Net worth is a process.
But knowing what that number is plays an important role in tracking financial progress and setting goals. It can also build solid money habits, investment firm Fidelity points out.
“People of all income levels can work toward building positive net worth by saving money, by paying off debt, and potentially by investing,” the company says.
The net worth calculation is simple - subtract debt from assets. Younger people tend to have lower net worths because they haven’t had a chance to build investment accounts or buy a big asset like a home.
Older consumers usually have a bigger gap between assets and debt because they’ve had a lot of time to build wealth and pay down debt.
“Unsurprisingly, net worth tends to rise with age,” Fidelity notes. “People may earn more as they advance in their careers, creating room in their budgets to pay down debt and purchase more assets.”
The median matters
Net worth data by age or generation usually comes as an average or median. A median net worth tells you the 50th percentile - the middle. Median net worth is helpful because it provides a more accurate picture of how well a certain group is doing.
Average net worth figures, on the other hand, can be swayed by a group of ultra-wealthy people or those with negative net worth.
Say you want the average net worth of the following five people:
- Person 1: $20 million
- Person 2: $15 million
- Person 3: $100,000
- Person 4: $50,000
- Person 5: $45,000.
The group average is $7.04 million, but the group median is $100,000. The median more accurately reflects the group’s wealth distribution, while the average is misleading because of Person 1 and 2.
“Medians are less likely to be skewed by an unusually high or unusually low score,” education assessment firm Northwest Evaluation Association.
Knowing net worth
The median net worth of each generation is (according to 2025 data from Fidelity):
- Gen Z/young millennials: $39,000
- Millennials/elder Gen Z: $135,000
- Gen X/elder millennials: $247,200
- Baby boomers/elder Gen X: $364,500
- Elder boomers/Silent Generation: $335,600.
Net worth rises as consumers get older, partly because investment and retirement accounts have a chance to accumulate over time. Net worth falls once consumers are 75 or older because they’re taking money from their retirement to pay for expenses and usually are no longer earning.
Climbing the mountain
Increasing your net worth is a methodical process with small steps that make big impacts over time.
“If your net worth is increasing, that means you are building wealth and setting yourself up for a more secure financial future,” TD Bank noted in a January 2025 article.
According to the Securities and Exchange Commission’s investment experts, the three most important beginner steps are:
- Build an emergency fund: This savings account is solely for surprise expenses. A small emergency fund of a few thousand dollars is a good short-term solution, but experts say having enough money to cover three to six months of expenses is the goal. Having that cushion in place can minimize the impact of financial emergencies on your net worth goals.
- Understand your expenses: A key to financial success is understanding how much you make every month and how much you spend. “Doing so will empower you to build a budget that ensures you have room to save and invest for the future,” the commission said.
- Invest regularly: Even 5 percent or 10 percent of your pay can make a difference. “Investing may have more risk than money kept in the bank, but it gives you a better chance to create wealth over time,” the SEC investment experts say.
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