Net Worth — The Single Most Important Financial Number
Net worth = Total Assets - Total Liabilities. It is the true measure of financial health, not income.
How to Calculate
Assets (what you own): Cash and savings, investment accounts, retirement accounts, home value, car value, other property.
Liabilities (what you owe): Mortgage balance, car loans, student loans, credit card debt, personal loans.
Net Worth Benchmarks by Age
| Age | Median | Above Average | Excellent |
|---|---|---|---|
| 25 | $10,000 | $50,000 | $100,000 |
| 30 | $40,000 | $150,000 | $300,000 |
| 35 | $75,000 | $250,000 | $500,000 |
| 40 | $125,000 | $400,000 | $800,000 |
| 50 | $250,000 | $800,000 | $1,500,000 |
Track your net worth monthly. It is the scorecard of your financial life. Even if it is negative today, knowing the number is the first step to improving it.