What is your net worth?

Don’t look to Shawn (not his real name) for any inspiration. Shawn has a BMW 5 series. His wife has an Audi A7. The lawn is perfectly manicured, and he spent over $30,000 on the nightscaping. I know how much he spent because he told me, I didn’t ask. Heck, I don’t even know what nightscaping is! Both his daughters attend the best private schools. Shawn has a large mortgage on his home and has almost more debt than his assets. I know because he told me, I didn’t ask.

For whatever reason, Shawn likes to brag about how well he’s doing and how much he spends on things. He has this insatiable desire to brag about everything.  One day we were speaking about investments, and he happened to mention that he has so far saved $200,000 in his retirement savings account and that he figured his total net worth wasn’t much beyond $250,000.  He mentioned this number to me figuring I would be impressed.

Shawn is 52, and he’s living large. And he has a spending problem.

How do I measure my wealth?

There are multiple ways to measure how wealthy you are: income, net worth, retirement or savings account values, comparison to peers, etc.

By looking at your bank account, you measure how much liquid cash you have. While this is important, it isn’t a true measure of wealth. The same could be said for retirement accounts. It is still incredibly meaningful, but I would not classify it as the most important number to measure wealth by.

Income can be a good measure of success in your chosen profession, but not necessarily for true wealth. Income varies widely by state, profession and age. Even if you have a high income, you could have a “stock versus flow” problem – meaning if you are in Shawn’s position, he probably earns a good income, but is not wealthy because he has many spending leaks. This would be like measuring a company’s financial viability exclusively by its gross revenues. Incidentally, that’s how the Fortune 500 measures companies, and it leads to Wal-Mart being #1 on the list, with stock market darling Apple checking in at #4. But if you look at the companies’ relative market valuations, Apple’s market cap is more than five times that of Wal-Mart’s ($2.02T to $370B), despite Wal-Mart having about double the amount of revenues ($524B to $260B). Obviously, what we choose to measure has a large impact on who we determine is rich, or not.

So now that you know what DOESN’T make you rich, what DOES?

What about net worth? Now we’re getting somewhere. Net worth is a simple measure of Assets minus Liabilities.  By comparing all of an individual’s assets against all liabilities, net worth generates a snapshot of how much leftover money someone would have if they were to pay off all existing debt today.

What Does Net Worth Include?

What are your assets? Do you estimate how much every possession you own would be worth if you sold it? If you owe money on your house or car, are those assets or liabilities?


  • The market value of your investment accounts, including individual stocks, bonds, and mutual funds.
  • The market value of your retirement savings in all retirement accounts. Include ones that charge penalties for early withdrawals like 401ks and IRAs
  • The value of your home, rental property, or vehicles
  • Cash value of your checking accounts and savings accounts.
  • Items of significant value including artwork, antiques, or jewelry.


  • Mortgages on your primary residence and rental properties
  • Car loans and auto loans
  • Student loans
  • Personal loans
  • Credit card debt
  • Back taxes
  • Medical debt
  • Liens or judgments against you

While still not perfect, net worth allows you to look at a snapshot of an individual’s financial life. It still has issues when trying to draw comparisons specifically about future liabilities, liquidity and flexibility.

For example, if I know that I will be sending my daughter to college next year and pay out $100k annually for tuition, my net worth may be about to tank. Also, a person who has $500,000 in cash with no debt is in a very different position to someone who has $2.5M in assets and $2M in liabilities. Although their net worth is equivalent, the composition of an individual’s net worth can vary greatly.

If you don’t know your net worth, I highly recommend using a tool such as Personal Capital (don’t worry, it’s free) to get a snapshot of your net worth.

What Gets Measured Gets Managed

Now that you know what your net worth is, what should it be? The numbers are different for everyone because there are a lot of variables involved, but there are some general yardsticks that you can measure your numbers against.

How do I compare financially to others my age?

The average American family’s net worth is $692,100. I would point out that the average or “mean” is not always the best indicator. For example, Jeff Bezos (valued at $196B, is considered along with the average American. The median net worth of the average U.S. household is $97,300. The median does better at excluding outliers such as Jeff Bezos. How does that number compare to yours? If that sounds depressing, let me break it down for you by age and see how you compare.

What’s a Good Net Worth at 30?

The average net worth for families in the U.S. under the age of 35 was $76,200 while the median net worth was $11,100.

Your goal at this point in your life is to have half of your salary saved by age 30.

You have started or are hopefully near the end of paying down student loan debt. This can be a struggle but now you are in the accumulation phase of your life and looking for a job that will pay a reasonable salary. You are out on your own (and may be struggling to follow a budget). It is extremely important to start investing now.

What’s a Good Net Worth by 40?

The average net worth for families between the ages of 35 and 44 was $288,700, and the median was reported at $59,800.

Your goal in your 30’s is to have twice your yearly salary saved by age 40.

Life is probably pretty busy during this time between kids, a home and maybe even some credit card debt. However, you are probably seeing your income steadily rise.

What Should Your Net Worth Be at 50?

The average net worth for Americans between the ages of 45 and 54 is $727,500, and the median is at $124,200.

By age 50, your net worth should be four times your salary.

At this stage in your career, you are probably earning the most you will ever make. Hopefully you have avoided the mid life crisis and your spending habits are all tuned in.

What Should Your Net Worth Be at 60?

The average net worth for Americans between the ages of 55 and 64 is $1,167,400, and the median is at $187,300.

When you reach 60, your net worth should be six times your yearly salary.

At this point in time, hopefully your knees are still in good shape and you are ready for the future! As you near retirement age, you will want to really be thinking about what you want your retirement to look like, not just in saving for retirement, but have answers for questions like: Where will you live? Are you going to downsize to cut down on expenses? Will you continue to work? Is traveling in your future? What does social security and Medicare look like? What types of insurances will you need? Etc.

Net Worth by Retirement

The average net worth between the age range of 65 and 74 is $1,066,000. However, the median net worth is $224,000.

When you are ready to retire, you should have ten times your final salary saved.

Now kick back, and relax!

What is considered rich?

According to respondents of a 2019 Modern Wealth Survey from Charles Schwab, once you have $2.3 million in personal net worth, you can call yourself wealthy. On the other hand, people responding to a 2019 survey from the market research website YouGov said you need to earn just $100,000 a year to be rich.

How do I get rich?

Don’t feel bad if your net worth is not where it should be. The best time to start changing is now! It is never too late to get your financial house in order. At Molen & Associates, we offer Family Finance appointments to dive into your personal finances and help develop strategies to get more out of your paychecks and help you hit your goals.

If you think you are above average and want to see how you stack up against the 1%, read more here. Don’t forget, a good tax strategy while growing your income and into retirement is crucial! Give us a call at 281-440-6279 to learn more.

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“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

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