I hate to break it to you, but you’ll probably never be as rich as Oprah.
And so what? Rather than comparing yourself to the most successful people on the planet, compare yourself instead to your peers. If you feel the need to play the comparison game at all, that is.
Here’s a glimpse into how net worth breaks down by age in the U.S.
A Quick Overview of Net Worth & the Data
Your net worth is the total value of your assets (such as bank accounts, investment accounts, emergency funds, real estate, whole life insurance cash value, retirement savings, and so on), minus the total of all your liabilities (credit card debt, mortgage debt, car loans, personal loans, and so forth). In other words, it represents your total wealth at this moment.
Net worth does not directly reflect your income or budgeting, although of course a higher income makes it easier to build wealth faster.
Most of the data featured below comes from the Federal Reserve’s most recent Survey of Consumer Finances (SCF). It includes data from 2016-2019, and was published in late 2020. The Fed won’t publish the next Survey of Consumer Finances until 2023.
Median vs. Mean Net Worth
If it’s been a while since your middle school math class on averages, recall there are three types: mean, median, and mode. You can ignore mode because it’s irrelevant to net worth.
Mean, sometimes used interchangeably with “average,” is calculated by mathematically averaging all the data points together. The mean of 4, 4, and 5 is 4.33: the sum total (13) divided by the number of data points (3).
Median, in contrast, represents the middle value in the dataset. In the example above, the median is 4.
When comparing net worths, the median value offers the most insight. It helps you compare yourself to the overwhelming majority of other Americans. The median net worth in the U.S. is $121,700 as of the most recent SCF.
The mean is skewed by the wealthiest Americans, most of whom started businesses that grew into successful enterprises (see Tom Corley’s research on self-made millionaires). It makes little sense to compare yourself to the richest of the rich because they represent only a small fraction of the country at large. As of the most recent SCF, the mean net worth is $748,800 — several times higher than the median.
Average Net Worth by Age
As you’d expect, older people tend to have higher net worths than younger adults. They’ve had longer to earn, invest for compounded returns, and accumulate wealth, after all.
In fact, many young adults have a negative net worth due to student loan debt. It takes time to pay off student loans and start saving and investing money.
Here’s how median and mean net worths break down by age, according to the SCF:
|Age||Median Net Worth||Mean Net Worth|
Note that net worths start to shrink again for older adults 70 and over. It makes intuitive sense — retirees spend down their nest egg in retirement.
For another source of household net worth metrics, check out Personal Capital’s figures:
|Age by Decade||Median Net Worth||Mean Net Worth|
Try this fun calculator from Don’t Quit Your Day Job to check your own net worth against your age group, as a percentile.
Average Net Worth by Other Factors
Age isn’t the only factor that correlates strongly with net worth. These actionable behaviors also affect Americans’ average wealth.
Average Net Worth by Education Level
It’s hardly a surprise that Americans with higher education levels boast higher net worths.
Here’s how the numbers break down at different educational levels:
|Education Level||Median Net Worth||Mean Net Worth|
|No high school diploma||$20,500||$137,800|
|High school diploma||$74,000||$305,200|
Americans who don’t graduate high school tend to fall behind financially. There’s little difference in the net worths between high school graduates and Americans with some college, but college graduates see a huge jump in average net worth.
In fact, the median net worth of a college graduate is roughly four times that of a high school graduate, and the mean net worth roughly five times higher. Your parents’ advice to get good grades in school and go to college holds up under the cold light of data.
That said, both the mean and median net worths of college graduates declined from 2016 to 2019. In contrast, the mean and median net worths of high school graduates went up during that period, suggesting a narrowing value gap between high school and college degrees.
Average Net Worth by Homeownership
The single greatest differentiating factor in net worth isn’t education level, race, religion, sex, or any other demographic characteristic. It’s whether you own your home or rent.
Renters averaged a median net worth of $6,300 and a mean net worth of $95,600. Homeowners claimed a median net worth of $255,000, and a mean net worth of $1,102,100.
That puts the median net worth of homeowners over 40 times higher than the median net worth of tenants.
If you’ve sat on the fence, consider improving your credit score and buying a home. Homeowners not only benefit from growing home equity over time, but also tax benefits like the mortgage interest deduction.
Once again, that gap has narrowed slightly from 2016 to 2019, as part of the broader trend of the narrowing wealth gap in the U.S. More on that shortly.
Average Net Worth by Urbanicity
Urban and suburban dwellers have a higher average net worth than rural dwellers.
Those living in a metropolitan statistical area had a median net worth of $126,000 and a mean net worth of $806,400. Meanwhile, those living outside major metro areas had a median net worth of $90,400 and a mean net worth of $324,800.
Interestingly, the median net worth for rural dwellers dropped 3%, even as the mean net worth rose 11%. But among urban and suburban dwellers, median net worth jumped 20%, even as mean net worth ticked up only 1%.
That indicates stronger gains for lower- and middle-class workers in cities, while the wealthy have seen greater gains in rural areas. Or it could mean high net worth Americans are leaving cities in favor of more rural areas.
Narrowing Wealth Gap
Wealth inequality in the U.S. trended lower from 2016 to 2019. The poorest Americans added wealth much faster than richer Americans during that period.
The bottom 25% least wealthy Americans saw their median net worth rise 131% over that time. The next quartile saw their median net worth rise by 36%. Americans in the 50% to 75% quartile saw their median net worth rise 10%.
Americans in the 75% to 90% percentiles saw their wealth rise only 1%. Among the top 10% wealthiest Americans, their median net worth rose a modest 2%.
You can also see it in the change in median net worth versus mean net worth. Median net worth for all Americans grew 18%, while mean net worth grew only 2%, narrowing the gap between the two measures.
Whether the Kardashians own five mansions or six doesn’t impact the average American. The meaningful changes appear in the quality of life for the bottom 90% of Americans, which has risen sharply over the past half century.
Net worth is a useful measure to help you plan for retirement and gauge your progress toward long-term financial goals. But don’t fall into the trap of measuring your self worth by your net worth, and certainly don’t compare your personal finances to the wealthiest people in the world. The most successful entrepreneurs will always push the ceiling higher for “richest person in the world.”
Instead of embittering yourself by fixating on how rich other people appear on social media, focus on improving your own quality of life. Increase your savings rate to build your total assets and passive income streams. Reconsider your ideal life and get intentional to make it happen. Explore the possibility of financial independence and retiring early. Most of all, become debt-free and start investing and compounding your money if you haven’t already.
If the uneven distribution of wealth troubles you, focus on improving the quality of life for the poorest Americans rather than comparing them to the Oprahs and Mark Zuckerbergs of the world. Look for ways to volunteer in low-income communities. Boost education rates through tutoring or volunteer teaching, knowing just how closely education correlates with income and net worth.
Better yet, give money or volunteer abroad. Even lower-income Americans enjoy a far higher quality of life than most workers throughout the world. Having spent many hours working in the poorest communities in Baltimore, and having also visited dozens of poorer countries, I can tell you firsthand that even the poorest areas in the U.S. enjoy far more amenities than those in developing countries.
The next time you feel tempted to compare your net worth to your peers, just remember that you likely rank among the world’s richest 10% — a title you can claim with a net worth of $93,170, per Credit Suisse.