What's Your Net Worth? Here's How to Find Out

How does your net worth compare to your age group?

Every year Forbes calculates the richest people in the world. Forbes uses a wealth-tracking platform to calculate the net worth and ranking of each billionaire in the world, in real time. To make the Forbes 400 list, the 400 richest people in America, you have to be worth at least a staggering $2.7 billion.

Ever wondered what your net worth is? It's important to know your net worth, as it can tell you a lot about your financial health. This information can help you understand where you stand financially, allowing you to make the best decisions for your future. Here is what your net worth is in practical terms, as well as how to calculate it.

What is net worth?

Your net worth is essentially all of your assets minus your liabilities. It's the numerical value of how much wealth you have accumulated over time, minus any debts you have also accumulated. The result will give you an accurate picture of exactly where you stand financially at any given point in time. You can use apps and online tools such as spreadsheets to help calculate it, or do it the old-fashioned way with pen and paper.

How do you calculate it?

Step 1: List all of your assets

This includes anything that you own that has cash value. Common assets include checking and savings accounts, investments such as stocks or bonds, real estate holdings, cars, art collections, and any other items with monetary value.

For most billionaires, this includes stakes in public and private companies, real estate, art, yachts, planes, ranches, vineyards, jewelry, car collections and more. Make sure to take into account any retirement accounts such as 401(k)s or individual retirement accounts (IRAs). Once you have listed all of your assets, it's time to move on to step two.

Step 2: List all of your liabilities

These include any debts that are owed by either yourself or jointly with another person -- such as car and mortgage loans -- as well as credit cards, lines of credit, and other debt. Don't forget about other outstanding bills, such as medical expenses or utility bills. Once you have listed all of these liabilities, add up the total amount owed for each one.

Step 3: Subtract your liabilities from your assets

The final step is to subtract the total amount owed from the total value of your assets; this will give you an estimate of your net worth. Here is what the equation looks like:

Assets − Liabilities = Net Worth

For example after listing adding up your assets (cash on hand + bank accounts + investments + real estate + business interests), you come up with $100,000. You then list and add up your liabilities (credit card debt + car loan + mortgage loan) and come up with $50,000. Your net worth would be:

$100,000 − $50,000 = $50,000

Congratulations, you have a positive net worth! While it isn't enough to make the Forbes 400, having a positive net worth means you are on the right track. Your net worth will typically increase the older you get, as you reach your peak earning potential and pay down your debts.

Average net worth by age

According to the Fed, here is the average median and mean net worth based on age. The mean net worth is the average net worth, which is the net worth of everyone in that group averaged into one number. The median net worth is the value that is right in the middle of all of those numbers. The median net worth is considered to be more accurate, since someone like Elon Musk will throw off the average net worth of his age group.

AGE 35 OR LESS

• Median net worth: $13,900
• Mean net worth: $76,300

AGE 35-44

• Median net worth: $91,300
• Mean net worth: $436,200

AGE 45-54

• Median net worth: $168,600
• Mean net worth: $833,200

AGE 55-64

• Median net worth: $212,500
• Mean net worth: $1,175,900

AGE 65-74

• Median net worth: $266,400
• Mean net worth: $1,217,700

AGE 75 and higher

• Median net worth: $254,800
• Mean net worth: $977,600

How to increase your net worth

Increasing your net worth is a great way to increase financial stability and set aside money for future needs. One of the most effective strategies for wealth accumulation is to focus on both income and expenses. To increase your income, focus on growing your career or job opportunities, as well as any side hustles or investments you can make. On the expense side, find ways to reduce overall spending and prioritize budgeting exercises that allow for maximizing savings. Don't take out more debt than you can afford to pay back.

It's important to remember that while knowing your current financial situation is essential for making the right decisions now and in the future, it's equally important not to get too bogged down in numbers. Everyone's financial situation is unique and there may be times when looking at a bottom line isn't enough -- it's important to always look at the bigger picture. By understanding where you stand financially, it allows you to plan ahead. This could look like budgeting for bills each month, saving for emergencies, or making big purchases like a new car or house down the road.