- ✦Net worth is the single most important number in personal finance. Here's how to calculate it correctly, what counts as an asset vs liability, and how to benchmark where you should be by age.
- ✦What is net worth? — Net worth is the total value of everything you own (assets) minus everything you owe (liabilities).
- ✦What is a good net worth by age? — According to Federal Reserve data, median net worth by age in 2024: under 35: $39,000; 35-44: $135,000; 45-54: $247,000; 55-64: $365,000; 65-74: $410,000.
The Formula
Net Worth = Total Assets − Total Liabilities
That's it. The complexity is in knowing what to include.
What Counts as an Asset
Assets are everything you own that has monetary value:
Liquid assets (cash and near-cash):
- Checking and savings accounts
- Money market accounts
- CDs
- Cash value in I-Bonds
Investment assets:
- Brokerage accounts (stocks, ETFs, mutual funds)
- 401(k), 403(b), 457 balances
- IRA and Roth IRA balances
- HSA balance
- Crypto holdings (at current market value)
Real property:
- Primary home (current market value)
- Investment properties (current market value)
- Rental property equity
Physical assets (optional — include if valuable):
- Vehicles (Kelley Blue Book value)
- Collectibles, art, jewelry (only if you'd actually sell them)
- Business ownership stake
What to exclude: The value of your human capital (future income) is real but not countable. Don't include it.
What Counts as a Liability
Liabilities are everything you owe:
- Mortgage balance(s)
- Home equity loan / HELOC balance
- Auto loan balances
- Student loan balances
- Credit card balances (total outstanding, not credit limit)
- Personal loan balances
- Medical debt
- Any other debt you're legally obligated to repay
A Net Worth Calculation Example
| Asset | Value |
|---|---|
| Checking account | $8,500 |
| HYSA | $22,000 |
| 401(k) | $145,000 |
| Roth IRA | $38,000 |
| Brokerage account | $47,000 |
| Home value | $420,000 |
| Car (KBB value) | $18,000 |
| Total Assets | $698,500 |
| Liability | Balance |
|---|---|
| Mortgage | $310,000 |
| Auto loan | $12,500 |
| Student loans | $8,200 |
| Credit card | $2,400 |
| Total Liabilities | $333,100 |
Net Worth: $698,500 − $333,100 = $365,400
Use our Net Worth Calculator to calculate yours in under 5 minutes.
Net Worth Benchmarks by Age (2026)
| Age | Median Net Worth | "On Track" Target (1× → 7× salary) |
|---|---|---|
| 25 | $14,000 | 0.25× annual salary |
| 30 | $39,000 | 0.5× annual salary |
| 35 | $91,000 | 1× annual salary |
| 40 | $135,000 | 2× annual salary |
| 45 | $200,000 | 3× annual salary |
| 50 | $247,000 | 4× annual salary |
| 55 | $312,000 | 5× annual salary |
| 60 | $365,000 | 6× annual salary |
| 65 | $410,000 | 7× annual salary |
Median data from Federal Reserve Survey of Consumer Finances 2024. "On track" targets from Fidelity's retirement savings benchmarks.
Don't panic if you're behind median. Median includes people who inherited wealth, had large windfalls, or started earning early. What matters is your trajectory — net worth growing year over year is the signal that counts.
How to Increase Net Worth
There are only three levers:
1. Grow assets faster:
- Maximize tax-advantaged accounts (401k match first, then IRA, then HSA)
- Invest consistently — time in market beats timing the market
- Earn more income and invest the difference
2. Reduce liabilities faster:
- Pay off high-interest debt aggressively (credit cards, personal loans)
- Make extra mortgage payments if your rate is above 7%
- Avoid taking on new debt for depreciating assets
3. Protect what you have:
- Emergency fund prevents forced liquidation of investments during downturns
- Term life insurance protects your family's financial position
- Adequate insurance prevents catastrophic liabilities
How Often to Calculate Net Worth
Track it quarterly. Set a calendar reminder on the first of January, April, July, and October. Pull your balances, run the numbers in 10 minutes, and compare to last quarter.
The trend matters more than the snapshot. A net worth that grows 8-12% annually compounds dramatically over 20 years.
Related Tools
- Net Worth Calculator — Calculate yours right now
- FIRE Number Calculator — How much net worth do you need to retire?
- Retirement Number Calculator — What your nest egg needs to be
- Compound Interest Calculator — See how your net worth grows over time
Net worth is the single most important number in personal finance. Here's how to calculate it correctly, what counts as an asset vs liability, and how to benchmark where you should be by age.
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