What's a normal personal debt / equity ratio for a highly educated person?

Curious, are you asking about average, or the good numbers? The median family doesn't have $2500 to address an emergency. We are a nation of debtors, and spenders.

A young couple at .8 is doing well. It means they saved 20% for a down payment, and just bought a house. Not too tough to buy with 5% down, have no other savings, and a student loan to put the debt to equity over 100%.

Older people should be shooting for zero. I semi-retired at 50, and my mortgage is at about 8% of my net worth. 50% would be too high. Others 50+ should have at least 50% equity in their home and nearly half their "number," the amount needed to retire. So, a target is 25% maximum.

These numbers shouldn't impact you at all. You should plan wisely, spend frugally, and prioritize your goals. There are 'zero debt' people out there who make me look reckless, and others who invest in rentals with a goal of keeping them highly leveraged.

Neither group is wrong, what's right for you is what lets you sleep at night.

What is your biggest wealth building tool? Income. If you "nerf" your income with payments to banks, cable, credit card debt, car payments, and lattes then you are naturally handicapping your wealth building. It is sort of like trying to drive home a nail holding a hammer right underneath the head.

Normal is broke, don't be normal.

Normal obtains student loans while getting an education. You don't have to. You can work part time, or even full time and get a degree.

As an example, here is one way to do it in Florida. Get a job working fast food and get your associates degree using a community college that are cheap. Then apply for the state troopers. Go away for about 5 months, earning an income the whole time. You automatically graduate with a job that pays for state schools. Take the next three years (or more if you want an advanced degree) to get your bachelors. Then start your desirable career.

What is better to have "wasted" approx 1.5 years being a state trooper, or to have a student loan payment for 20 years? There is not even pressure to obtain employment right after graduation. BTW, I know someone who is doing exactly what I outlined.

Every commercial you watch is geared toward getting you to sign on the line that is dotted, often going into debt to do so. Car commercials will tell you that you are a bad mom or not a real man if you don't drive the 2015 whatever.

Think differently, throw out your numbers and shoot for zero debt.

EDIT: OP, I have a MS in Comp Sci, and started one in finance. My wife also has a masters. We had debt. We paid that crap off. Work like a fiend and do the same. My wife's was significant. She planned on having her employer pay it off for each year she worked there. (Like 20% each year or something.) Guess what, that did not work out! She went to work somewhere else! Live like you are still in college and use all that extra money to get rid of your debt. Student loans are consumer debt.

The problem with having no debt at all and relying totally on your income from working is that if you lose your job you'll have no income.

Now there are 2 types of debt: good debt and bad debt. You should stay away from bad debt. But good debt is good — it should produce an income higher than the interest payments on the debt. Good debt will help you supplement your income from work and eventually replace your income from work.

I have over $2M in good debt, have been semi-retired since 42, and sleep very well at night. By the way I also have zero bad debt.

As Joe says, you have to be at a level you are comfortable with, can sleep at night, and try to limit your bad debt by showing some delayed gratification when you are starting off.

0.8 and 0.5 are fairly common numbers for Debt to Asset Ratios. I agree it is confusing since most places on the internet talk about Debt to Asset Ratio, and even here most commenters used Debt to Asset Ratios when responding.

In order to have a Debt to Equity Ratio of .8, someone would have to have 100% of their equity in additional assets after buying a house. e.g. After buying a $300k house with 20% down, they'd have to have $300k in assets in the bank above and beyond the downpayment. Ya, I agree that someone out of college isn't going to achieve that easily or realistically.

Regarding your question. A person that buys a house at 20% down is typically considered be doing "ok" to "good". Debt to Asset puts that person at .8 (80%), but Debt to Equity Ratio puts that person at 4 (400%). So in an extremely basic over simplification, I'd say having a Debt to Equity Ratio under 4 is doing pretty good, and over that is less so.

Say around the age of 50, someone paying a house half down and having 100% of the home's value in additional assets (nest egg) puts the Debt to Asset Ratio to .25 (25%) and the Debt to Equity Ratio to .33 (33%).

Buying a house with 5% down and no other assets puts someone at a Debt to Asset Ratio of .95 (95%) and a Debt to Equity Ratio of 19 (1900%).

Shortly after college (Engineering BS/MS) my wife & I started buying rental property for 15% down. Within a year of purchase they were cash flow positive. Luckily in our area housing has appreciated 7.5% annually. We treated it like a business and always refinanced to lower interest rates or pulled out cash to buy additional properties. My present debt/equity is 18%. I'm getting ready to retire (late actually) and plant to sell off one property to zero my debt. I also delayed taking SSI until I was maxed out on the benefits I would receive. Again, I always treated my finances as a business.