Your net worth is the most complete picture of where you stand financially — far more useful than just knowing your income or your savings balance. Here’s everything you need to know.
What net worth means
Net worth is simply what you own minus what you owe:
Assets − Liabilities = Net Worth
Assets are everything you own that has monetary value: bank accounts, investments, retirement accounts, the value of your home, your car. Liabilities are everything you owe: mortgage balance, student loans, car loan, credit card balances, personal loans.
If your assets total $150,000 and your liabilities total $90,000, your net worth is $60,000.
How to calculate yours right now
List your assets:
- Checking and savings account balances
- Investment and brokerage accounts
- 401k and IRA balances
- Home value (use Zillow estimate)
- Car value (use KBB)
- Any other property or valuables
List your liabilities:
- Mortgage balance
- Student loan balances
- Car loan balance
- Credit card balances
- Personal loans
Subtract total liabilities from total assets. That’s your net worth.
Average net worth by age in the US
- Under 35: $76,000 average / $13,900 median
- 35–44: $436,000 average / $91,300 median
- 45–54: $833,000 average / $168,600 median
- 55–64: $1,176,000 average / $212,800 median
Use the median, not the average — the average is skewed by billionaires. Most people should benchmark against the median.
Why tracking net worth matters
Income tells you how much money is coming in. Net worth tells you if any of it is actually staying. Two people can earn the same salary — one builds wealth, one stays broke — because of what they do with it. Tracking net worth monthly reveals whether your financial decisions are actually moving you forward. It’s the scorecard that income statements don’t show.
How to grow your net worth
There are only two levers: increase assets or decrease liabilities. In practice this means: invest consistently, pay down high-interest debt, increase income, avoid depreciating liabilities like expensive car loans. The goal isn’t a number — it’s a trend. Net worth growing every month, even slowly, means the system is working.