The Average Household Net Worth In America Is Huge!

According to the Federal Reserve's Survey of Consumer Finances, the average US household net worth is a whopping $692,100! And that's based on data from 2016, when the stock market and real estate markets were much lower.

Therefore, the average household net worth in America in 2022 is likely at least 20% higher, or close to $850,000. By 2030, the average household net worth in America could top $1,000,000. Of course, the average is not the median. But the point is that the average household is getting wealthier over time.

What's also interesting from the chart below is that the average net worth for a college educated person is $1,511,000 compared to a net worth of only $249,600 for someone with just a high school diploma.

Further, the average net worth for a homeowner is $1,034,200 versus only $91,100 for a renter. A 11X difference is massive! For all of you who still think it's wiser to short the real estate market by renting over the long-term, the data does not support your belief.

The average household net worth by age, education, race
Source: Federal Reserve Consumer Finance Survey 2016

Redemption For Above Average People

A lot of people have given me grief about my Average Net Worth For The Above Average Person post. People said my figures were too aggressive. Some even said I was out of touch with reality, implying their reality was more real than my reality. Fascinating!

But given the median age in America is about 38, you can see that my estimate of $660,250 for an above average 40-year-old is actually a little conservative compared to the Federal Reserve figures. This makes sense because when I created my net worth guideline chart in 2012, the S&P 500 was 25% lower than in 2016, and the real estate market still hadn't taken off.

The Average Net Worth By Age

Financial Samurai is not an average personal finance site. I want us to achieve financial independence ASAP through aggressive wealth accumulation. We can only save so much, which is why I'm so focused on investing, entrepreneurship, real estate, and alternative investments like venture debt and real estate crowdfunding.

My hope is that we can all live our best lives without needing to live like paupers in a cave somewhere. Aggressive savings is a given precept we should all practice. Financial independence is all about turning our savings into elite money warriors who will defend our freedom forever.

Given the latest data from the Federal Reserve, it's only right that I update my above average net worth figures for 2019 and beyond.

The Median US Household Net Worth

Average household net worth in America by age, race, education is huge

Clearly, the $692,100 average US household net worth figured is skewed by the super-rich who've done extremely well since the financial crisis. But it's still a good number to know if you want to compare yourself to the average.

The median net worth of US households is a more pedestrian $97,300. Median is the middle point where half the households have more and half have less.

$97,300 isn't terrible, but you're certainly not going to be retiring any time soon if that's all you got at around 38-40 years old. You will likely go the traditional route of working until at least 62 when you can start collecting Social Security.

I don't want Financial Samurai readers to compare their net worths to the median because it will give you a false sense of security. If you've got a $200,000 net worth at age 40, you might start patting yourself on the back, when in reality, you're just comparing yourself to the fella that slacked off in school and graduated with a D- GPA!

Here are the median and average net worth by age according to the Federal Reserve Survey:

Under 35: Median net worth: $11,100, Average net worth: $76,200

35-44: Median net worth $59,800, Average net worth: $288,700

45-54: Median net worth $124,200, Average net worth $727,500

55-64: Median net worth $187,300, Average net worth $1,167,400

65-74: Median net worth $224,100, Average net worth $1,066,000

75+: Median net worth: $264,800, Average net worth $1,067,000

As you can see from the data, the average 55+ year old is a millionaire, which is exactly what I expect all personal finance readers to be by the time they turn 55 years old as well. Heck, based on 401(k) alone, we should all be millionaires by 55.

It's reassuring to see that the median net worth amount for Americans eligible to start receiving Social Security benefits is around $200,000. Without any debt, living off a $2,000+ a month Social Security check + $500 – $800 a month in dividend income from $200,000 in investments is doable in most parts of the country.

Note: The current maximum Social Security benefit is $2,788 a month to those who had the maximum taxable earnings for at least 35 working years.

Top 1% Net Worth Levels By Age

Once again, don't get too comfortable with the Federal Reserve figures – median or average. Although the average household net worth is likely over $700,000 today, the average could be so much greater if Americans weren't so addicted to consumerism.

If you really want to get motivated, take a look at the chart I created below highlighting the top 1% income by age and multiplying each figure by an ideal income multiplier to figure out what the top 1% net worth is by age.

Yes, these net worth figures will be difficult to achieve, hence why only around 1% of the population can achieve them. But if you focus on building multiple income streams, continuously take calculated career and investment risks, religiously track your net worth, and stay disciplined with your consumption habits, you'll come closer to these figures than the average American who doesn't focus on their finances until it's too late.

Achieving a net worth equal to 20X your average annual income is the level where the true feeling of financial freedom begins to happen. Give it a go and when you get there, let me know if you agree.

Despite all the doom and gloom about how the average American is woefully unprepared for retirement, we now know that the average American is a big proponent of Stealth Wealth. Congratulations everyone! Time to treat yourself to something special.

My boy needs a new pair of shoes.


How much is your net worth? (All assets minus all liabilities)

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Keep Track Of Your Net Worth Like A Hawk

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After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. What you measure can be optimized.

Diversify Your Investments Into Real Estate

The combination of rising rents and rising capital values is a very powerful wealth-builder. I highly recommend diversifying your investments into real estate to grow your net worth.

In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.

Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore. 

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, investing in a diversified eREIT is the easiest way to gain real estate exposure. 

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio. 

About The Author

98 thoughts on “The Average Household Net Worth In America Is Huge!”

  1. What’s problematic about your article is that if the average (mean) and the median are so incredibly disparate, that means that there are significant outliers. In this case it means that the wealth is skewed up to a very small percentage of the population. Only 10% of the population is worth $1,000,000+ while as you noted half the population has a net worth of $100,000 or less. If you break it down even further, the brackets tell a story of a nation where the perceived great wealth if the nation is really only held by a few.

    1. The median net worth and household income has been steadily rising for the past few years now. But yes, the wealthiest households have gotten much wealthier. However, the quality of life overall has improved for all households.

      Few would trade being middle-class today for being rich 100 years ago. The quality of life overall is narrowing amongst all classes.

  2. I kinda feel horrified by the average wealth being so high compared with the median, then I knew I’ve forgotten that wealth inequality is much higher than income inequality.

    Anyway, I like your optimism, is really likeable indeed, but I also think you should consider that wealth accumulation (sorry if my english is bad) is much more dependent on what you parents and their parents (and so on) did than income, which is more skewed to the present.

  3. I am, or was, a professional macro strategist until a couple of weeks ago and so, at 60, find myself very much in the territory of the Financial Samurai. First, the mean vs. median story is critical and you can see that in Household Incomes as well; the top tier are doing fine whereas the median REAL income is about where it was in 1999. In other words, no real gain. There’s much hype made over recent wage gains but if you extract inflation, real wage gains have been basically zero.

    What the median story doesn’t address is that the population is older, which is to day you would expect (desire) that the aging population would have more Household Assets, or net worth, to handle retirement and the risk of a slowing in benefits like Social Security, Medicare to say nothing of the early retirees having to pay for their own healthcare.

    By the way, the recent post on the “Negatives of Early Retirement Life” has hit me like a ton of bricks.

  4. “My boy needs a new pair of shoes.

    Go USA!”

    Hahaha Sam I’m sitting in a public eatery and cracking up. Whoo new shoes! Haha. USA is an extraordinary country for wealth building. There’s maybe only 2 or 3 countries out there slightly better but we’re still the best.

  5. What is actually quite scary here is the fact that the Mean (or average) Net Worth is 7 times the Median Net Worth. That indicates a massive disparity where a very small percent of extremely wealthy individuals or families are skewing the average. The Median Net Worth is really not all that great, especially if home equity is factored into net worth.

  6. @Financial Samurai – what is the “$500 – $800 a month in dividend income from $200,000 in investments” that you mention in the post and on the podcast. Are these dividend growth stocks, CDs, income from an investment trust etc… or are you using ‘dividend’ in the broad sense to cover any passive income generated from an investment.

    The 500 to 800 a month is a return of 3% – 4.8% per annum. In your thesis what is it that is generating that ‘dividend’? That was the only point of the post I was unclear on.


  7. Games people play with percentages. Nothing changes. I am not a 1-%er. Nor do I want to be one or even be associated with them. But I have cracked doorways to peek through.

    It must be fun just being in the right place at the right time. Or having key pals in exalted locations. Take for instance Mr. K’s buddies of over 30 years ago who were complicit in a semi-rape… For the next week the most significant of the lot are getting week-long vacations (generously paid for by the Republican Party) in Canada, Mexico, or otherwise somewhere outside the U.S. to avoid being questioned by the FBI.

    Those in power do whatever the hell they want to and get away with it all the time.

    Can one be blamed for Not wanting to be associated with the 1%?

  8. Thank you for the inspiring blog. Just to let you know that the blog is read also in the Nordics. Deapite some things differ (health care, social security, taxation etc) the fundamentals remain the same all ower the globe.

  9. Interesting numbers. Obviously the average is skewed by the very rich, but better to aim at that than at the median.

    Would be interesting to look at the standard deviation from the mean and then to aim for 1, 2 or 3 sigmas from the mean.

  10. Talk about the discrepancy between median and average. The large skew one tail of the net worth distribution has really shows the concentration of wealth at the top end. This trend is likely to continue as more people at the top compound their wealth in years to come. Seeing a steady progression on the median level would be much more encouraging for the nation. This would provide more equitable outcomes and comfortable retirements for more Americans.

    I’m not in the 1%, but hope to join through disciplined investing and paying attention to our savings rate. Thanks for providing an update with new Federal Reserve data.

  11. The real story here is that Sam has 200 readers with net worth north of TEN Million Dollars… Holy smokes, that’s a crowd of ballers!

    1. If only each one of them could Paypal me just 1% of their net worth, I’d have $20 million and be so rich! Surely, they can afford to donate such a little amount to compensate me for all my efforts over the years.

      Sharing is caring!

  12. The Alchemist

    Hmmm. What I’d love to see is the average net worth in the Bay Area/Silicon Valley….. (talk about a skewed distribution!)

  13. “Comparison is the thief of joy.”

    After reading this article, I had a nasty taste in my mouth. You can do better than this.

  14. James Heidebrecht

    Wow this was a great article. It really gives you insight into the disparity. When you look at Jeff Bezos and his worth it really is disheartening. I read somewhere that he could solve homelessness in the US and would still have billions – yet he pays his employees poorly. It’s hard to comprehend.

  15. Re: net worth of renters vs. homeowners

    Um, maybe there might be, just maybe, a small handful of confounding variables here? I would be a sizable portion of my own net worth that the average homeowner has a very, very different income and non-RE net worth profile than the average renter. They also are very likely to have different education levels, professions, etc.

  16. Bill Gates walks into a room full of 40 recent college grads.. on average everyone is a billionaire in the room now.

    In a world full of outliers…Medians matter

      1. Do you not realize that the richest 1 percent of Americans own nearly half our country’s wealth? How can you possibly discount medians, did you stop taking math in 6th grade or 5th?

  17. Using the mean to express average for a skewed distribution is a mistake. Net worth and income are skewed to the right by inequality by the fact that incomes are unbounded at the upper end but bounded by zero on the left (nobody has a negative salary). Only the median gives a representative average in such cases.

    Imagine a room containing Jeff Bezos and 9 people earning $50k per year. The mean income doesn’t tell you anything useful, except that using it should be reserved for normal (bell shaped) distributions.

    1. Maybe one solution is to change one’s circle of friends or whom one associates with? I hear you’re the average of the 5 people you most hang out with. But then again… there goes the use of the words average again.

      1. Interesting theory – there might be some truth in it as people naturally select similar people as friends.

  18. Financial fire power

    This works for any income level, but I’ll focus on top 1%. If you are following the progression in the charts above, you are saving a good chunk of it, and if you are in the top 1%, a large portion also goes to taxes. Do you really need 20x income? Wouldn’t you base it on expenses which would presumably be much lower?

  19. Hmmmm your 1% numbers seem low. I’m 25 and worth over 500k+ self made and don’t live in an expensive coastal city. A few of my friends that are my age have NW north of 100k then the rest of friends/coworkers are closer to 0 from student loans, credit cards, car loans etc.

    Doing my best to be a millionaire at 28 like you! I don’t get those IB bonuses though… but my business income seems strong!

    GF does quite well also. We’ll hopefully hit 8 figures in my 30s :)

    1. Congrats! What field are you in and what did you study or where did you go to school? Interested if your path is replicable.

  20. I’m not sure if I’m ashamed to be below average or happy to be better off than 50% of the population.

  21. Frugal Bazooka

    I have to say I love when your blog posts include relevant tables of statistics. For all the interweb noise that currently passes for discussion, your blog is a breath of fresh air in distilling and parsing relevant data for those of us who have forsaken the horribly corrupt (financial) media. I know you’ve developed a relatively thick skin dealing with those who want to nitpick etc…but for what it’s worth, a lot of us get what you’re trying to do and appreciate it.

  22. Travis Turner

    “Further, the average net worth for a homeowner is $1,034,200 versus only $91,100 for a renter. A 11X difference is massive! For all of you who still think it’s wiser to short the real estate market by renting over the long-term, the data does not support your belief.”

    Correlation is not causation. I propose the vast majority of renters are so because they are too poor to buy a house. IMO, owning is probably better than renting in the long term but I don’t think this data point is useful in arguing for that position.

  23. I don’t understand why so many of these comments are negative?

    Is it because people are jealous of what others have made and saved? If so I’m in the clear bc I was one of the 4% of readers who voted and had a negative net worth:)

    While I may have a negative net worth now I’m working every day to get to the other side by focusing on career, learning about investing/real estate, and practicing self-discipline. I think that is a much better plan than being upset about an article highlighting how wealthy most people are that live in America:)

    Anyway, have a good day Sam and keep releasing these hard-hitting pieces.

    1. Love the attitude!

      Not sure exactly why there is so much agitation towards the Federal Reserve numbers as well. Either get agitated or get motivated.

      Or someone once said, “get busy living or get busy dying.”

  24. Simple Money Man

    I’m not surprised. At the same time, I agree that it could be skewed by the super-rich. They know how to stay super-rich because once you achieve super-wealth, it’s smooth sailing and easy accumulation since the market performance has helped out so much over the past 10 years!

  25. Thanks for highlighting these data points! Wow I wouldn’t have guessed the average or the median. That’s interesting that they’re at those levels based on 2016 data and that the stock market has climbed around 30% since then. I like looking at data points for motivation.

  26. “Further, the average net worth for a homeowner is $1,034,200 versus only $91,100 for a renter. A 11X difference is massive! For all of you who still think it’s wiser to short the real estate market by renting over the long-term, the data does not support your belief.”

    The data (at least what you’ve presented) doesn’t refute that belief either. Correlation is not causation. To be a real estate owner, you need to have a down-payment. To have a down-payment, you need some combination of saving discipline and/or excess income. It should come as no surprise that people with those qualities are richer than those without. There are other confounders, including the fact that homeowners are usually older and often have stable jobs and community roots. In short, home owners tend to be very different people than renters. Rich people own real estate. Owning real estate doesn’t necessarily make you rich.

    Anecdotal, but I’ve rented all my life and am a 1%’er. I could buy if I want to, it’s just never made sense based on the numbers, so I’m happy to put my money in yieldy assets instead of home equity.

      1. Where I live, being long S&P500 is and has been much more attractive than being long home equity. I get that it can be different in other areas.

        “But 11X is too big of a multiple to ignore.”

        It still doesn’t imply causation or that owning your home makes you rich.

        I could rewrite your statement “People who own Porches have an average net worth of $7mm vs those who don’t, who only have average net worth of $700k. For all of you who still think it’s financially responsible to own a modest car, the data does not support your belief.” It’s obviously absurd, but suffers from the same type of erroneous inference.

        To be clear, I’m not arguing that owning your home is bad. I think it’s a great forced savings plan for a lot of people. I just hate 1-dimensional analysis that ignores very obvious and significant confounders and doesn’t do anything to shed light on the actual underlying dynamic.

        1. I would say the one dimensional analysis is you thinking renting is the way to go just because you are “in the 1%“ without making observations about the data. You can deny the data all you want, but your situation of saying you are rich because you rent doesn’t help anyone.

          You should be happy if you are rich. Don’t let missing out on the housing boom get to you. But the reality is, most people who are rich don’t need to say they are rich. Nor are they triggered by data that is in front of them.

          I’m happy to own real estate. It has been one of the biggest well creators for me and my family without having to work too hard.

          1. “You can deny the data all you want, but your situation of saying you are rich because you rent doesn’t help anyone. ”

            a) I am not denying the data. I’m sure the data is 100% accurate. I’m just suggesting that there’s a bad inference from the data being made. Namely, “Rich people own real estate, therefore real estate makes you rich”.
            b) I specifically cited that my case was “anecdotal”. Anecdotes are not data. I’m just suggesting an alternative narrative. Namely that investing in high return assets could be better than investing in home equity for many people.

            “You should be happy if you are rich. Don’t let missing out on the housing boom get to you. But the reality is, most people who are rich don’t need to say they are rich. Nor are they triggered by data that is in front of them.”

            a) I am happy I’m rich.
            b) Missing out on the housing boom hasn’t gotten to me. I made a lot more in the financial asset boom than I would have in home equity.
            c) I’m not “triggered”. I’m a data junky who cringes when they see bad (or unsupported) inferences made from data.

            “I’m happy to own real estate. It has been one of the biggest well creators for me and my family without having to work too hard.”

            a) Awesome. Owning their home makes a ton of sense for a ton of people. I’m glad you’re one of them.

            1. 100% with John on this one. Correlation is not causation. I moved away from the SF Bay area 3 years ago and benefited significantly from real estate gains, but my new home has not increased in value since I purchased it and is still worth less than what the original owners paid at the peak of the market in 2007.

            2. I’m with John too. BTW, I’m a renter and my net worth is 3x the average. I’ve never said no one should own a home. I don’t own because of the particulars of how my region, personal history, and my lifecycle told me it was going to be a financial drain.

              Averages lie. I think absolutist type statements about homeownership based on averages are misguided. I know people who’ve lost their shirts on homes but insist buying their home was the best thing by far. I just scratch my head.

            3. While I don’t own my primary city residence, I was looking around NJ and CT for a potential “retreat”. I was shocked at how many places are offered at the same price or less than where they traded in 2003-2008.

              10-15 years of 0% returns is a disaster. WORSE STILL, 10-15 years of inflation mean these houses are worth substantially less than they were in real terms. WORSE STILL, these houses now have 10-15 years of wear and tear. They may need a new roof, or boiler, and an updated kitchen and bathrooms to sell. WORST STILL, transaction costs associated with buying and selling can easily amount to to 7-10% of the value of the home. ALL SAID, THESE HOME OWNERS HAVE SUFFERED LOSSES UPWARDS OF 40-50% ON THEIR HOMES IN REAL TERMS. That’s a catastrophe. Renters in these areas made out like absolute bandits in $ terms, not to mention not having to deal with most of the headaches of home ownership.

              This is only one segment of the real estate market, but I think Sam’s experience in New York, San Fransisco and Hawaii are a narrow slice of the market and don’t represent the norm for most home owners. And even in those places, it’s not hard to make the case that valuations are stretched now that we’re staring down a rising rate market and a potential recession in the next couple years.

              Anyway, the rent vs buy question is a nuanced one and depends on:
              1) How does the rent vs buy math look in your area?
              2) How much do you value flexibility? Might you want to move for a job, a loved one, or a change of scenery? Might your housing needs change as your family changes?
              3) How willing are you to engage in the headaches of home maintenance, renovation, and upkeep?
              4) What does the housing outlook look like in your area? What’s the reasonable risk reward? How might new tax laws benefit or hurt you?
              5) etc. etc. etc.

        2. TheRichRenter

          “Many rich people own real estate. Owning real estate doesn’t necessarily make you wealthier than renting.” This is my adaptation of John’s statement.

          I am not against people who own real estate. I am happy for them. But using an 11x difference in net worth between owners and renters in order to justify buying a house to live in instead of renting is not good reasoning. Many billionaires own houses. Many college students rent. Does that make owning a home 11x better than renting a cheap apartment for the average american? I don’t think so.

          I am a renter with a high liquid net worth. My income was never very high. Focusing on cost made it possible for me to save much more than the average person. Cost of living is the number one variable that determines how much you can save. Renting allowed me to save a high percentage of my income. I am financially independent today because I rented and invested intelligently in the stock market.

  27. Heather Warner

    What I didn’t see in your figures was average income. The median income for the state of Ohio is only $48k. The upper figure for middle class is just over $96k. Pew Research has the national middle class income as $55k. Even saving every bit of income for 20 years barely gets the average income family at your numbers. Many like my husband and I after dealing both with divorce have our retirements and savings decimated if not wiped out. If your figures are true then elderly years don’t bode well for the near 70% of the American population that considers themselves middle class. Many people even with high financial savings can be wiped out due to incapacitating medical expenses and long term care. In my field of health care I’ve seen elderly couples with your numbers financially wiped because of catastrophic illness to both of them. I think the wider lesson should be living life to the financially responsible fullest while you can, plan what you csn for the future and let life lead you on the journey. No matter how much money you saved, your in no position to use it if the stress causes a fatal heart ache trying to achieve it.

    1. Well said. Anything and everything can and will happen. Health care costs being a big one. It’s a travesty how expensive health care is in America, and how the system is so jangled. We spend $1,760 a month for a family of three on health care. And we never go to the doctor (thank goodness).

      Save and invest wisely for the unknown future folks!

      PS: the data is from the Federal Reserve Consumer Survey. I’m just interpreting the data and coming up with my own financial targets for those looking to achieve financial freedom or push themselves to accumulate more.

      1. Dr. Remoulak

        Not only is that a crazy amount for a family of three, but from what I can gather it’s an amount that has the very real possibility if significantly growing over the next several years. Like many, concerns about healthcare costs continue to make ma hesitant to finally take the plunge into early retirement.

        1. The healthier you are, the more you will pay.

          Is it not the responsibility of the healthy to help subsidize the health of the unhealthy? That is the question.

          The problem with America is that we’ve taken our luxuries a little too far.

          Fast Facts
          According to data from the National Health and Nutrition Examination Survey (NHANES), 2013–20142,3,4,5

          More than 1 in 3 adults were considered to be overweight.
          More than 2 in 3 adults were considered to be overweight or have obesity.
          More than 1 in 3 adults were considered to have obesity.
          About 1 in 13 adults were considered to have extreme obesity.
          About 1 in 6 children and adolescents ages 2 to 19 were considered to have obesity.

          We are eating ourselves to death and putting a huge strain on our healthcare system.

          But what can we do but try and keep ourselves fit. It’s not our place to tell someone to start eating better and exercise more. Is it?

          1. Indeed Sam, it IS our place to tell others how to eat IF we are paying for their healthcare. Of course, I’d rather not tell anyone what to do with their life and hence not be financially involved either.

  28. These figures definitely make it seem like retirement is for white people. You’re talking about comparing median instead of average, and that doesn’t paint a rosy picture at all. Being constantly LIFOed in the DC metro area, it’s all starting to make sense: I never stood a chance.

    1. What race are you? At least the Federal Reserve recognizes Black and Hispanic people in their survey. Asians are nowhere to be found in the survey or the chart (under Race or ethnicity of respondent)! Hmm, could the government have an agenda?

      1. Black. When does the government not have an agenda? My wife is asian. When she gets pulled over, her paperwork describes her as white.

        Anyway, I was excited to finally save up $8k. I’m 35, so I’ll probably be working until I’m dead like those before me.

        1. Kingofthenorth

          Hey man, stop playing the victim. The only person it hurts is you. There are a ton of rich black people. Go make it happen. No one is gonna help you but you.

          1. Hey man, way to invalidate my life experiences with a hackneyed phrase. But, it’s not like that’s anything new.

            I’ve been trying to make it happen for the past 5 years. I’ve had 5 jobs and have $8k to show for it. No one’s gonna help me but me suppposedly, but somehow my non-black peers keep finding higher starting pay and more frequent promotions. At some point, you have to recognize that the consistent statistics (and well, y’know regular life of people locking doors and clutching purses when I’m in work clothes) may hold some truth about the work environment and ultimately, my prospects of success in this country.

            1. I’m 25, Hispanic and from/live in a poor state. I have grown my networth to over 500k+ from scratch. The majority of it has come from making deals happen through my own accord. Start a business, learn about investing, get a second job, cut expenses to as low as possible and then save like crazy.

              My mindset that I can conquer anything has helped me conquer everything. You drive your destiny no one else does. You don’t need anyone to hand you a thing to rise up either. I’ve had to help myself to everything. It’s been busting my ass for a decade+ to get here. But if you commit, it’ll pay off.

            2. I’m a mid 30s, Black, first generation immigrant to this country with a $1.3M NW starting at -$12k in 2008. Success can be more difficult for POC in the US, but it is by no means impossible.

              What I’ve found consistent though is people that complain about circumstances they have no control over tend not to be very successful. People that take action on the things they do have control of however, tend to be very successful in whatever they choose to do.

              Pick your path.

            3. First generation immigrant from India who grew up in the slums of Mumbai. Mid 40’s with current net worth close to $4M. My accountant who is a first generation immigrant from Nigeria is also a multi millionaire. US born POC carry a lot of baggage… Is it harder? Of course! But as Lion-FI rightly pointed out, take action on things you can control to be successful, instead of blaming on circumstances.

        2. If you segregate by racial background, Asian and White households have far greater net worth than Hispanic and Black (in that order.)

          There is little doubt this disparity stems from structured racial preferences that used to take place in obvious ways and sometimes still does, but now is more oriented around death by a thousand cuts if you are a poc.

          The deck was and is stacked. Screwed up as that is, you can’t change the past. However, I suspect that there is still something you can do to improve your personal situation. I wish you the best of luck.

  29. Please be careful with how you use the word “average.”

    I would categorize the following statement as being incorrect: “As you can see from the data, the average 55+ year old is a millionaire.” The 50th percentile tops out at $264,800. Since 50% of the population has a net worth of less than $265K, I believe it is fair to say that the average 55+ year old is NOT a millionaire (even though the average net worth of a 55+year old is $1M+).

    1. I agree with BB here. The only statement in your entry that I really took issue with was the one he quoted. It would be really useful to know what percentage of 55+ year olds are actually millionaires.

      You can talk about specific figures as means, medians, or even — sometimes — averages, but a person can’t be an average person. He/she can have average wealth or income.

      But I take all of your points here. If you have median wealth in any of these brackets, you’re very poorly positioned for retirement.

  30. Too bad much of this wealth is imaginary. What drove it to such levels? What has so outpaced income growth?

  31. Good post, Sam. It’s easy to get swayed by statistics. Your site is aspirational so that’s all that matters for me. With tongue planted in my cheek, I will say I am delighted to know that I am in the top 8% of 9,400+ savvy Financial Samurai readers in net worth. My boy is hankering for pizza, I think I will take him for a treat :-)

    1. Recovering Engineer

      Top 8% of his poll would mean you have a net worth of $3M-$5M. I don’t think you this blog is aspirational, sounds more like you have already made it pretty well!

      1. Yes, good observation, but it is much lower than Sam so I learn a lot from his insights. No matter what our net worth, we can all learn from somebody else.

  32. Hi Sam,

    Great post. Those are really useful as it is easy to see where one stands compared to other people (and avoid complacency).

    One quick question: I get that the ideal income multiplier increases as you are building more and more passive income streams over time. However, how do you determine that the multiplier jumps from 5 to 10 for instance? Is this based on your personal experience?

  33. It’s the median that scares me. That’s a lot of society that will need a helping hand when they realize they haven’t saved enough. It won’t be the Uber wealth of Jeff Bezos and Warren Buffet that saves them, but it will be what skews the average.

  34. The disparity between renter net worth and home owner net worth is interesting. Last week I was researching this topic for an article and what most people (and the government) are quick to label as net worth is better described as *augmented* net worth.

    Calculating your *liquid* net worth is a much more accurate measurement of how wealthy a person is. I imagine if estimated value of personal residence were to be excluded, the numbers would be closer to that of renters. Perhaps a bit better, but not my too much.

    In tough economic times, your personal residence isn’t going to produce income. It’s better to have the bulk of your money in income producing assets like dividend-paying stocks, rental property, and profitable businesses.

    Not saying your home isn’t a great place to put money, but if we’re being real it’s not a contributor to your overall wealth. Since it regularly costs you money, it’s actually quite the opposite.

    1. Having a paid off house may not contribute directly to your overall net worth, but it certainly reduces your fixed overhead. After taxes, insurance, and maintenance my home costs ~$800 per month; renting a similar home would cost ~$3,000 per month.

      I reduce my overhead by approximately $26,400 per year by owning my home which cost $600,000. This may only be a 4.4% return, but it is contributing to my wealth since I have $26,400 more income per year to invest elsewhere.

      1. Excellent point Matt, and totally agree. I am currently weighing paying off my home as well, which would put me at $800/mo for taxes/insurance only. I would be freeing up $32,000 annually to invest elsewhere, and my dilemma has been ‘do I pay off the house?’ or ‘do I keep the write-off and invest elsewhere?’. Sounds like you’ve already executed on this strategy and went with paying off the home, and the older I get the more I lean that direction.

        In a downturn your debt service is less than what you could rent a one-bedroom apartment for in most markets, so you have that security, and in normal times you then have a large amount being deployed toward other investments. And a paid off home most importantly is a SWAN item that is hard to put a price tag on!

    2. Hi Ron,
      Great comments and I find most people would agree with you. I take it differently and believe the personal residence can be produce cash flow that is substantial and sometimes even better than a professional career. This is all assuming you don’t just live in your primary residence but also rent it out, Airbnb etc. It really depends on location and the size of the property you have. For example, my primary residence produces enough rental income to support the mortgage and utilities so we are only required to pay for the property taxes and insurance. To note, this is not just a one off. I have several properties like this and I have friends and colleagues that do the same. It generally wouldn’t work for condos/townhouses. In tough economic times its even better given more people need to rent during a recession. A primary residence that is adaptable to different environments and in a primary location is not so different from a investment/rental property that is a income producing asset. I would say your home is a primary driver for your overall wealth when done appropriately.

      Just a bit of a background of myself. I work in real estate, in my early 30s and have net worth ~$3MM. Would never have got here without the home as a primary driver. Leverage and cash flow is key. I would venture to suggest to look outside your comfort zone and outside what is accepted as common knowledge.

      1. Turning your primary residence into a money machine is definitely a wise move. Most people don’t do that. My play is more in dividend-paying stocks and index funds.

        I need to add a rental property to the portfolio. Just not an area that I know how to evaluate well enough to feel comfortable investing lots of capital. I currently use REITs for real estate exposure.

        How long have you been in the business?

          1. Hi Liam,
            I still live in the same house. The tenants can live in the basement, back of the house etc. It depends on what type of product/size you have. If you have a duplex/triplex/quadplex. The average size of my properties are over 5000sqft.

        1. Hi Ron,
          I’ve been doing this about 5 years now. People thought it was crazy to buy a million dollar house. I’ve purchased a handful. Now the houses are each $1.7-2MM. Being in the industry helps. Knowing how to leverage and having a team is the secret. Ie. $200K down for a $1MM house that pull in ~$5K a month and you get to live in it practically free (~3000sqft). You would be able to save for your next place immediately. I’m in Canada. You can probably guess the city.

          Having the rental properties is essentially like having several people working for your every day, forever. Hard to beat and you have full control of it. Another analogy (Starcraft or other strategy games) I like to use is like having expanded several bases early in the game while your opponent only has one (their career). Early on, its difficult as you need to sacrifice and save But once the bases are operational, your volume of output is compounded.

          1. It sounds like it’s working out for you very well. Are you still shopping for new properties or is your portfolio at a size you like?

            Do you use a large portion of the rental proceeds to pay down the debt on the investment properties faster?

            I never really got into Starcraft. In the past I was a pretty serious World of Warcraft raider though.

            1. Hi Ron,
              I’m always shopping and keeping an eye on the market. It’s really difficult to pick up quality product for under $1.5MM now that cashflows given the strong market conditions. I don’t pay down my debt aside from the minimum mortgage payments. My rationale is that my money can be spent to leverage again on another property at 5x which would be equivalent 15-20% return on my initial investment. So 15% vs 4% (say for mortgages). The game plan is to pick up more as we go along and sell 2-3 to cover the rest of the portfolio in 10-15 years so everything is clear title. Cash flow by that point would be substantial and I would take an HLOC on all the properties to add to the flexibility in leveraging. If you get lucky, maybe a developer knocks on your door and requires your lot to develop a low/high rise. That would rarely happen for a condo/townhouse. That is happening to 1 of the property I have and possibly another. So sell one an potentially buy 2 clear title or 3 leveraged.

              An advice I often give is that we are young enough to out live any market correction. (Based on your profile pic, I’m assuming you are around the same age). Essentially even if the market tanks (which is generally what people fear when the real estate is so hot), as long at your property cash flows, you don’t really care. I had that mentality going in but got lucky so things grew exponentially. As FS often mentioned, long term real estate is always going up.

      2. Exactly. I agree with Sam and above comments supporting home ownership. So many many advantages to owning primary residence, especially single family with rental income potential. Such a fantastic back-up, in Canada, tax-free capital gain, etc. etc. I have worked this out with every possible scenario on spreadsheets and always owning a home is substantially better. Exception: If you are unstable, i.e. buy and sell on impulse, sell at the wrong time, change jobs, move around, etc. but even then you can keep the house and rent it while you do other things. The house expenses do not increase very much over the years and after the mortgage is paid off (you can always refinance and reduce the payments, but it is foolish to use equity to pay debts or invest for most people) you only have upside, but rents go up and up and up. Even if you retire at 70 you can expect to live well into your 90’s and you will need a lot of money. Imagine living on the income you made 30 years ago!! Imagine being 90 years old having spent everything. Renting will keep you in the poor. What people fail to realize is that the sacrifice to get yourself into the upward glide with net worth is very little and short time-wise. Agressive saving still allows quite a nice lifestyle even in early years unless you consider it essential to eat out every day, drive new cars, and in general spend any leverage you have. Great discussion.

    3. Recovering Engineer

      There is a $943,000 gap between the net worth of the homeowner vs. the renter. For your statement to be true, that the gap in net worth is from primary residence, that would mean the average homeowner in America has over $900,000 in equity in their home. But the median home price is only around $200,000.

      Even if we assume the average home value is double the median and we assume that every homeowner has no mortgage (both poor assumptions) that would mean their primary residence contributes $400,000 to net worth. Leaving an additional $543,000 of net worth over the renter unexplained by the home itself.

      1. The average numbers aren’t representative of the U.S. population in general. The median number of $231,400 for a homeowner vs. $5,200 for a renter are a much more plausible representation of reality than a 900k difference.

        High net worth people skew the average numbers up thus painting a much rosier picture. Using median numbers for home price and average numbers for net worth certainly supports your argument but again, isn’t representative of reality.

        The typical homeowner in America doesn’t have a net worth in excess of 1 million dollars which is what the infographic would lead you to believe.

    4. Yes, liquid net worth is very appealing, but your house does have value because it can be sold. You have optionality.

      As a renter, you have no optionality. You are a price taker and are at the mercy of the landlord dictating the price.

      Folks don’t have to be long multiple properties to gain wealth. It’s just harder to gain wealth shorting property through renting. Staying neutral by owning your primary residence over the long term has shown to pay off.

      1. At least in my State, your primary house is also your homestead which means the money you have in the property is protected. A judgment can’t touch it. It’s why doctors, with so much malpractice risk, will often put a ton of money into a very expensive property.

        There is a lot of value in owning a primary residence beyond just equity. I never really looked at renting as “shorting” property, but that makes perfect sense. Appreciate the insight.

  35. I was shocked when I first read the average net worth #’s in the beginning of the article, it was way higher than what I was thinking, and then I reminded myself it is AVERAGE and thus highly skewed by the Uber wealthy.

    I’m glad you threw in the median numbers which went along with what I was thinking most people likely have (however by its very definition, 1/2 have less). That number is sobering as there is no way you can support anything but a barebones lifestyle with the income that can be derived from that amount (and even less if people are house rich cash poor which can be the case when the majority of that is tied up in home equity that is a lot harder to tap into in retirement unless you are willing to downsize (or do a reverse mortgage).

    I’m doing well for my age and circumstances but do not have the 1% threshold given the formula you have given. There are TWO main reasons for that, doctors have a decade of lost earnings and thus have a late entry to the game and my biggest one which was my divorce (take out the effects of my divorce and assuming that I discovered the financial light regardless (I discovered it mainly because I was reeling from the divorce so that is a big IF that I would have gotten into the FIRE movement without that impetus) and I would have easily broached into that 1% realm.

    Good goal to strive towards. Thanks for the new #’s and new goals to set.

  36. I’m sorry but I don’t buy it.

    You’ve anchored on to a Republican “Trump is a god-send” bloated figure (alternative fact) elevating the economy’s rise.

    My friends, my family, my colleagues…all whom I know, have considerably lower net worth.

    Maybe, just maybe, scraping together every piece of crap laying around their property sold for top-dollar to suckers, every penny of unclaimed money, adding up scrap metal and ‘collector’s items’ found in attics…they might get somewhere in this range. Frankly, though, I doubt it.

    Past tables I’ve read are lower by many leagues and factors. Indeed the definition of “net worth” is flexible. I do know that most people don’t do this ‘stealth wealth’ game and truly are as poor as they look, otherwise they would not be so needy and desperate.

    1. John H Du Hart IV

      Lurker99, That is why looking at the median number is more realistic in this case. When looking at data, when the Average is significantly different than the Median then the Average does not properly represent reality of the sample size.

      Basing conclusions here on the Average is not right.

      1. Thank you. Median is less affected by outliers. Median net worth of all families is 97K. The mean was dramatically skewed by the ultra rich. This author is misleading to put it nicely.

        1. Have to agree. The ‘Average’ is an almost meaningless statistic in this case. You MUST use the Median to make comparisons and assumptions.

      2. Yes, it’s more realistic to look at the median net worth. But should you compare yourself to the median household? They are not doing so well.
        Shooting for average is a much better goal. That net worth is not out of reach even with the ultrarich skewing the numbers.

        1. Even though we have reached almost average I recognize that there was a lot of luck involved including having benefited from far lower education costs, being dual income no kids and being heavily invested in stocks and pulling out before the last big dip and reinvesting some before it started climbing back up.
          Most people don’t fall into this category moreover can’t.

    2. Recovering Engineer

      The definition of net worth is assets minus liabilities so that’s not really something that is “flexible.” But this is Federal Reserve data from 2016, Trump wasn’t even in office yet so not sure how you are thinking this is some sort of fake Trump news. When you say you aren’t buying it are you saying that the Fed is lying? The numbers are the numbers even if they aren’t representative of your immediately family or friends. By definition 50% of the people have to be below the median.

      1. Cassandra Lewis

        Well said. I can’t stand how EVERYTHING is Trumps fault! In this case 2016 Fed reports are Trumps fault. (Though that information is right in the article.) Some people only see what they want to see. Reading between lines that are not there. Somehow Donald Trump is to blame for the actions of private ADULT citizens he has never met. People are just insane. My parents taught me personal responsibility. I am responsible for my actions. Every single thing I do is a result of my decisions. Not Trumps fault or a Democrats fault. If everyone took real responsibility for their actions and quit blaming everyone else….. we would live in a better world. Sorry for the off topic rant. Lol.

      2. While I agree that it has nothing to do with politics, I doubt that Lurker takes issue with the median net worth ($92k), I suspect that his misunderstanding stems from conflating average with typical i.e. the average net worth ($692k) is skewed by outliers (high net worth families) whereas most Americans are probably closer to the median (as I’m sure you are aware).

    3. You’re looking for a menace where there is none. “Financial Samurai is not an average personal finance site.”

      Regarding your political statement, the Republicans are losers. Does that sound satisfying? What haven’t they lost? Welfare, school busing, affirmative action, abortion, immigration, same sex marriage, don’t ask don’t tell. Their only cause left is gun rights, and that may be lost soon. So the Republicans have already lost. Republicans today are Democrats of the past. We won! Hooray and soon the homeless will no longer suffer on the streets and that scrap metal will make you rich.

      Oh my point, I agree Financial Samurai is not an average personal finance site.

    4. Completely disagree. I am about as normal as they come and according to this article I am in the top 1%. My wife and I both work good jobs (160k gross), but make less than the techies and we have a young son. It helps that I was able to build our house so a lot of our net worth is tied up in that, but we still have over $200k in retirement/brokerage accounts. I am 27, she is 28. It can certainly be done!

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