Those opportunities can also lead to accumulating debt, or liabilities, such as student loans, car loans, credit cards, and mortgages. However, not all debt is bad debt. In fact, borrowing strategically and having a good mix of debt and revolving credit that you repay on time each month helps build your credit history, which can lead to a higher credit score.
Some of the factors that impact net worth are those you can control, like employment, income, and living costs. Income for the same job and property values vary drastically depending on the city or state where you live. While other factors, like financial inheritances, are the luck of the draw.
How does your net worth compare to others in your age group?
Here’s a breakdown of both median and average American net worth by age, according to the 2022 Survey of Consumer Finances from the Federal Reserve.
The average is the number you get by dividing the sum of a set of values by the number of values in the set, and the median is the middle point between a set of data. Economists say that looking at the median is a better indicator of where most Americans fall on the net worth spectrum.
| Age | Median Net Worth | Average Net Worth |
| Less that 35 | $39,000 | $183,500 |
| 35-44 | $135,600 | $549,600 |
| 45-54 | $247,200 | $975,800 |
| 55-64 | $364,500 | $1,566,900 |
| 65-74 | $409,900 | $1,794,600 |
| 75 or more | $335,600 | $1,624,100 |
How to build your net worth at any age
There are two ways you can build your net worth:
1) by increasing your income and how much you save and invest
2) by reducing your debt
Both factors work hand-in-hand since you can’t pay off debt without an income. As this chart shows, a higher education, which often incurs student loan debt, results in a higher net worth.
How education can impact your net worth
The average American’s net worth increases with age, but how does education factor in? Despite the high cost of college tuition, getting a college degree often directly influences an individual’s earning potential and has an impact on their net worth. In general, college graduates tend to have a higher average net worth than those with a high school diploma or no high school diploma.
| Education Level | Median Net Worth |
| No high school diploma | $38,100 |
| High school diploma | $106,800 |
| Some college | $136,500 | College degree | $464,600 |
How homeownership impacts your net worth
| Housing Status | Median Net Worth |
| Owner | $396,200 |
| Renter | $10,400 |
If your income is limiting your ability to reduce your liabilities, there are ways to increase your income.
- Is it possible to negotiate for a raise?
- Turn a hobby into a side business?
- Invest some of your savings in stocks?
Strategically reducing your liabilities
If you’ve been making minimum payments on your debts, analyze your cash flow to see if you can afford to pay it down faster. Calculate how much you’d save over time in interest and how much your net worth would grow if you did.
Be aggressive with repaying your high-interest debt when you’re not earning any equity or profit in return. For example, if you’re paying 17.99% interest on your credit card with an $8,000 balance, but you’ve got $15,000 in a savings account that is only paying 0.8% interest, you’d be better off paying off your credit card balance. However, if you have a mortgage on your home, that’s appreciating in value.
Start thinking long term
It can take time to build your net worth. With some strategic planning, you can make incremental progress, set yourself up for a comfortable retirement, and maybe leave enough to help the next generation increase their net worth.
