Net worth
How to calculate net worth
Add up the value of all your assets — cash, bank balances, investments, retirement accounts, property, vehicles, and anything else of meaningful value. Then subtract all your liabilities — credit-card balances, loans, mortgages, and any other debt. The difference is your net worth.
Why it matters more than income
Income tells you how much money flows through your hands in a given period. Net worth tells you how much you actually keep. Two people earning the same income can have wildly different net worths depending on how they spend, save, and invest. Net worth is the better long-term scoreboard.
How to grow net worth
Three levers: spend less than you earn, invest the difference into appreciating assets, and avoid bad debt. Net worth compounds over decades — small consistent improvements have outsized effects over a working lifetime.
Median US household net worth by age
Net worth varies dramatically with age — but the curve is mostly about time invested, not income.
| Age of head of household | Median net worth (USD) |
|---|---|
| Under 35 | $39,000 |
| 35-44 | $135,600 |
| 45-54 | $246,700 |
| 55-64 | $364,500 |
| 65-74 | $409,900 |
| 75+ | $335,600 |
Source: Federal Reserve Survey of Consumer Finances (2022, latest release)
