The typical 25-year-old Australian probably has net worth of $10,000 to $20,000, a car worth slightly more than the debt on it and a few personal possessions. Some have negative net worth. The typical 65-year-old Australian probably has net worth of more than $500,000. Some have much more.

Net worth is what we could sell all our assets for less the value of all our debts. The 25-year-old may think it is impossible that they will ever reach the asset level of the 65-year-old, other than by windfall gain such as a large inheritance.

They may even think the tax and political systems are inequitable between generations. With the current price of houses, it appears that way.

What is the road between those two circumstances? How does the 25-year-old get on track to high net worth and financial independence? It is a lifetime project but can be done.

The first step is to get a job paying reliable income. Any job will do initially. Obviously the higher paying the better, so education and training will be important. Learning and growing skills should continue throughout one’s career, thereby earning more income.

The next step is to spend less than we earn. Save a little each payday. This requires discipline. Set up an auto debit into a savings account on payday. When the balance reaches say $2,000 start buying investments. Managed funds are the easiest and can include a regular savings plan.

Keep saving and investing. In a few years there should be enough for a house deposit. Buy a home, preferably with potential for improvement. Work on improving the home. Pay down the mortgage steadily and, as time passes, the value will grow. Net equity in the home will increase surprisingly.

As the home equity increases borrow against it to buy investments. It could be another property, shares, or managed funds. The path won’t always be smooth sailing, sometimes things will go wrong temporarily. Sticking at it will ensure wealth grows.

As equity increases, further opportunities to buy good assets will arise. Sometimes difficult periods allow quality purchases at favourable prices.

The superannuation system allows highly tax-efficient wealth building so it’s important to understand and use it to advantage. Restrictions can be reduced by using a self-managed super fund to allow personalised investment choices.

It is important to keep assets fully insured. We should also have a healthy level of life, disability and personal insurances, in case of disaster. Maintain discipline and spend wisely. Allocate time regularly to review, adjust, and keep personal finances up to date.