How Does Your Net Worth Compare to the Top 10% of Americans?

People often use annual income as a way to compare people's relative wealth, but there's a problem with this. Someone earning $100,000 might seem significantly wealthier than someone earning $50,000 per year. But if the person earning $50,000 saves diligently and puts $10,000 away for their future each year, they're in a better financial position than a $100,000 earner who lives beyond their means and is hundreds of thousands in debt.

That's why many consider net worth a more accurate measure of a person's wealth. Below, we'll talk about what that is and how your net worth stacks up to the wealthiest Americans'.

What is net worth?

Net worth is a measure of a person's wealth that looks at the value of the assets they hold and the total balance of any liabilities. Assets include cash in your name, like your savings account funds, as well as possessions you could theoretically turn into cash. For example, your house, your car, and your investments also count as assets. Liabilities could include your mortgage, credit card debt, or unpaid medical bills.

To calculate net worth, subtract the total value of your liabilities from the total value of your assets. For example, if you had $200,000 in assets and $50,000 in liabilities, your net worth would be $150,000.

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What's the typical net worth of the wealthiest Americans?

Unsurprisingly, those with higher incomes tend to have higher net worths. The following table breaks down median net worth by percentile of usual income according to 2022 data from the Federal Reserve.

The seven-figure net worth among the top 10% of Americans might not be all that surprising. But what is surprising is the difference between the wealthiest and least wealthy Americans. The top 10% has a net worth that's more than 182 times the net worth of those in the lowest quintile by earnings.

How can you boost your net worth?

There are ways that people of all backgrounds can boost their net worth and improve their financial quality of life. These tactics fall into two categories: increasing the value of your assets and reducing your liabilities.

Increasing the value of your assets

Some ways you can increase the value of your assets include:

• Boosting your savings, perhaps by negotiating a raise or starting a side hustle and saving the extra cash
• Investing your savings either in a taxable brokerage account or a retirement account
• Investing in your career development so you can boost your future earnings

Reducing your liabilities

Reducing your liabilities is all about paying down debt. Obviously, you'll need extra cash to do this. But there are other budgeting tools that could be helpful, including:

• Balance transfer credit card: These cards have 0% introductory APRs for a certain number of months, so they're a good choice for those trying to pay down credit card debt.
• Personal loans: You can use personal loans to pay off credit cards or other high-interest loans, like payday loans, so you have predictable monthly payments going forward.
• Mortgage refinancing: If your mortgage has a high interest rate, then refinancing when rates drop could help you pay off your debt more quickly.

Most of us probably won't achieve a net worth that puts us in the top 10% of Americans even if we take the above steps. But that's OK. Even if you only manage to boost your net worth a little, you'll likely enjoy a better standard of living going forward.