Financial Education

What is the Average Net Worth of Americans By Age, Education, and Ethnicity?5 min read

Jul 21, 2021 4 min
how to calculate net worth

What is the Average Net Worth of Americans By Age, Education, and Ethnicity?5 min read

Reading Time: 4 minutes
Diving into your net worth is essentially like grading your ability to save money versus spending money.  When you go through the process of tallying up your assets and accounting for liabilities, you can get an overview of where you stand financially and figure out what you are doing well versus what you may need help with. Once you have a clear picture of your net worth you can use the figures given below and see how you stack up against other people your age, as well as see if you are saving money at a solid pace to achieve goals and work towards financial security.

How to Calculate Your Net Worth

In the most simple form of calculating your net worth, you simply take the total value of all of your assets and subtract your debts. 

If your assets are greater than your liabilities, you will have a net worth that’s in the black. (Positive net worth.) 

If you have more liabilities compared to your overall assets, you will find your net worth to be in the red.  (Negative net worth.)

Of course, this can be complicated by additional factors.  Owning assets like copyrights, intellectual property, or patents have a lot of value, but they fundamentally aren’t tangible assets.  I have sold intellectual property in the past and while I’ve had my own idea of what I felt it was worth, the fact remains that it’s worth whatever someone will pay for it. And nowadays, we are even more complicated with the volatility of the economy and of course, the always interesting cryptocurrency market. But for the sake of brevity and to unpack this in an easy manner, let’s use this formula for the examples given today:

Total Assets – Total Liabilities – Intangible Assets = Tangible Net Worth.

Tangible Versus Intangible Assets

It’s also smart to know the difference between net worth and tangible net worth.  Net worth includes all assets you own, while the tangible net worth removes the assets that you can’t physically touch from the equation.  Think of an asset as anything you own that you can easily turn into cash.  This will include property, equity holdings, cryptocurrency, and personal items like boats, vehicles, furniture, and even jewelry.  You can pick up, touch, feel, and hold them.  (Yet, it may be confusing because these days people hardly touch a stock certificate, but since it can easily be turned into cash it counts.)

On the other side of the equation are intangible assets.  Items such as patents, trademarks, intellectual property, copyrights, and more cant be touched but they do have value.  I’ve sold small businesses before and have taken part in discussions about valuing everything from domain names to trademarks.

Process to Determine Your Net Worth

There are multiple steps to this process.  First, you’ll have to decide if you want to do this for yourself, or with your partner.  I’ll just go with the “self net worth” model for simplicity.

  • Get all of your investment statements in order.

  • Calculate the Value of each asset.

    Start with liquid assets, such as cash and savings accounts. These may also include money market accounts, treasury bills, certificates of deposit, or cash you have sitting around in a safe.

  • Determine Your Investments.

    Find the market value of any stock / brokerage accounts, retirement plans, pensions, mutual funds, life insurance, bonds, or annuities.

  • Define Your Real and Personal Property.

    Land, houses, jewelry, vehicles, boats, and collectibles.

  • Total the Above

    This is your total assets.

Average Net Worth

The most recent numbers I could locate, and this is according to Forbes, dates back to 2019.  All American families had an average net worth of $746,820, and the median net worth came in at $121,760, according to the Federal Reserve. There are a plethora of factors that help sculpt someone’s net worth, such as age, level of education, race, ethnicity, and family bloodlines. When you analyze the average net worth and delve into these various factors, you can get a clearer picture of where you stand financially compared to people with similar ages, backgrounds, and means.

Average Net Worth by Age

The data below is provided by the Federal Reserve.
Age Average Median
Younger than 35
$76,340
$14,000
35-44
$437,770
$91,110
45-54
$833,790
$168,800
55-64
$1,176,520
$213,150
65-74
$1,215,920
$266,070
75+
$958,450
$254,900

Average Net Worth by Level of Education

Education Level Average Median
No high school diploma
$137,580
$20,780
High school diploma
$304,590
$73,890
Some college
$374,010
$89,280
College degree
$1,516,910
$308,800

Average Net Worth by Family Structure

Family Structure Average Median
Single with child(ren)
$284,620
$36,710
Single, childless, under age 55
$131,760
$15,700
Single, childless, age 55+
$444,900
$119,500
Couple with child(ren)
$879,210
$166,300
Couple, childless
$1,314,550
$251,700

Average Net Worth by Race or Ethnicity

Race or Ethnicity Average Median
White, non-Hispanic
$980,550
$189,100
Black, non-Hispanic
$142,330
$24,100
Hispanic
$165,540
$36,050
Other
$879,210
$166,300

Ways to Increase Your Net Worth

However the span of your life, you’ll no doubt see your net worth fluctuate due to unforeseen circumstances like economic factors, career changes, and more.  Here are a few tips on helping you save money and grow your net wealth routinely. 

Pay Your Debts Off

Having your liabilities at zero or kept to a minimum is one way to really accumulate wealth.

Watch Your Expenses

Spending less money is saving more money, plain and simple.

Grow Your Income

If you don’t increase your spending habits, you’ll have more money to invest, which in turn will help you increase your net worth.

Invest Heavily in Retirement Contributions

By maximizing retirement contributions, you lower your overall taxable income and also increase your net worth over time by routinely saving.  Here are the current contribution limits for 2021. 

Make Wise Investments

Saving isn’t just keeping money in bank account. Be sure to invest money into opportunities that can grow and provide you with future income. This in turn will build wealth and help you increase your net worth. Diversify your investment portfolio by getting into property, stocks,  physical gold and silver investing, and even cryptocurrency.

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