Net worth is a measure of your financial health, representing what you own minus what you owe. It’s calculated using this simple formula:
Assets - Liabilities = Net Worth

How to Calculate Your Net Worth

• List Your Assets
  Include items of value that you own, such as:
• Cash and liquid assets: Checking, savings, and retirement accounts (e.g., 401(k), IRA).
• Investments: Stocks, bonds, or mutual funds.
• Real estate: Your home’s equity (market value minus mortgage).

• Personal property: Vehicles, valuable collectibles, or jewelry.

• Subtract Your Liabilities
  Account for any money you owe, including:

• Mortgage loans.
• Credit card balances.
• Student loans.
• Personal or auto loans.

Key Points to Remember

• Income is not net worth. High earners can still have a low or negative net worth if debts outweigh assets. Conversely, modest earners can build significant wealth by saving and investing wisely.
• Include retirement accounts. All funds in 401(k)s, IRAs, and other savings plans count as assets.
• Liquidity matters. Liquid assets (easily converted to cash) often have greater immediate value than fixed assets like real estate or cars.

Net Worth Benchmarks by Demographics

By Income Tier (2019 Data)

| Income Tier | Average Net Worth | Change (2016-2019) |
|---------------------------|-----------------------|-------------------------|
| Less than $20,000 | $9,800 | +37% |
| $20,000–$39,900 | $44,000 | +40% |
| $40,000–$59,900 | $92,900 | -1% |
| $60,000–$79,900 | $199,100 | +10% |
| $80,000–$89,900 | $382,300 | -9% |
| $90,000–$100,000 | $1,589,300 | -8% |

By Age Group

| Age Group | Average Net Worth (2019) | Change (2016-2019) |
|---------------------------|-----------------------------|-------------------------|
| Less than 35 | $13,900 | +19% |
| 35–44 | $91,300 | +44% |
| 45–54 | $168,600 | +28% |
| 55–64 | $212,500 | +7% |
| 65–74 | $266,400 | +12% |
| 75 or older | $254,800 | -10% |

By Education Level

| Education Level | Average Net Worth (2019) | Change (2016-2019) |
|---------------------------|-----------------------------|-------------------------|
| No high school diploma | $20,500 | -16% |
| High school diploma | $74,000 | +4% |
| Some college | $88,800 | +26% |
| College degree | $308,200 | -1% |

Tips to Improve Your Net Worth

• Pay Down Debt
  Focus on reducing high-interest liabilities like credit card debt to boost your net worth.

• Increase Savings and Investments
  Regularly contribute to savings accounts and invest in appreciating assets like stocks or real estate.

• Track Progress
  Use online free net worth calculator tools to monitor changes and set financial goals.

To sum up: Your net worth is more than a number—it's a snapshot of your financial stability and progress. Regularly assessing and improving it can help you achieve long-term financial goals.

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