June 7, 2020

Net Worth Definition

Your net worth is just as important as your income. Every now and then, you should sit down and tally up your personal assets and liabilities, just as you do with your business, to figure out where you stand. Enter actual or estimated market values on each line and total just as you would a balance sheet.

You can grow your net worth through some combination of decreasing liabilities and increasing assets. Why should you care if your net worth grows? One common reason is retirement planning. Simply put, the more assets you have, the more comfortable your retirement will be. You may also need a high personal net worth to buy a business, pursue some types of investments, purchase a second home, pay for a child’s college education, or for other purposes.

Selected Net Worth Brackets and Percentiles for the United States in 2017

There were 126.0 million households in the United States (Federal Reserve estimate) in Full-Year 2016.

For selected percentiles, the following are the net worth brackets and breakpoints:

Net Worth PercentileNet Worth
10.0%-$962.66
20.0%$4,798.06
30.0%$18,753.84
40.0%$49,132.21
50.0%$97,225.55
60.0%$169,550.64
70.0%$279,594.27
80.0%$499,263.50
90.0%$1,182,390.36
95.0%$2,377,985.22
99.0%$10,374,030.10

Dollar estimates are the actual net worth quantile breakpoint – the ‘border’ between two wealth percentiles.

For example, if someone had exactly $279,594.27 in wealth we’d estimate they are the 70th percentile. 

Average, Median, Top 1% and Selected Net Worth Percentiles

There is a very large distribution of net worth between the wealthiest and poorest households. Let’s look at a subset of brackets and summary statistics so you can get a feel for net worth disparity in America.

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