Did you know the average net worth for people living in the U.S. is $692,100?
If you’re thinking that sounds high, then you’re right. I mean, I don’t know very many people with a $700K net worth.
The average net worth is misleading because the numbers are skewed by the ultra-wealthy. A better statistic to look at is the median, which is the mid-point of all data being analyzed.
Now, the median net worth for people living in the U.S. is $97,300. Breaking that down, the median net worth for millennials (ages 25 to 29) is $8,972 and millennials (ages 30 to 34) is $29,125.
These statistics are fun trivia, but they’re only useful if you know your own net worth for comparison purposes. Knowing how your net worth compares to others in your age group gives you a good reference point to determine how you’re doing financially.
It also gives you a personal reference point to measure how you’re improving your wealth over time.
In this guide, you’ll learn everything you need to know about personal net worth.
Follow along to learn how to calculate net worth, what it means and why it’s important. You’ll even find answers to the most common net worth questions including net worth statistics by age, education status and ethnicity.
By the end of this, you’ll know exactly how to answer the City Girls in Drake’s song when they ask you “What’s ya net, net, net worth?!”
How to calculate net worth, what it means and why it’s important
Your personal net worth is important because it’s a measure of your financial position and wealth.
Similar to how your blood pressure or BMI is a personal health indicator, your net worth is your personal wealth indicator.
Now, in order to truly understand net worth, you need to understand its definition.
“Net worth is the market value of your personal assets (what you own) minus your personal liabilities (what you owe).”
Using this definition, your net worth is the amount of wealth (money and assets) you have left over after paying off all of your personal debt.
Now that we have a common definition for net worth, let’s move on to learn how to calculate it.
How to calculate your net worth
Follow the 3 simple steps below to calculate your net worth.
- Add up the value of all your personal assets (what you own)
- Add up the value of all your personal liabilities (what you owe)
- Subtract your liabilities from assets to calculate your net worth
Let’s tackle each of these steps one-by-one.
1) Determine the value of your personal assets
Your assets include everything you own that has a monetary value. Below is a list of common assets to include in your net worth calculation. These are not all possible assets you could include, but they are the most common.
- Cash
- Money in Savings & Checking accounts
- Retirement Accounts (e.g. Traditional & Roth 401Ks and IRAs)
- Money in College Funds (e.g. 529 Plans) & Healthcare accounts (e.g. HSAs, FSAs)
- Investment accounts (e.g. Index Funds, REITs, Individual Stocks)
- Real Estate investments (e.g. Rental Homes, Commercial Property)
- Personal Property (e.g. Home, Vehicles, Jewelry, Art)
Many people do not include their home, jewelry or art in their net worth calculation since those assets don’t provide any income and the owners never intend to sell them. It’s your choice how you want to treat personal property.
To calculate the value of your assets, make a list of every asset you have. Then, log in to all of your accounts and write down the current market value of each one.
For real estate, many people pull the current market value from Zillow.com or Realtor.com. You can pull your current vehicle value by entering your details at Kelley Blue Book.
Once you have the amounts for all of your assets listed, add them up to calculate your total current asset value.
Next, you need to follow the same approach to add up all of your current liabilities, or debt.
2) Determine the value of your personal liabilities
Your liabilities include everything you owe to others. Below is a list of common liabilities to include in your net worth calculation. Again, this is not a comprehensive list, but they are the most common.
- Student loan debt
- Credit card debt
- Personal loans
- Vehicle loans
- Mortgage debt (e.g. Home, Rental Homes, Commercial Property)
- Jewelry debt (e.g. wedding rings)
If you don’t include your home or jewelry in your assets, then you can exclude the debt tied to them from your liabilities. It’s your choice. Personally, I include them in my net worth calculation.
Once you have a list of all your personal liabilities, log into each of your accounts and pull the current amount you owe. This is also called your pay off amount.
Now that you have every detail, add them up to calculate your total current liabilities.
3) Determine your current net worth
Your final net worth calculation is the easiest! All you have to do is subtract your total liabilities from your total assets to calculate your personal net worth.
Net Worth = Total Assets – Total Liabilities
Keep reading to learn how your net worth compares to others in your age range and for answers to common questions you may have.
Your net worth questions answered!
Listed below are answers to the most common net worth questions I hear.
What is the average and median net worth by age in the U.S.?
Refer to the table below for the average and median net worth by age and generation in the United States.
| U.S. Net Worth by Age & Generation | |||
| Generation | Age Range | Average | Median |
| Gen Z (Centennials) | 18 to 24 | $93,983 | $4,395 |
| Gen Y (Millennials) | 25 to 29 | $39,566 | $8,972 |
| Gen Y (Millennials) | 30 to 34 | $95,236 | $29,125 |
| Gen Y (Millennials) | 35 to 39 | $257,582 | $40,667 |
| Gen X | 40 to 44 | $316,661 | $87,843 |
| Gen X | 45 to 49 | $599,194 | $105,717 |
| Gen X | 50 to 54 | $838,703 | $137,867 |
| Baby Boomers | 55 to 59 | $1,150,038 | $168,044 |
| Baby Boomers | 60 to 64 | $1,180,378 | $224,775 |
| Baby Boomers | 65 to 69 | $1,056,484 | $209,575 |
| Baby Boomers | 70 to 74 | $1,062,428 | $233,614 |
| ALL | $692,100 | $97,300 | |
| Source: 2016 U.S. Federal Reserve Survey of Consumer Finances | |||
| Note: based on age of head of household | |||
What is the average and median net worth by ethnicity in the U.S.?
Refer to the table below for the average and median net worth by ethnicity in the United States.
Key findings:
- White/Caucasian people have 10 times the median net worth of African Americans
- White/Caucasian people have 8 times the median net worth of Hispanics
| U.S. Net Worth by Race & Ethnicity | ||
| Education | Average | Median |
| African American | $138,000 | $17,100 |
| Hispanic | $191,200 | $20,600 |
| Other | $457,700 | $64,700 |
| White / Caucasian | $933,700 | $171,000 |
| Source: 2016 U.S. Federal Reserve Survey of Consumer Finances | ||
| Note: based on race of respondent | ||
What is the average and median net worth by education in the U.S.?
Refer to the table below for the average and median net worth by education status in the United States.
Key findings:
- People with a college degree have 8 times the median net worth of those with no high school diploma
- People with a college degree have 4 times the median net worth of those with a high school diploma or some college
| U.S. Net Worth by Education Status | ||
| Education | Average | Median |
| No High School Dipoloma | $157,100 | $22,800 |
| High School Diploma | $249,500 | $67,100 |
| Some College | $340,500 | $66,000 |
| College Degree | $1,511,100 | $292,100 |
| Source: 2016 U.S. Federal Reserve Survey of Consumer Finances | ||
| Note: based on education of head of household | ||
What is the best net worth tracker?
Since your net worth helps you measure your wealth, you’ll want to track it to monitor your progress. But, manually calculating net worth can be tedious. Luckily, there are online tools that automatically calculate your net worth for you!
One of the best and most popular net worth tools is Personal Capital. It securely pulls data from your asset and liability accounts so you can view your entire personal finances in one dashboard. Their financial tools are free to use and help you really get control of your financial life.
Create your free Personal Capital account now to track your personal net worth!
How do I increase my net worth?
It’s important to know that your net worth can increase or decrease by things that are in your control and out of your control.
Examples of things that are out of your control are stock market swings or the current market value of your home. Knowing this, you should focus on the things that are under your control.
The easiest way to increase your net worth is to earn more money through your job or side hustles. But, earning more money isn’t enough! You’ll only increase your net worth if you use your income wisely.
You can increase your net worth by using your income to pay off debt or invest in assets, such as your retirement accounts or high-yield savings accounts. The less you spend on stuff, the more money you have to save and invest.
What does a negative net worth indicate?
A negative net worth means you owe others more than you own. This basically means you have no wealth accumulated.
If for some reason you had to sell all of your assets to try and pay off all of your debts, then you’d still owe people money and have zero assets remaining. This is a recipe for bankruptcy. All it takes is to get laid off from work and struggle to find another job to end up in bankruptcy.
None of us want to end up in this situation, which is why it’s important to increase your net worth and pay off all of your debt as soon as possible!
How often should I calculate my net worth?
When you’re just getting started, I recommend tracking your net worth monthly. I usually calculate my net worth the last day of every month to see where I stand financially.
The benefit of tracking it monthly is that you’ll start to see how much it increases or decreases by things that are in and out of your control.
After you feel comfortable with your net worth and how it changes over time, I recommend monitoring it quarterly. That should be often enough.
Calculate your net worth and starting increasing your wealth today!
You now have everything you need to calculate your net worth and start increasing your wealth.
So, take your next steps now! Calculate your net worth, increase your income, pay off your debt, increase your savings & investments, and watch your net worth grow!
