Your net worth is a good measure of your overall financial stability, since it takes into account all your assets and liabilities. It’s not uncommon to want to measure our financial situation with others who are in a similar age range.

So how is wealth shaping up across the county? The Federal Reserve tracks the net worth of American households every few years. Below is a breakdown from their latest data:

Net Worth of Americans

How To Increase Your Net Worth
After looking at the chart above you may be comparing yourself to your peers and wondering how to build your net worth. Here are a few basic steps:

Pay Yourself First
You pay yourself first by putting money into investments and savings before any other purchases.

Thinking of personal savings as your first bill each month can help you build significant wealth over time. The best way to do this is to set automatic contributions to your investments and savings.

Avoid High Interest Debt
From credit cards to student loans, it can be easy to have your finances suffer by making minimum payments each month and losing money to interest year after year. Paying off high interest debt should be your number one priority.

Spend Less Than You Make
One of the best ways to avoid debt is by spending less than you make. This rule is simple to understand but hard to follow.

It’s important to get the big purchases right. Overspending on your home or car can make this much more difficult. I recommend following the 28/36 rule.

Increase Earnings
While cutting spending is good, finding ways to increase your income is even better.

Spending has lower limits (i.e. you have to eat), but income has no upper limits. Focus on finding ways to grow your income. This could be from a new job, salary negotiations, rental properties, or others.

Invest Wisely
A common trait among wealthy individuals is buying assets with the potential to increase in value. In fact, 10% of the wealthiest Americans own 89% of all U.S. stocks.

Keep it simple and buy investments that you understand.

Start Early
The best time to get invested was yesterday, the next best time is today. The earlier you start the longer you have to benefit from compound interest.

Inherit Money
It is estimated that $61 trillion in wealth will be transferred to the heirs of older generations between 2018 and 2042. Although inheritance is out of your control, you can still plan ahead.

Discussing estate planning amongst family members can be uncomfortable. But having these discussions can help save you from headaches down the line.

Bottom Line
There are numerous ways to improve your net worth. Working with a financial planner may help you better understand your finances and hold you accountable to reach your long-term goals.

Disclaimer and Sources:

Average Net Worth Chart from ChicagoAdvisor
Data source is the Federal Reserve. The next survey results will be released September 2023.
$61 trillion to be transferred to younger generations from Wall Street Journal
The Wealthiest 10% of Americans Own 89% of stocks from CNBC
28/36 Rule from Investopedia

Please consult your financial advisor regarding your specific situation. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. All investing involves risk including loss of principal. No strategy ensures success or protects against loss. This information is not intended to be a substitute for specific individualized tax advice.