This Is the Average 40-Something's Net Worth. How Do You Compare?

Once you reach your 40s, you may have more wealth to your name.

Your net worth is something you may not fixate on so much during the first half of your career. At that point, you may be more inclined to focus on things like paying off your credit cards and saving up money to buy a home.

But once you reach your 40s, the concept of net worth may become more relevant to you. And you may be curious as to how your net worth compares to that of your contemporaries.

What does net worth look like for 40-somethings?

If you're not familiar with the concept of net worth, it's basically your assets minus your debts. Let's say you own a home worth $500,000 and have $100,000 in savings. But let's also assume you owe $300,000 on your home. That would leave you with a $300,000 net worth.

Personal Capital surveyed consumers to see how their net worth breaks down by age, and it found that among 40-somethings, the average net worth was $756,000. However, when we look at median net worth for that same age group, that number falls to $170,767.

What this tells us is that median net worth is a far more representative figure for 40-somethings. When you have an average that's way higher than a median, it's generally because a few higher figures drove the average up. 

So in this case, perhaps some of the people surveyed by Personal Capital in their 40s happen to have a net worth of $2 million or $3 million. That's apt to drive the average upward, which is why you're better off relying on the median as a measure of how 40-somethings are doing.

Are you pleased with your net worth?

Maybe you're happy with your net worth but want to see it keep growing. Or maybe you now realize that your net worth lags behind the median net worth for 40-somethings, and you want to do better.

The good news is that if you're in your 40s, it means you still have many more working years to earn money and build wealth. But a few key decisions along the way could lead you to a higher net worth. Those include:

• Boosting your job skills to land promotions and higher earnings to pad your savings with
• Investing money you aren't using or don't need in the near term and holding your investments for many years
• Taking advantage of accounts like IRAs and 401(k)s, which offer tax breaks for savers
• Avoiding unhealthy debt, which can monopolize your income, cost you money, and make it difficult to build more savings

Ultimately, net worth is something that tends to grow with age. But there are definitely ways you can be proactive in boosting yours. 

In fact, it wouldn't hurt to set a goal for yourself so you have something you can work toward. Just make sure your goal is realistic, though. 

If you have a current net worth of $150,000 and you're 42 years old, doubling your net worth by age 45 may be a challenge. But do you have a better chance of doubling your net worth by age 50? Absolutely -- especially if you stick to the advice above.