Net worth = total assets − total liabilities. It is the best single-number measure of financial progress because it captures everything — your savings, investments, debts, and equity — in one snapshot. Income matters, but two people earning the same salary can have wildly different net worths depending on spending and saving behavior.
What Counts as an Asset?
- •Cash and checking/savings account balances
- •Investment accounts (brokerage, IRA, Roth IRA)
- •401(k), 403(b), pension, and other retirement accounts
- •Home equity (current market value minus mortgage balance)
- •Vehicle value (use current market value, not purchase price)
- •Business ownership equity
- •Other real estate equity
- •HSA and 529 account balances
What Counts as a Liability?
- •Mortgage balance (not the payment — the total outstanding balance)
- •Auto loan balances
- •Student loan balances
- •Credit card balances
- •Personal loan balances
- •HELOC balance
- •Any other money you owe
What NOT to Include in Net Worth
- •Social Security future benefits — too uncertain and dependent on future policy
- •Pension value — it is promised future income, not an asset you own today
- •Future salary or expected inheritance — not owned yet
- •Everyday personal property: furniture, clothing, jewelry (unless luxury items with verifiable market value)
- •A vehicle worth less than its loan — the negative equity is already captured in your liability column
Average Net Worth by Age: The Quick Benchmarks
According to the Federal Reserve's Survey of Consumer Finances, median net worth under 35 is $39,000; ages 35–44 is $135,600; ages 45–54 is $247,200. For the full breakdown with context on why median vs. mean matters, see: Average Net Worth by Age — Real Benchmarks.
A Better Benchmark: Salary Multiples
Age-based averages can mislead because a teacher and a software engineer have different accumulation potential. Fidelity's income-multiple benchmarks are more actionable: 1× your annual salary by 30; 2× by 35; 3× by 40; 6× by 50; 8× by 60; 10× by retirement. These apply to investable net worth (financial assets minus all debts), not total net worth including home equity.
How to Use Your Net Worth Number
- 1.Track it quarterly — not to obsess over fluctuations, but to confirm the trend is up.
- 2.Identify your biggest liabilities. High-interest debt destroys net worth every month — prioritize eliminating it.
- 3.Separate liquid from illiquid. A $400k home and $5k in savings is not the same as $405k in the bank.
- 4.Track investable net worth separately from total net worth — this is what actually funds retirement.
- 5.Use it to set goals. "I want a $500,000 net worth by age 45" is concrete and trackable.