Quick answer
Net worth is everything you own minus everything you owe: total assets (cash, investments, retirement accounts, home and car value) minus total liabilities (mortgage, loans, credit card balances). Tracking it shows whether you're actually building wealth, which income alone can't tell you.
Your net worth is the single best snapshot of your financial health. It's the answer to the question: "If I sold everything I own and paid off everything I owe, how much would I have left?"
The Simple Formula
Net Worth = Total Assets − Total Liabilities
Assets (What You Own)
- Cash and savings accounts
- Retirement accounts (401k, IRA, Roth IRA)
- Investment accounts (brokerage, HSA)
- Real estate (estimated market value)
- Vehicles (current market value, not what you paid)
- Other valuable property
Liabilities (What You Owe)
- Mortgage balance
- Car loans
- Student loans
- Credit card balances
- Personal loans
- Any other debts
Net Worth by Age: How Do You Compare?
Using Federal Reserve data, here are the median net worth figures for American households:
| Age Group | Median Net Worth |
|---|---|
| Under 35 | $39,000 |
| 35–44 | $135,600 |
| 45–54 | $247,200 |
| 55–64 | $364,500 |
| 65–74 | $410,000 |
| 75+ | $335,600 |
Why Net Worth Matters More Than Income
High income doesn't guarantee wealth. Someone earning $200,000 with $180,000 in expenses has less financial security than someone earning $60,000 with $30,000 in expenses and $200,000 invested.
Net worth captures the full picture:
- Progress over time: Is your wealth actually growing?
- Debt impact: How much is debt holding you back?
- Retirement readiness: Are you on track?
- Financial freedom: How close are you to having enough?
How to Grow Your Net Worth
- Increase the gap between income and spending
- Pay down debt — especially high-interest debt (use the Debt Payoff Calculator)
- Invest consistently — even small amounts compound dramatically over decades
- Avoid depreciating assets — cars, electronics, and luxury items lose value
- Track it regularly — monthly or quarterly check-ins keep you accountable
Calculate Yours Now
Our Net Worth Calculator adds up your assets, subtracts your liabilities, and shows you how you compare to Americans your age. It also includes a "What-If" engine to see how paying off debt or increasing savings changes your percentile ranking.
Frequently Asked Questions
What is the median net worth by age?
Based on Federal Reserve data, median household net worth is about $39,000 under 35, $135,600 for ages 35–44, $247,200 for 45–54, $364,500 for 55–64 and $410,000 for 65–74.
Should I include my home in my net worth?
Yes. Include your home's estimated market value as an asset and your mortgage balance as a liability. Your equity is the difference.
How often should I calculate my net worth?
Quarterly or twice a year is enough for most people to see the trend without getting distracted by short-term market swings.
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Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Figures are estimates based on publicly available data at the time of writing. Consult a qualified professional about your situation.