What is the median net worth of households in the United States? Where do you rank?
PLUS: What are 5 proven ways to build wealth?
Median Net Worth of Households in the US
In 2023, the median household net worth in the United States was $192,084. It’s even more useful to see the median broken down by age group (see below). Also, the chart below includes median and various percentiles of all households in the US. Even though >50% of households own stocks, 93% of stocks are owned by the top 10% of households (or those above the 90th percentile). If your plan is to build wealth over your lifetime, then shooting for that as a goal makes sense.
For households that earn >$100,000, achieving the top 10% is possible. In the coming weeks, we’ll highlight various Net Worth Stories (individuals and couples with 10, 15 or even 20 years of net worth history). These stories provide real insight into the various ways others have achieved 90th percentile net worth status. Many attained this level of wealth starting off with a zero or negative net worth at age 22-23 (with student debt).
Reaching $100,000 or $300,000 net worth by age 30 is difficult, but will put you in the 90th percentile and start your own glide path to Financial Independence or maybe even early retirement when you consider the wonders of compounding. However, if you are just starting off, the first $100,000 is definitely the hardest until you reach the crossover point (see article below - it’s just math!).
What are the 5 proven ways to build wealth?
#1) Focus on EARNINGS
Your greatest asset is the present value of your future earnings! Invest time and effort in building skills and increasing your value/contribution. The more value you help create - the higher compensation you can demand!
#2) Start and increase SAVINGS
Earning more doesn't guarantee wealth generation. Wealth (net worth) only increases from your earnings that are not spent! There is some correlation between earnings and net worth but not as much as you think. There are many high income couples that are also high spenders (large house and car payments). Basically, you need to increase your savings percentage as your income grows!
Wealth (net worth) only increases from your earnings that are not spent!
#3) Don’t just save - INVEST!
Your savings rate (annual percentage of income saved) is far more important than what investments you choose. Keep your investment strategy very simple (low cost index funds), be patient, and allow compounding. Savings of any type (emergency, retirement, generic, etc.) creates future optionality in life!
#4) SPEND intentionally
It’s not about deprivation or always being cheap. Align your spending to your individual and family values! Spend time scrutinizing the big purchases (home, car, school, etc.) and don't sweat the <$20 things. Minimize lifestyle upgrades as your income increases.
#5) Minimize DEBT
AVOID all debt except mortgage debt. Pay down any debt as quickly as possible. Debt is a commitment of future earnings which limits optionality! Any interest expense you pay monthly is money that can't be spent on food, clothing, vacations, etc.
Weekly Net Worth Stories
Every week, Net Worth Stories, focuses on a net worth “story” to help you peek inside someone’s personal finances and get the inside view that nobody usually talks about. These stories provide many different strategies on how to increase your wealth over time. Also, we show the misconceptions of visible wealth. People frequently make assumptions about someone’s income and wealth based on:
the home they live in
the car they drive
the clothes they wear
the vacations they take
… and very often these conclusions will be WRONG!
Follow NetWorthStories on X for daily updates —> Net Worth Stories by TenWilsons
Feedback or comments?
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