Have you ever wondered how your finances are doing? You’re not alone. We often think about where we stand financially compared to others – although few of us like to admit it. Getting a sense of your financial health can be motivating, especially if it’s not about competition but about setting realistic goals for yourself.
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What exactly is net worth?
Before we dive into the numbers, it’s important to clarify what “net worth” means. Simply put, it’s what you own (assets) minus what you owe (liabilities). Assets include things such as your house, car, investments and savings. Liabilities include things like mortgages, credit card debt, and student loans. Think of net worth as a quick snapshot of your financial health. It’s a bigger picture than just income and shows how much you’ve kept.
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Net worth by income level
According to the latest data from the Federal Reserve, net worth varies across different income groups as follows:
Less than $34,600: Average net worth of $14,000, average $129,700
$34,600-$59,499: Median of $71,000, average $218,700
$59,500-$91,899: median of $159,300, average of $385,400
$91,900-$153,099: Median of $307,200, average $636,800
$153,100-$245,399: Median of $747,000, average $1,264,700
$245,400 and above: median of $2,556,200, average of $6,629,600
According to Pew Research, the wealth of a higher-income household is 33 times greater than that of a lower-income household. These figures show that a higher income often goes hand in hand with a higher net worth, but this is not a guarantee. How you handle money plays a major role in this.
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What you can learn from the data
There are a few notable takeaways:
Median vs. Average: The average American household net worth is $192,700, while the average is around $1.06 million. The gap shows how wealthy individuals distort the overall average.
Age matters: Net worth tends to peak among people between the ages of 65 and 74, with an average of around $1.78 million. Years of saving and investing are piling up.
The impact of education: A college degree matters here – college graduates have more than eleven times the net worth of those without a high school diploma.
