# Are You Wealthy? U.S. Net Worth by Age and Income

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Net worth is the total value of all your assets minus all your debts. It is the one number that represents a singular measure of your financial success. And what net worth you need to have to be considered wealthy? To many people, wealthy means having an abundance of material possessions. For me, I would consider myself wealthy when income from my assets can cover all my family living expenses and a few luxuries. There is no magic number. But when both my wife and I can choose to live without working, that’s when we are wealthy.

## How to Calculate Your Net Worth

At any given moment, I know my net worth. All I have to do is log into my Personal Capital account and see the number. Personal Capital works by linking your investment accounts, bank accounts, credit cards, and loans and aggregating all the data into one place. You can also list any other assets and liabilities that cannot be linked. Once this is all set up, the software will show you your net worth at any given moment.

If you’d like to calculate your net worth manually, here is How to Calculate Your Net Worth.

## How Do You Compare to Others

### The Millionaire Next Door Method

From The Millionaire Next Door by Thomas Stanley and William Danko, your net worth should be:

Net Worth (or Assets – Liabilities) = Your Age x Your Pre-Tax Income ÷ 10

If you have twice that, you are indeed on your way to becoming wealthy! Stanley and Danko call them Prodigious Accumulator of Wealth or PAW

I did a quick calculation, and our net worth should be about \$900,000 according to the formula. Right now, we have well above that amount, so we are a pair of PAW! However, this calculation only works well if your income has been steady. For that reason, it’s probably better if you substitute “Your Pre-Tax Income” with your Average Pre-Tax Income for the Past 5 Years.

### CNN Net Worth Calculator

The CNN Net Worth Calculator is a calculator that lets you enter your age and income. It returns the median net worth for people in your age group and salary range. I punched in my numbers, and I am glad to say that I am doing quite well compared to people at my age and income (according to the calculator anyway). Here is how I stacked up against other 45 years old in the United States.

Actually, it’s kind of scary that the median net worth for the 45-54 age range is only \$98,350! Overall, the median net worth based on age and income both seem low. Is the calculator accurate, or is the reality of our finances so grim that this is a true reflection? In any case, I encourage you to check it out — punch in your age and income to see how you compare.

### DQYDJ Net Worth Calculator

The DQYDJ Net Worth by Age for the United States Calculator is a different take on looking at your net worth. Here your current net worth (which you can get by following the step above), your age group, and whether or not you’re counting the equity your primary residence in your net worth. The calculator returns the Wealth Percentile ranking, which shows you how you compare against others in the same age group in the United States.

### Net Worth of the Top 1%

According to DQYDJ, here is how you stack up against the top one percent by household net worth:

• Top 1.0% = \$10,374,030

and top top 0.1% is 43 time higher at \$43,090,281, versus the top 10% at \$1,182,390.

## Bottom Line

I think tracking your net worth is a valuable exercise that everyone should do — like the great Peter Drucker said: “If you can’t measure it, you can’t improve it.” And there is no reason not to do it because a tool like Personal Capital makes it super easy to do. As far as how you compare against others, I think it is less important. However, if you’re behind the curve, I think it is a good motivator for you to get started with a plan to improve your personal finance.

Before I end this post, I want to leave with you a quote from The Millionaire Next Door:

Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high.

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Minimum Wage
16 years ago

I’ve used that calculator and got ridiculous results. Based on my age, my net worth should be a really big number…based on my income, my net worth should be \$1,100.

Which extreme should I believe?

Pinyo
16 years ago

That’s probably because you are older. May be a better test would be:

Net Worth = Age * Income / 10

If you have that much saved, you are doing okay.

16 years ago

Whatever ‘number’ the Net Worth Calculator pops out, it won’t be the ‘right number’. To understand how much MONEY you need to support your life, you first need to know how much LIFE you need to support.

PTC
16 years ago

Those numbers just seem extremely off from my point of view. I live in NYC and am 32. Most people I know are between 27-35 and pretty much everyone makes six-figures (that is common in NYC even for entry level jobs). My net worth is about \$880k largely because I lived rent free for a few years with my parents in Long Island. My net worth is all in cash/investments – no house and the only “illiquid” thing is my 401k which relative to my net worth is fairly small at only around \$110k. I am renting now simply because… Read more »

PTC
16 years ago

OK, perhaps saying six-figures for entry level jobs is common was not accurate – however I will argue that it is not uncommon. And I should also mention that when I say entry-level job I mean within your first two years. For instance a typical first-year analyst on wall street may or may not make six-figures their first year (if they don’t it will be close). But by their second year it is pretty much guaranteed. As of last year I think the average for 2nd year guys was over \$150k. Those are 23 year olds. It is similar for… Read more »

Daniel
14 years ago

PTC, you live in a (albeit rather nice) bubble. Like many big world cities, NYC has a stark contrast of rich and poor. If you work in finance, in Wall Street, then 6-figure incomes are bound to be very common. How nice for you. But in other occupations, the entry incomes are nowhere even remotely near that level. I live near London, the financial capital of the world, and city bankers earn 6-figure incomes at entry level with no sweat. And this is in pounds, not dollars don’t forget. But then you also have a significant number of Londoners on… Read more »

## Are You Wealthy? U.S. Net Worth by Age and Income

by Pinyo Bhulipongsanon time to read: 3 min
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