I got to a net worth of $200,000, became debt-free, and started building generational wealth: Here's my best advice

"Small steps can make a big difference."

Tim Stobierski is the founder of Student Debt Warriors.
Courtesy Tim Stobierski

When I think about the story of my financial life up until this point, I think that it can best be summarized as a story about catching up. I've spent the last 10 years digging myself out from a trap caused by a little over $60,000 in student loans and $15,500 of credit card debt.

Carrying this debt for so long made it difficult to begin building wealth. My lack of savings led to a lack of stability and stress that affected my relationships with loved ones, employers, and even my own personal and mental health. 

I am proud to say that my story has been moving in a positive direction, slowly at first, but with increasing speed each passing year.

In 2017, I celebrated the fact that I had reached a $0 net worth. It might sound odd, but it was a major milestone for me. That's because two years earlier I had a net worth of -$53,554.24. Hitting zero meant that I had finally accrued enough assets to completely cancel out my debts. 

How small steps can make a big difference

That $0 net worth felt like I was officially starting over with a clean slate. It was a freeing moment made possible thanks to a combination of small actions I took over time.

  • I regularly tracked my net worth so I could watch my progress in real time
  • I built an emergency fund to offer myself a stable foundation upon which to build
  • I developed a plan to tackle my debt and prioritized the loans with the lowest balances first so that I could free up money in my budget
  • I started investing on a regular, consistent schedule, primarily into low-cost ETFs
  • I started a freelance writing side hustle and created a site called Student Debt Warriors to provide resources to other people dealing with student loans. Both of those side hustles have helped me earn additional income that I use to tackle my financial goals.

In January of 2020, I officially made my last student loan payment. That June, my net worth passed the $100,000 mark

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In February of this year, I made the final payment on my credit card balance, which I had converted into a personal loan with a lower interest rate, and I officially became debt-free. That same month, my net worth passed $200,000, thanks in part to a more aggressive saving strategy and consistent, weekly investing, continuing my focus on ETFs

While I am far from fully reaching the financial goals that I've set for myself, I am much closer to reaching them than I ever thought I would be. 

How building generational wealth fits into my financial plan

Though I don't currently have children of my own, one of my cousins recently gave birth to a beautiful, healthy baby girl, and another cousin has her first child on the way. I now find myself in a financial situation where I have the means, and the personal experience, to help this new generation of my family begin building wealth so that they can hopefully avoid making the same mistakes that I made.

There is no one right way to begin building generational wealth. You can accrue as much as possible and pass it on to your heirs as an inheritance. You can build a business or buy property and leave it for your family. You could establish a trust that provides them with an income and gives them rules on how to spend it.

In 2017, I celebrated the fact that I had reached a $0 net worth. It might sound odd, but it was a major milestone for me.

My plan is relatively simple.

Whenever a new child is born into my family, I plan to open a custodial account in their name and seed it with $1,000. I will account in my budget for contributions of $10 per month, or $120 per year, up until their 18th birthday, similar to the concept of "baby bonds" that has recently been in the news.

At that point, I'll turn the contents of the account over to them to do with it what they will. If they want to use the money in their account to pay for college, they can. They could also use it to buy a car or as a down payment on a home or to fund a wedding or to start a business. They can even hold onto it, without touching it, so that it continues to grow well into their retirement.

Before I turn it over to them, I plan to have a discussion about the importance of saving and investing and the true power that compound interest can make.

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How I'll teach the next generation about the power of compounding

Following the plan that I've outlined above, assuming an 8% average annual return, $1,000 invested shortly after the child is born would grow into a total of $8,196 dollars on their 18th birthday. Of that $8,196, $1,000 would come from the initial balance, $2,040 would come from my monthly $10 contributions, and $5,156 would come from growth.

So after 18 years, the account would hold more than eight times what it held on day one. This in and of itself is a powerful lesson about how time and compound interest can impact your finances

I'll also plan to show them two other scenarios before I turn the funds over to them. In the first scenario, they leave that money invested in the account, where it continues earning an average annual return of 8% from the time they are 18 until they are 67. At the end of that time, the account would hold $407,744.

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In the second scenario, they would also leave the money alone so that it continues to grow at an average annual rate of 8% until they are 67, only this time they would make a contribution of $500 per month, of $6,000 per year, enough to fund an IRA. The difference is at the end of that time, they would have a total of $4,063,922, and only $294,000 would come from their own contributions.

That is the kind of illustration that can have a lasting impact on how someone views their finances, and I think it is more valuable than whatever the actual balance of their account ends up being. I know that kind of lesson would have had a big influence on me at a young age. 

I'm still working toward my own personal money goals, which include purchasing a house, building my net worth to at least $1 million, and achieving financial independence. But thanks to the steps I have taken to this point, I feel comfortable setting aside money each month to help make a lasting and positive financial impact on the future generations of my family.

Tim Stobierski is an inbound marketing consultant at Pepperland Marketing, a freelance writer and editor, and the founder of, a website dedicated to helping college students and graduates understand the complicated world of student loans. He was formerly in the publishing industry.

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