Am I rich? You can find out using my net worth percentile calculator to see if you have above average net worth by age.
I’ll also show you the data on what is the average American net worth and why you should only look at average net worth by age.
We’ll also look at whether millionaires are still considered rich today and how much wealth you need to be in the top 1 percent.
Net Worth Percentile Calculator
Here’s the net worth percentile calculator, please select:
- The age of the head of your household
- The total net worth of your household
- Whether you included primary residence in your net worth number
What Is Net Worth?
Net worth is THE number that says how rich you are. Net worth is the amount of wealth you have.
We look at net worth at the household level. Why? Because couples think about wealth together, and if you’re single, you are considered a household all by yourself.
Plus, government agencies that share this data, from the Federal Reserve to the U.S. Census, calculate net worth at the household level.
Net worth equals total assets minus total liabilities.
Your net worth is all the things you own (the assets) minus all the things you owe (liabilities).
In the long run, if we want to increase net worth, we need to grow our assets and decrease our liabilities.
To get rich, put your money in assets that increase in value over time. Vanguard index funds are great assets.
Here’s a list of my favorite vanguard index funds.
How to Calculate Your Net Worth
If you haven’t already done so, calculate your household’s net worth.
For married people, your household’s net worth should be the assets and liabilities of you and your spouse combined.
The question “am I rich?”, though, is not just a question about your wealth. It’s a question of your wealth in relation to other people’s wealth.
Once you have your net worth, let’s go figure out what net worth you need to be considered rich.
What is the Average Net Worth?
Why “Average” Is Skewed to the Rich
The average net worth is a bad number to use to answer “how rich am I”.
Why? Because the average net worth is skewed by the very rich.
For example, the average net worth between Jeff Bezos and my family is about 70 billion dollars. Because Jeff Bezos’s net worth is 140 billion dollars and mine, in comparison, really doesn’t matter.
The average net worth between Jeff Bezos and us tells us nothing about us.
In case you wonder, the average American net worth is about $650,000. This seems pretty high but it’s very skewed by the top 1 percent.
Instead of looking at the average net worth by age, we should really look at the median net worth by age.
Median American Net Worth
The median, unlike average, is literally the middle number. If I have 10 people’s net worth, I can rank them from smallest to largest, and the middle person’s net worth IS the median net worth.
So the middle American’s net worth, or the median net worth, is a very good measurement of how rich an “average” American is.
The median American net worth is about $97,000. This is much lower than the average American net worth of $650,000, right?
But $97,000 is also a much more accurate look at how rich an average American is. All of this is to say – the average American is not that rich.
Average Net Worth by Age
It’s actually also a bit incorrect to look at the overall median net worth from people of all age groups.
Why? Because you really can’t compare the net worth of a 60-year-old to that of an 18-year-old.
The 60-year-old spent decades saving up, he is in a different spot compared to the 18-year-old who is just getting started.
So when we talk about the average American net worth, we have to look at the average net worth by age, or better, the median net worth by age.
What is the Average Net Worth by Age?
Based on my analysis, the median net worth by age in the United States is:
The table above shows us that the average net worth by age increases as you get older.
Not only that, the “vs. previous decade” column shows that the wealth growth is quite dramatic in your earlier years but then sort of slows after people turn 50 years old.
In fact, the average net worth of a household between 20-30 years old is only around $5,000, or one-tenth of the average net worth of a household between 30-40 years old.
This implies that an average American really grew her net worth in her 30s, perhaps after she’s gotten a stable job and right when her career is in its prime.
This is especially true for women whose earning potential dramatically decreases after having kids (I know, I’ve been there and done it).
If you are a woman wondering how to achieve FIRE, make sure to read my guide Financial Independence for the Ambitious Woman.
Prime Time to Build Wealth
Average American Net Worth
The curves in the chart below are real data on the (median) net worth of American households, for each age group.
I analyzed and grouped the net worth data by age and mapped it to a trendline to show you the average American net worth at every age.
Find your age, look at the chart – are you above or below the trend line for average net worth?
What if your net worth is a lot lower or higher than the average net worth for your age? Let’s figure out your exact net worth percentile, then.
Net Worth Percentile
Ever wonder, “what percent am I, and what percentile is my net worth?” My analysis reveals the following:
So to be in the top 5 percent in net worth, you need a net worth of nearly $2.4 million dollars.
The top 1 percenter has a net worth of over ten million dollars.
But net worth percentiles, like the top 1 percent or top 10 percent, are useful to know, but really, you want to find out what the top net worth percentiles are for people in your age group.
Net Worth Percentile by Age
Here’s my analysis for net worth percentile by age:
If you’re 30 – 40 years old, then you’re in the top 5 percent net worth if you have a million dollars.
But if you’re 20 – 30 years old, a million puts you in the top 1 percent, easily.
But for those 60 years old and up, the top 1 percent requires that you have at least 14 million dollars.
Start saving early
If you are still a little bit confused on why you should start saving early based on this data, consider the chart below.
The x-axis shows net worth percentile (top 1 percent, etc.) and the y-axis shows the net worth – in logarithmic form.
Each line is an age group:
This chart might take you a while. I’ll summarize:
- Most people accumulate wealth between the ages of 20 to 50, then people’s net worth growth slows after 50.
- There is a huge gap between the top 1 percent and everyone else. The y-axis is already on a logarithmic scale but the lines still flared up toward higher percentages.
- Wealth inequality starts young and early. The top 5 percent net worth of someone below 30 is higher than the median net worth of a 50-60-year-old.
- FatFIRE is only possible when you are in the top 5 percent. And because of compound growth, you should aim to achieve a million in net worth as early as possible.
So the average 18 year old net worth is around $5,000. However, the top 1% of those who are 18 have $300,000: these people may have gotten this through inheritance, or they were entrepreneurs.
But by and large, you should assume that the net worth of an 18 year old starts somewhere close to $0 or possibly negative since many have student loans.
We’ve sort of identified that you want to start early.
How do you start early? Well, a milestone market is when you have a million dollars in net worth.
So how many others have already achieved a million dollars? In other words, how many people are well on a path to FatFIRE?
Let’s find out.
How Many Millionaires in the US?
How many millionaires are there in the United States? And what percentage of Americans are millionaires?
Across the entire U.S. population, about 18 million American households are millionaires.
Because the U.S. has 128 million households today, this means 14% of the U.S. households are millionaires!
In other words, once you reach a million, you are in the top 14 percentile of net worth in the U.S.
But you’re not in the top 5% of richest Americans (that requires $2.4 million dollars as we had previously mentioned).
But of course, having a million dollars in your 30s is totally different from having it in your 60s.
Let’s look at how many millionaires in America for each age group.
What Percentage of Americans are Millionaires by Age
Millionaires in the U.S. by age becomes much more interesting.
A net worth of a millionaire by age is:
Only the top 1 percent of households under 30 years old are millionaires in the U.S.
But for households over 60, 18% of them have a net worth over a million dollars.
The table above can also be illustrated in much finer detail by this chart I showed before, but with an extra horizontal line added to show where the net worth percentile crosses the millionaire mark for each age group.
Notice that the distance between each age group is largest going from 20-30 year-olds to 30-40 year-olds, and then progressively shrinks as one gets older.
What does this mean?
It means that the first million dollars are the hardest to earn. It’ll take you maybe decades and a lot of hard work.
But due to compound growth, the more money you have, the faster that money will grow.
This means the earlier you cross the millionaire mark, the faster you’ll be able to FIRE.
And if you get a million dollars before you turn 40, you have a real shot at fatFIRE.
Summary: Net Worth by Age
I hope this was a helpful exercise to go through to think about your net worth in relation to the average net worth by age group.
We often talk about the top 1 percent net worth, or how much millionaires are there in the United States, or how much wealth to be in the top 5 percent.
But you have to compare your net worth against those in your age group. Because the older you are, the more money it’s going to take for you to be in the top percentile.
And what if you’ve discovered that you are poor and in the bottom percentile for net worth by age group?
It is never too late. (And I’m serious!)
You have compound growth slightly going against you, but with the right habits, the right choices, you can do a lot to correct course.
If you are interested in a free consultation, reach out to me by writing to Veronica.
Investing during a recession or stock market crash? Read: Coronavirus Investing After the Stock Market Crash
Read my review for what I think is the best Vanguard fund for retirees: Vanguard Wellington Fund (VWELX): Retirees’ Favorite
Are you ready to start investing? Already investing? Check all the boxes with How to Start Investing: A Step-by-Step Guide