Net worth represents the difference between what you own (assets) and what you owe (liabilities). It's calculated by subtracting your total liabilities from your total assets, including homes, retirement accounts, and investments.

According to the 2022 Survey of Consumer Finances, the average U.S. household net worth was $1.06 million. However, this figure is skewed by wealthy households. The median net worth of $192,700 better represents the typical American household, showing a 37% increase from $141,140 in 2019.

Net worth typically increases with age before declining post-retirement. Here's the breakdown by age group:

Under 35:

• Median: $39,040
• Average: $183,380

35-44:

• Median: $135,300
• Average: $548,070

45-54:

• Median: $246,700
• Average: $971,270

55-64:

• Median: $364,270
• Average: $1,564,070

65-74:

• Median: $410,000
• Average: $1,780,720

75+:

• Median: $334,700
• Average: $1,620,100

While net worth is a useful financial indicator, it's not the complete picture. A high net worth doesn't guarantee financial security, and a low net worth doesn't indicate financial failure. Factors like student loans, medical debt, and market conditions can significantly impact net worth.

To increase your net worth:

1. Tackle high-interest debt first using the debt avalanche method
2. Save consistently and automate your savings
3. Maximize employer 401(k) matching contributions
4. Invest strategically for long-term growth
5. Seek additional income through side hustles or career advancement

Remember that building net worth takes time and patience. Focus on consistent saving and investing while maintaining flexibility to adjust your strategy when needed.

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