Net Worth Defined and Calculated: What's My Net Worth?

How to Calculate Your Net Worth

By Kristi Waterworth – Updated May 1, 2025 at 10:49 AM

Key Points

Net worth is calculated by subtracting liabilities from assets; it represents financial stability.
Investing regularly in the stock market can boost your net worth over time due to compounding.
Median net worth values offer a more accurate representation of wealth distribution than averages.

If you're trying to get a sense of where you stand financially, your net worth is a great place to start. While not a be-all, end-all indicator, your net worth can have some value in measuring your financial health. Needless to say, you're more than your net worth, but some people find it helpful to dig a bit deeper into their numbers to see how they can improve.

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A person using a calculator with financial charts on the desk. — Image source: Getty Images.

Here, we'll review what net worth is, how to calculate it, and see how your net worth compares to people in similar circumstances. Then, we'll work through some frequently asked questions surrounding the subject.

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Net worth is the difference between what you own (cash, stock, and other items) and what you owe (your debts and other liabilities). Another way to describe net worth is the excess of your assets over your liabilities. Your net worth can be positive or negative.

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Asset

An asset is a resource used to hold or create economic value.

An asset is something from which you gain some future economic benefit. In the case of cash in a savings or checking account, you receive both interest and the option to spend. With stock, you own the right to your share of the company's future dividends.

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A liability, on the other hand, is the opposite of an asset. It represents a future sacrifice of economic benefit. Debts like credit card balances, car loans, mortgages, and student loans count as liabilities.

The more your assets exceed your liabilities, the greater your net worth. However, if your liabilities greatly exceed your assets, you're likely in some form of financial trouble.

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Examples of common assets and liabilities.
Common Assets	Common Liabilities
Estimated home value	Home mortgage principal
Investment portfolio (stocks and bonds)	Student loan debt
Savings accounts or CDs	Credit card debt
Home contents	Personal loan balances
Jewelry	Tax debt
Owned vehicles	Car loans

These are just some of the many assets and liabilities that exist. Depending on the totality of your life and its related complexity, you may have more or fewer assets and liabilities than someone in a similar scenario. Read on to see how you might compare to others in the same age range.

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Net worth by age.
Age Range	Average Net Worth	Median Net Worth
Under 35	$183,380	$39,040
35-44	$548,070	$136,300
45-54	$971,270	$246,700
55-64	$1,564,070	$364,270
65-74	$1,780,720	$410,000
75+	$1,620,100	$334,700

On the subject of net worth by age, there's more to the table than just the numbers. First, it's good to know that average net worth tends to skew higher because of the tremendous wealth concentration in the top few percent of households. This boosts the entire average and may cause the average net worth value to look quite a bit higher than the true average.

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Net worth by race.
Race	Average Net Worth	Median Net Worth
Caucasian (white)	$1,361,810	$284,310
Black	$211,600	$44,100
Hispanic/Latino	$227,540	$62,120
Other	$844,130	$132,200

As you'll note, the disparity in average net worth and median net worth across ethnicities is vast. This is due to the ongoing effects of generational poverty and systemic issues that have hindered certain groups throughout our nation's history.

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Net worth by education level.
Education Level	Average Net Worth	Median Net Worth
Less than a high school diploma	$175,630	$38,050
High school diploma	$413,280	$107,000
Some college	$540,870	$137,040
College degree	$1,992,940	$464,400

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Is Common Stock an Asset or a Liability?

Assets or liabilities? We explain accounting for common stock.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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