlv426 on June 27, 2017, 02:55:29 pm
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There's a lot of info on this forum, with each person or couple in a unique financial space. I'd start a survey if I knew how, but I would like to suggest that we - anonymously - survey Net Worth vs. Age & Occupation.
For someone like myself, 40 years old and have been unemployed for 2 years now, my Net worth is nearing a figure not worth mentioning.
But if my situation was anything normal, where should I be in terms of Net worth in relation to my age group ?
Or maybe a few replies to this post would be good and give us seeking similar advice an idea
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I for 1 will be to embarrassed to say my net worth ... :whistle:
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Will put us to shame !
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I think it's a fantastic idea. And hopefully results won't be shown until at least 100 people participate. I'd happily volunteer to analyse the results from the data as I have a stats background.
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Well, according to Payscale, the average South African earns the following salaries:
Less than 1 year experience: R135k
1 to 4 years experience: R154k
5 to 9 years experience: R231k
10 to 19 years experience: R293k
more than 20 years experience: R356k
Taking these numbers and assuming a savings rate of 20% and the ability to grow your assets by 10% a year, your projected net worth for the number of years working should be:
Year Net worth
0 R0
1 R27,000
2 R58,300
3 R94,330
4 R135,563
5 R182,519
6 R238,371
7 R304,008
8 R380,409
9 R468,650
10 R569,915
11 R682,107
12 R806,317
13 R943,749
14 R1,095,724
15 R1,263,696
16 R1,449,266
17 R1,654,193
18 R1,880,412
19 R2,130,053
If your net worth is above the average numbers you are doing well.
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I wouldn't work on the published payscale numbers. Clearly many of the guys on this forum for example have 2-5x that of R2M at retirment or more.
@ Joe, that would be great, but it's getting the info - I don't know how to set it up on this site, except viewing the responses and manually collating the data.
If people respond, I'll track collate and we can work together.
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I am not quite sure what the objective is with this survey - is it to determine the wealth of the respondent at a given age?, or is it to determine the potential wealth within the frame work of the respondents job class?. Also once you have concluded the survey how will the data be used - to drive readers of the survey into a particular job family? or to sit back and hope that at a given age they should be able to enjoy a given wealth. As an example in my company which I worked for your primary earning years are between ages 38 and 54 - beyond that age you are a target for low increases, and/or retrenchment because you cost to company is excessive, especially in a deflating economy, and where the company is looking to ways and means to reduce staff costs to company, and they will always focus on senior management and the level below that because that's where the costs are, they never target the ranks above senior management, because that would be disruptive to spans of control and other emoluments that these guys enjoy.
So my advice would be consider very carefully what you expect your outcomes to be and then how they should be interpreted, further ensure that your survey questions are unambiguous, not open to interpretation and can't be massaged
Have fun with the compilation
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Well, according to Payscale, the average South African earns the following salaries:
Less than 1 year experience: R135k
1 to 4 years experience: R154k
5 to 9 years experience: R231k
10 to 19 years experience: R293k
more than 20 years experience: R356k
Taking these numbers and assuming a savings rate of 20% and the ability to grow your assets by 10% a year, your projected net worth for the number of years working should be:
Year Net worth
0 R0
1 R27,000
2 R58,300
3 R94,330
4 R135,563
5 R182,519
6 R238,371
7 R304,008
8 R380,409
9 R468,650
10 R569,915
11 R682,107
12 R806,317
13 R943,749
14 R1,095,724
15 R1,263,696
16 R1,449,266
17 R1,654,193
18 R1,880,412
19 R2,130,053
If your net worth is above the average numbers you are doing well.
Those numbers are unrealistic considering one doesn't start out debt free and need a car etc. At age 40, with 19 years of experience, your gross is R30k and take home just over R24k. That person probably has one or two kids, school fees, a bond/rent, health insurance for the whole family, food, fuel etc. - it'll be hard to take 20%/R6k and save it.
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
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EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
Surely your pension fund is part of your net worth calculation.
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EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded
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EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
Surely your pension fund is part of your net worth calculation.
I meant that if the average person doesn't have a pension "forced" on him he'll most likely not save that much at all.
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EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded
My point is that money saved in your pension fund is part of your net worth. If you contribute 20% a month to your pension, you are saving 20% essentially. I don't think we should make this stuff too complicated.
A person with R1m in their pension fund and nothing else is better off than a person with nothing at all.
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EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded
My point is that money saved in your pension fund is part of your net worth. If you contribute 20% a month to your pension, you are saving 20% essentially. I don't think we should make this stuff too complicated.
A person with R1m in their pension fund and nothing else is better off than a person with nothing at all.
MC - I hear you, but, also don't want to labour the point but if you take ones pension present and future value into account then you might as well add future values to your Living Annuities (provided your draw down is less than 5%) and the future market value of your house (s) less any outstanding bond. Maybe I determine wealth differently
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I like the idea of a quick survey. If we have just a few questions we can use survey monkey. I'll happily promote it in my next blog post. What we need to do is define the questions. We can use a dropdown for age, and need to do the same for occupation, though we'll need quite general categories for that. For net worth if we work in actual whole numbers we don't need to worry about the categories. Any other thoughts?
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That sounds good to me
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I like the idea of a quick survey. If we have just a few questions we can use survey monkey. I'll happily promote it in my next blog post. What we need to do is define the questions. We can use a dropdown for age, and need to do the same for occupation, though we'll need quite general categories for that. For net worth if we work in actual whole numbers we don't need to worry about the categories. Any other thoughts?
Together with the net worth per occupation numbers, I would also be very interested to see how much debt people are carrying. I think you will also have to specifically state what people should be adding as net worth and debt items. People play insane mind games with themselves. I know this one woman who told me she has no debt. Later on she admitted to having student loans. When I asked her whats up with that, she told me she doesn't see her student loans as debt, instead she sees her student loans as an "investment". Lol, maybe she was embarrassed about her loans, or maybe not.
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To keep it simple, I'd seek answers to the following
State your...
1. House Value
2. Car Value
3. Outstanding Mortgage and Car Loan.
Asset Net Worth = 1 + 2 - 3
4. Cash
5. Pension/Provident and or RA (Sum it all up)
6. Total investments (Shares, unit trusts, bonds) Value
Net Worth = Asset Net Worth + (4+5+6).
Age
Occupation
Still Working or Retired.
I think not to make it too complex, that should cover it.
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To keep it simple, I'd seek answers to the following
State your...
1. House Value
2. Car Value
3. Outstanding Mortgage and Car Loan.
Asset Net Worth = 1 + 2 - 3
4. Cash
5. Pension/Provident and or RA (Sum it all up)
6. Total investments (Shares, unit trusts, bonds) Value
Net Worth = Asset Net Worth + (4+5+6).
Age
Occupation
Still Working or Retired.
I think not to make it too complex, that should cover it.
What about businesses you own?
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I have previously made comments regarding the intended survey, and, as much as the intent is to make it simple, by its very nature it will produce conflicting results because the parameters are open to interpretation. As an example I will answer your 1st 3 questions:-
House R 1.6 million (municipal valuation)
Car R400,000 (purchased in 2014 for R 650,000 deflated for loss of value over time)
Outstanding debt bond R34,000 and car loan R 94,000 - R 128,000
Realistically my house has no worth to my estate until I die nor my car as it is a depreciating asset so it does not constitute any part of what I can net wealth
Also with point 5 - my pension which I receive monthly merely enables me to live comfortably and I don't have to look elsewhere to augment the pension to survive, and there is scope within that pension to meet all my monthly commitments, and ultimately save funds to service all my debt, and make annual capital reductions on my motor vehicle. My bond is in place with the above outstanding amount due to me making a large capital reduction on the car, and my bond is also used when I want to buy shares on the open market
So if I plugged in all my numbers I think it will skew your survey and I don't doubt that others on this forum will also skew the results and it will be life cycle based. Without being unkind even the fact that you have been unemployed for 2 years will skew the results probably the other way - so if you are trying to get a creditable dispersion - then you won't
Needless to say forge on with your survey and lets see what the results show
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I tend to agree with GCR on this. I am an engineer working for a large engineering company and earn relative to my peers a median salary. However, my net worth is probably significantly more than those earning significantly more due to my chosen lifestyle ie making occupation not that relevant. Patrick himself is a good example too...
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Realistically my house has no worth to my estate until I die nor my car as it is a depreciating asset so it does not constitute any part of what I can net wealth
Are you serious? Have you been reading Robert Kiyosaki books?
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Realistically my house has no worth to my estate until I die nor my car as it is a depreciating asset so it does not constitute any part of what I can net wealth
Are you serious? Have you been reading Robert Kiyosaki books?
No but obviously you have - your point being?