Last updated: March 2026
What Is Net Worth?
Net worth is the single most important number in personal finance. It is the difference between everything you own (assets) and everything you owe (liabilities). Unlike income, which measures cash flow, net worth measures accumulated wealth. A person earning $200,000 per year with $300,000 in debt has a lower net worth than someone earning $60,000 with a paid-off home and retirement savings.
The formula is simple: Net Worth = Total Assets − Total Liabilities. According to the Federal Reserve’s 2022 Survey of Consumer Finances, the median net worth of all U.S. families is $192,900, while the average is $1.06 million. The gap between median and average reveals how skewed wealth distribution is — the top 10% of households have a median net worth of $3.79 million.
How to Calculate Your Net Worth
Step 1: List all assets at current market value. Include bank accounts, investment accounts, retirement accounts (401k, IRA, Roth IRA), real estate (use Zillow or recent appraisal), vehicles (Kelley Blue Book private-party value), cryptocurrency, business equity, and valuable personal property.
Step 2: List all liabilities at current balance. Include mortgages, student loans, auto loans, credit card balances, personal loans, medical debt, tax debt, and any other money you owe. Use the payoff balance, not the original loan amount.
Step 3: Subtract liabilities from assets. The result is your net worth. If the number is positive, your assets outweigh your debts. If negative, you owe more than you own — which is common early in life and completely recoverable.
This calculator handles all the math automatically and provides visual charts so you can see exactly where your wealth is concentrated and where your debt sits.
Average Net Worth by Age
The Federal Reserve’s Survey of Consumer Finances (SCF) is the gold standard for household wealth data. Here is the 2022 data by age group:
Under 35: Median $39,000, average $183,000. Most wealth at this age comes from savings and retirement accounts. Student loans and auto loans are the biggest liabilities. If you have a positive net worth before 35, you are ahead of half your peers.
35–54: Median $135,000–$247,000, average $549,000–$975,000. This is when home equity and retirement accounts start compounding. Career earnings peak, and mortgage paydown accelerates wealth growth.
55–74: Median $364,000–$409,000, average $1.57M–$1.79M. Peak net worth years. Retirement accounts are largest, mortgages are often paid off, and home values have appreciated. The gap between median and average is widest here.
A common rule of thumb from Fidelity: aim for 1x salary saved by 30, 3x by 40, 6x by 50, and 8x by 60.
How to Increase Your Net Worth
Eliminate high-interest debt. Credit card debt at 20%+ is the biggest net worth killer. Every $1,000 in credit card debt that lingers costs you $200+ per year in interest. Use the debt avalanche method: pay minimums on everything, then throw all extra cash at the highest-rate debt.
Maximize retirement contributions. A 401(k) match is free money. If your employer matches 50% up to 6%, contributing 6% of a $75,000 salary gets you $2,250 in free employer contributions annually. Over 30 years at 7% returns, that match alone grows to over $200,000.
Invest consistently. The S&P 500 has averaged roughly 10% annually over the long term (about 7% after inflation). Investing $500 per month starting at age 25 grows to over $1.1 million by age 60 at a 7% real return. Time in the market beats timing the market.
Increase your income. The fastest way to grow net worth is earning more. Negotiate raises, switch jobs (job-hoppers earn 10–20% more than those who stay), develop high-value skills, or build side income. Every extra dollar earned and invested compounds over decades.
Frequently Asked Questions
What counts as an asset for net worth?
An asset is anything you own that has monetary value. This includes real estate (market value, not purchase price), vehicles, investment accounts (brokerage, stocks, bonds, mutual funds), retirement accounts (401k, IRA, Roth IRA, pension), cash and savings accounts, cryptocurrency, business equity, jewelry, collectibles, and life insurance cash value. Use current market values, not what you originally paid.
Is home equity part of net worth?
Yes, but you should list the full market value of your home as an asset and your remaining mortgage balance as a liability. The difference (home equity) is automatically included in your net worth. For example, a $400,000 home with a $250,000 mortgage adds $150,000 to your net worth. Use sites like Zillow or Redfin for a current estimate.
What is a good net worth for my age?
According to the 2022 Federal Reserve Survey of Consumer Finances, the median net worth by age is: under 35: $39,000; 35-44: $135,000; 45-54: $247,000; 55-64: $364,000; 65-74: $409,000; 75+: $335,000. Averages are much higher due to wealthy outliers. A common rule of thumb is that by age 30 you should have 1x your annual salary saved, 3x by 40, and 6x by 50.
Should I include my car in my net worth calculation?
Yes, include vehicles at their current private-party sale value (not dealer retail or what you paid). Check Kelley Blue Book or Edmunds for estimates. Also include any remaining auto loan as a liability. A car worth $20,000 with a $12,000 loan adds $8,000 to your net worth. Remember that cars depreciate fast, so update the value regularly.
How often should I calculate my net worth?
Most financial advisors recommend tracking net worth quarterly or at minimum twice a year. Monthly tracking can create anxiety due to market fluctuations. Quarterly check-ins let you spot trends, measure progress toward goals, and catch problems early. The best approach is to pick a consistent schedule and stick with it.
What if my net worth is negative?
A negative net worth means your debts exceed your assets. This is common for recent graduates with student loans, new homeowners, or anyone recovering from financial setbacks. It is not permanent. Focus on three things: (1) pay down high-interest debt first (credit cards), (2) build an emergency fund, and (3) increase retirement contributions. Most people move from negative to positive net worth within 5-10 years of starting their career.