How to calculate your actual net worth


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In some ways, net worth and wealth can be tricky terms to define. To some people, the phrases are synonymous. As others acknowledge, the perception of wealth is influenced by a variety of factors, including where you live, career, and age.

Here’s a deep dive into how to calculate individual net worth, and some of the factors that may influence our perception of wealth.

How to Calculate Individual Net Worth

An individual’s net worth is the value of all of their combined assets minus any liabilities (that is, outstanding debts). If your assets are worth more than your liabilities, you have a positive net worth. If you owe more than you own, your net worth is negative.

Assets you may use as part of your net worth calculation can include:

•  Real estate. Your home, second home, rental property, commercial real estate, or other holdings.

•  Cars and other vehicles. Note that automobiles are typically subject to depreciation in value over time.

•  Investments. Stocks, bonds, mutual funds, and retirement accounts.

•  Cash

•  Life insurance. Use the cash value.

•  Household items. Furniture, silverware, etc.

•  Jewelry. Plus precious gems and metals.

Liabilities are debts such as:

•  Balance remaining on your mortgage

•  Student loans

•  Auto loans

•  Credit card debt

Recommended: Does Net Worth Include Home Equity?

What Is the Difference Between Net Worth and Income?

Net worth and income don’t necessarily go hand in hand. Income is the money that is reported on a tax return, while a high net worth results from owning valuable assets. High net worth could be a result of careful saving, inheriting money, or hanging onto highly appreciated assets.

For example, let’s say someone bought a house in a once-undesirable neighborhood decades ago. Today, that neighborhood is super popular and the house is worth much more. Even if they don’t sell, the homeowner has increased their net worth without a boost in income.

On the other hand, a professional with a high salary who carries a lot of debt could have a relatively low net worth, especially if they also maintain a costly lifestyle. That said, income certainly has a big impact on how much wealth a person is able to accumulate.

Income is also one way that researchers sort individuals into economic classes, though the income ranges that delineate class can vary from year to year and by research methodology.

Recommended: What Percentage of Income Should Go to Rent and Utilities?

What Salary Is Considered a Middle Class Income?

Pew Research defines middle-income Americans as those whose annual size-adjusted income is two-thirds to double the median size-adjusted household income. (Size-adjusted household income refers to the number of people within the household.)

A single middle-income individual can earn $30,003 to $90,010, while a family of three earns $51,967 to $155,902. Low-income individuals earn less than two-thirds of the median size-adjusted household income.

Recommended: Should I Sell My House Now or Wait?

What Salary Is Considered an Upper Class Income?

Upper-income individuals earn more than double the median size-adjusted household income. An individual can earn more than $90,010, while a family of three may earn more than $155,902.


Here’s a side-by-side comparison of size-adjusted household income for upper income and middle income Americans.

What Salary Is Considered an Upper Class Income?

Why Wealth Is Relative Person to Person

The definition of “wealthy” differs depending on a person’s background, geography, and age. Consider a law student who earns very little money each year and carries hundreds of thousands in student debt. While their current wealth may be low, their potential future earnings may be quite high, and could catapult them into the wealthiest classes.

Consider, too, that where you live has a big impact on how far your wealth will stretch. A middle-income earner in an expensive city like San Francisco or New York may find it more difficult to make ends meet than someone in a small town in Oklahoma with a lower cost of living.

Ways to Measure Wealth

While wealth and net worth can be considered synonymous in some cases, there are other factors that play into the perception of wealth and a person’s ability to accumulate it, from demographic differences to potential return on investment, which may not have an immediate impact but can increase future wealth.


As mentioned above, high income does not necessarily lead to high net worth — but it can. High earners may use their income to acquire assets that maintain equity, such as a home. These people may also use their earnings to invest within retirement and brokerage accounts.

Personal Savings

Your personal savings may refer to the cash you have on hand in checking and savings accounts, certificates of deposit, and money market accounts. It may also refer to the savings you have invested in brokerage and retirement accounts.

Ideally, these investments will appreciate over time, increasing net worth and providing a future source of income to maintain your standard of living after you stop working.

Investment Rate of Return

An important factor in accumulating wealth is the rate of return (ROR) on your investments. Investment returns are not guaranteed. Stock prices rise and fall according to various trends in the market. Even bonds, which are relatively safe, are subject to default from time to time.

In the past, the stock market tended to rise over the long term. In fact, since 1926, the average annual rate of return for the stock market has been about 10%, surpassing potential returns for other major types of investments, including bonds.

Investors who save more, and hold more of their investment portfolio in stocks, may be better positioned to take advantage of these potential future returns.

Real Estate Assets

One way to think about wealth is as the maintaining of assets. Real estate can be a good place to build equity, and it can appreciate in value. Returns can vary widely depending on what type of real estate you buy — whether a home or commercial property — and where the property is located. Historically, the rate of return on real estate has been close to stock market returns. One study found that the average return lies between 8.6% and 10%.

Age and Family Status

Demographic factors can have an impact on how much money you earn and the wealth you can accumulate. For example, median weekly earnings vary by age and gender.

Perhaps unsurprisingly, men and women ages 16 to 24 have the lowest median weekly earnings, with men earning $694 per week and women earning $628 in the first quarter of 2022, according to Bureau of Labor Statistics data.

Men age 35 and over enjoyed the highest median weekly earnings:

•  35 to 44: $1,257

•  45 to 54: $1,274

•  55 to 64: $1,246

Women earned less overall than men:

•  35 to 44: $1,037

•  45 to 54: $1,063

•  55 to 64: $997

The number of people in a household has a different impact. More people under one roof may require a larger home and more money spent on things like groceries, clothing, and transportation. As a result, a single individual usually requires less wealth to maintain a certain lifestyle than a family of five.

Good Credit Score

While not exactly a measure of wealth, a good credit score is a measure of financial health. It suggests that you have not taken on more debt than you can handle, and that you are able to make your payments on time.

A good credit score can also help you leverage your wealth to achieve financial goals. For example, lenders will look at your credit score when you apply for a loan to determine your credit worthiness. A good score can help you qualify for loans with lower interest rates. Individuals with bad credit, on the other hand, may be seen as a risk, and lenders may charge higher interest rates to compensate.

As a result, a good credit score can help you qualify for loans, such as a mortgage, at affordable rates that can help you build wealth.


Difference Between Material Wealth vs Spiritual Wealth

Material wealth is dependent on the physical and financial assets that you own and the debts you carry. Spiritual wealth, on the other hand, is not based on tangible items. Rather it’s based on things like a sense of well-being and happiness.

Are material wealth and spiritual wealth linked? A little over a decade ago, a study by Daniel Kahneman and Angus Deacon found that a sense of well-being plateaued for individuals earning $75,000 or more a year. More recent research by Matthew A. Killingworth has called these findings into question, suggesting that there is no plateau, and higher incomes may be associated with being more satisfied with life overall and feeling better day to day.

Regardless, Killingsworth notes that the relationship between wealth and well-being is likely overestimated, especially when an individual earns enough to cover their basic needs.

Appreciating What You Have

One of the reasons that higher income doesn’t always translate into greater wealth is a phenomenon known as “lifestyle creep.” This occurs when increasing income leads to an increase in discretionary spending. A certain amount of lifestyle creep can result from trying to “keep up with the Joneses” — a tendency to accumulate material goods to compete with others in one’s perceived social class.

For example, as a person earns more, they might buy a bigger house, a more expensive car, pricey clothes, and start sending their kids to private school. These costly habits can mean that the individual may not be able to save more than when their salary was lower.

Try to avoid lifestyle creep by putting off grand lifestyle changes, like buying a large home, and putting off big purchases until absolutely necessary. Build and stick to a budget that includes wealth-building line items, such as saving in retirement funds. Track your progress with a budgeting app.

Practice appreciating what you already have, and you may find that some of the upgrades you desire are just wants — not necessities.

The Takeaway

Net worth and wealth are inextricably linked. Measuring net worth helps people assess how many assets they currently have at their disposal. Accumulating wealth is about acquiring and maintaining assets that hold their value or increase in value. Doing so often requires careful saving and investing, as well as constant monitoring to ensure you stay on track.


What Salary Is Considered Middle Class Income?

Middle-income Americans have annual incomes that are two-thirds to double the median income, according to Pew Research. For example, a single middle-income individual will earn $30,003 to $90,010, while a family of three will earn $51,967 to $155,902.

What Salary Is Considered Upper-Middle Class Income?

An upper-middle class income is at the high range of middle class income. For a single middle-income individual, that’s an annual income of $90,010.

What Salary Is Considered Lower Class income?

Low-income Americans are anyone earning less than two-thirds of the median household income. That means individuals would earn less than $30,003, while a family of three would have a household income of less than $51,967.


Learn More:


This article originally appeared on and was syndicated by

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The median household net worth in every single state


The average net worth of Americans is $748,800, according to the Federal Reserve’s most recent Survey of Consumer Finances released in September 2020. Meanwhile the median net worth of American households is $121,700, according to the same Federal Reserve Survey.


Net worth measures the difference between assets (what you own) and liabilities (what you owe). Understanding the average American net worth by age can be useful for comparing your own progress in building wealth.


Related: Does Net Worth Include Home Equity


Deposit Photos


The Federal Reserve collects data on net worth in the U.S. using the Survey of Consumer Finances. This survey is conducted every three years, with the most recent undertaking beginning in March 2022. Findings are typically published in the year following the year the survey was completed.


To understand wealth and economic well-being in the U.S., the Federal Reserve looks at several specific factors:

  • Income
  • Homeownership status and home value
  • Debt (including mortgage debt, credit card debt, vehicle loan debt, and student debt)
  • Assets (including investment accounts, deposit accounts held at banks, vehicles, and business equity)

The Federal Reserve uses net worth as a gauge to measure increases or decreases in overall wealth levels. The Survey also takes into account demographic factors, such as age, race, ethnicity, and level of education.


If you’re interested in calculating your net worth, you’d use similar metrics. For example, you could use an online net worth calculator to enter in your total debts and assets to determine your net worth. When calculating net worth home equity may or may not be included, depending on your preferences. It’s possible to get a positive or negative number, depending on how your liabilities compare to your assets.


Recommended: What Credit Score is Needed to Buy a Car


Deposit Photos


Using the Survey of Consumer Finances as a guide, net worth rises over the average American’s lifetime before gradually beginning to decline. Average net worth is lowest for Americans under age 35; between the ages of 35 and 44, the average net worth makes a sizable leap.


There’s another significant bump that happens between the ages of 45 and 54, then the pace at which net worth increases begin to slow. Once Americans turn 75, their average net worth begins to decline.


This pattern makes sense, however, if you consider what the typical person’s working career and retirement might look like. Someone in their 20s likely isn’t making much money yet. They probably don’t own a home and a lot of what they do make might go to repaying student loans, car loans, or credit cards.




Their debts may be mostly paid down or paid off so they can afford to buy a home. By the time they reach their mid-40s, they may be in their peak earning years and their home might have appreciated in value since they purchased it.


Net worth growth begins to gradually slow down once they’re in their 50s and 60s. That could be chalked up to moving some of their portfolio into safer investments or beginning to draw down their savings if they’re retired. Once they reach their 70s, they may be spending more of their assets on health care, including long-term care. Or they might have downsized into a home with a lower value.




The Survey of Consumer Finances provides a snapshot of how the average American net worth has changed over time. From 1998 to 2007, for instance, there’s a steady increase in net worth among American households. But between 2007 and 2013, the average American net worth declined. This makes sense, given that the 2008 financial crisis had an impact on millions of American households. Between 2013 and 2019, net worth rebounded sharply.


This begs the question of how much net worth might change again if the economy were to experience another downturn. If home values were to drop or a bear market caused stock prices to dip, it stands to reason that Americans’ might see their net worth fall. There is a silver lining, as economies do recover over time and the impacts may be less for younger investors. But a drop in net worth might not be as welcome for someone who’s close to retirement.




The Survey of Consumer Finances does not track net worth data by state. But the Census Bureau does compile information on household wealth and debt at the state level.


In terms of what influences the average net worth by state, there are a number of factors that come into play. Some of the things that can influence net worth include:

  • Homeownership rates
  • Property values
  • Employment opportunities
  • Average incomes
  • Access to education and job training

According to the Census Bureau, the median net worth across all states was $118,200 as of 2019. “Median” represents households in the middle of the pack, so to speak, for net worth calculations. Here’s what the median net worth looks like in each state.


Median Net Worth: $85,900



James Deitsch


Median Net Worth: The base was less than 200,000 households or a sample size of less than 50 so the Census Bureau did not record net worth information for this state.





Median Net Worth: $126,100





Median Net Worth: $49,990



danthi66 / iStock


Median Net Worth: $200,300



Art Wager


Median Net Worth: $217,900



Jacob Boomsma / istockphoto


Median Net Worth: $173,500





Median Net Worth: $143,700


Median Net Worth: $24,000


Median Net Worth: $95,770



SeanPavonePhoto/ iStock


Median Net Worth: $110,000





Median Net Worth: $373,200



Art Wager


Median Net Worth: $182,400





Median Net Worth:  $103,500





Median Net Worth: $84,620





Median Net Worth: $152,800





Median Net Worth: $77,010



fotoguy22 / iStock


Median Net Worth: $73,150



Thomas Kelley


Median Net Worth: $84,850


Median Net Worth: $107,400


Median Net Worth: $194,700





Median Net Worth: $251,000





Median Net Worth: $117,600





Median Net Worth: $228,500





Median Net Worth: $40,280





Median Net Worth: $70,220


Median Net Worth: $190,300



David Butler


Median Net Worth: $99,520


Median Net Worth: $93,920





Median Net Worth: $243,600





Median Net Worth: $195,200



Ultima_Gaina / istockphoto


Median Net Worth: $56,450





Median Net Worth: $123,900





Median Net Worth: $108,400


Median Net Worth: $241,000





Median Net Worth: $102,800





Median Net Worth: $80,790


Median Net Worth: $183,200



DC_Colombia / iStock


Median Net Worth: $137,800





Median Net Worth: $83,790


Median Net Worth: $81,150





Median Net Worth: $216,600


Median Net Worth: $70,100





Median Net Worth: $90,390





Median Net Worth: $170,900





Median Net Worth: The base was less than 200,000 households or a sample size of less than 50 so the Census Bureau did not record net worth information for this state.





Median Net Worth: $148,400





Median Net Worth: $170,400





Median Net Worth: $65,920



Kenneth Keifer


Median Net Worth: $110,400





Median Net Worth: $171,600




As discussed, net worth captures the difference between an individual’s assets and their debts. In the U.S. the average net worth varies by location and age.

Tracking net worth is something you may want to do monthly if you’re paying off debt. You can use a money tracker app to figure out how long it will take you to become debt-free based on what you can afford to pay. As your income increases you may be able to pay down debt in larger amounts to increase your net worth faster.

Learn More:

This article originally appeared on and was syndicated by

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