Net Worth: How to Calculate Yours (With Examples)
Net worth is the single number that best captures your financial position: everything you own minus everything you owe. Millionaires track it obsessively — and you should too, whatever your starting point. Banks use it to judge loan applications, financial planners use it to measure progress, and you can use it as your personal scoreboard. Here is the formula, benchmarks by age, and five proven ways to grow yours.
The simple formula — with a worked example
Net worth = Total assets − Total liabilities. That's it.
Assets (what you own): cash, savings, investments, retirement accounts, home equity, car value.
Liabilities (what you owe): mortgage balance, student loans, car loans, credit card debt.
She owes $18,000 student loans + $7,000 credit cards = $25,000 liabilities.
Net worth = $105,000 − $25,000 = $80,000.
Do this once a year — same month, same method — and watch the trend. The trend matters more than any single number.
Net worth benchmarks by age
How do you stack up? These are rough U.S. medians — half of households are above, half below:
| Age | Median net worth (approx.) |
|---|---|
| Under 35 | $14,000 |
| 35–44 | $92,000 |
| 45–54 | $170,000 |
| 55–64 | $250,000 |
| 65+ | $270,000 |
Below median? Don't panic — medians include people who started decades earlier, and they are heavily skewed by home equity built over 30-year mortgages. A 28-year-old renter with $5,000 saved and no debt is in better shape than the numbers suggest.
What matters most is your trajectory: is the number climbing every year? A household adding $10,000 a year to net worth will cross $100,000 in under a decade even starting from zero — and compounding accelerates from there. Track the trend line, not the snapshot.
5 proven ways to grow your net worth
- 1. Kill high-interest debt first. Paying off 22% credit card debt is a guaranteed 22% return — nothing in the market beats that risk-free.
- 2. Automate investing. 401(k) contributions straight from your paycheck; increase 1% every raise.
- 3. Build home equity wisely. Buying well below your means and making extra principal payments compounds.
- 4. Keep lifestyle inflation in check. Every raise split three ways: save more, pay debt, enjoy a little.
- 5. Track it yearly. What gets measured gets managed — a simple spreadsheet beats a vague feeling.
Model your trajectory with our investment growth calculator and budget planner.
What NOT to count
- Don't count future income — only assets you hold today.
- Be honest about home value — use conservative estimates minus selling costs, not Zillow's rosiest number.
- Cars depreciate — count current resale value, not what you paid.
- Exclude personal items — your couch and wardrobe aren't wealth.
Can net worth be negative?
Yes — and it's normal early on. Student loans plus a new mortgage often put twenty-somethings underwater. Negative but shrinking each year means you're winning.
How often should I calculate net worth?
Once a year is plenty for most people; quarterly if you're aggressively paying debt or investing.
Does my salary count toward net worth?
No — salary is income, not wealth. Only what you keep and own counts. A $200k earner who spends $200k has lower net worth than a $70k earner who saves.
What's a good net worth at 30?
There's no magic number, but being debt-free (except maybe a mortgage) with 1x your annual salary saved puts you ahead of most peers.