Author
BetterProduct Editorial Team
Net worth is the single most important number in personal finance. It's the difference between everything you own (assets) and everything you owe (liabilities). Tracking your net worth over time gives you a clear picture of your financial progress — more meaningful than your income or savings rate alone. Many millionaires have modest incomes; many high earners have negative net worth.
BetterProduct Editorial Team
Checked against standard finance formulas and representative planning scenarios.
March 2026
Budgeting, comparisons, and what-if planning.
7 language editions aligned from the same source formulas.
Assets include: cash and savings, investment accounts, retirement accounts (401k, IRA), real estate equity, vehicle value, and other valuable property. Liabilities include: mortgage balance, car loans, student loans, credit card debt, and personal loans. Net Worth = Total Assets − Total Liabilities. Calculate this quarterly to track your progress.
Net worth varies enormously by age and income. A common benchmark: your net worth should be roughly your age multiplied by your annual income divided by 10. At 35 earning $70,000, a target net worth is $245,000. The median US net worth is about $192,000, but the average is much higher due to wealthy outliers. Focus on your own trajectory, not comparisons.
Increase income through career advancement, side income, or skill development. Reduce liabilities by paying down high-interest debt aggressively. Grow assets by investing consistently in diversified index funds. Avoid lifestyle inflation — when income rises, increase savings rate rather than spending. Each of these levers compounds over time.
Counting depreciating assets (cars, electronics) at purchase price overstates your net worth. Ignoring retirement accounts understates it. Not tracking net worth at all means you have no feedback on your financial decisions. Update your net worth calculation at least quarterly, and after any major financial event.