Net worth is a common way to measure wealth. Add up the value of all your assets, subtract all your outstanding debt, and voila. For example, if you have $100,000 in retirement accounts, $25,000 in savings, and $10,000 in debt, then your net worth would be $115,000. This gives you an idea of how you're doing financially.
Once you know your net worth, you may be interested in seeing how it compares to the upper, middle, and lower classes. Thanks to research from the Federal Reserve, we have data on just that.
Here's the net worth of the upper, middle, and lower class
Class is often based on income, at least in financial discussions. The highest 20% of earners are considered upper class. The bottom 20% make up the lower class. Everyone else makes up the middle class, specifically the lower-middle, middle, and upper-middle class.
The Federal Reserve provides the median net worth for these groups in its 2022 Survey of Consumer Finances. Here's the much each group has:
- The upper class starts with an average net worth of $793,120. That's for the top 80% to 90% of earners. The top 10% has much more -- an average net worth of $2.65 million.
- The upper-middle class has an average net worth of $300,800.
- The middle class has an average net worth of $169,420.
- The lower-middle class has an average net worth of $58,550.
- The lower class has an average net worth of $16,900.
Keep in mind that net worth isn't the only important factor. That alone doesn't signify that you're doing well financially.
If you're a young adult, it's normal to have a lower net worth. You haven't had time to build wealth yet. And while a high net worth is generally a good sign, it's not the only thing that's important. If you have millions of dollars, but you're worried about spending any money on yourself, that's not healthy, either.
How to increase your net worth
There's no need to obsess over your net worth, but it is important to build wealth as you get older. You'll have more financial security, and by setting aside enough money, you'll be able to retire when you want.
Here are a few smart financial habits to follow that will help you do this:
Commit to saving and investing a portion of your monthly income
A popular recommendation is to save 10% and invest 10%, but you can use whatever numbers work for you. For example, if you make $5,000 per month, you could transfer $500 to your savings account and another $500 to an investment account.
Invest heavily in the stock market to grow your money
The stock market is one of the most proven investments historically, with an average annual growth rate of about 10%. If you aren't planning to retire within the next 10 years, most of your portfolio should probably be in stock investments.
Build an emergency fund to be ready for unexpected expenses
Emergencies will happen, and if you're not prepared for them, you may need to go into debt to pay for unplanned bills. Put some of your savings toward an emergency fund -- when fully funded, this should have three to six months of living expenses.
Be very selective about taking on debt, and avoid high-interest debt
Some types of debt can work out well, with mortgages being the best example. But high-interest debt, such as credit card debt, makes it much harder to build wealth.
If you follow those habits, your net worth will grow over time. Now, it will go through ups and downs. You might need to dip into your savings at some point, or the value of your investment portfolio could temporarily drop.
For that reason, you shouldn't get too wrapped up in tracking your net worth from month to month. No matter what class you're in now, and where you end up, building wealth is a long-term process. Results are measured in years and decades. As long as you have good money habits, you'll be going in the right direction.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
FAQs
But our editorial integrity ensures our experts' opinions aren't influenced by compensation. Terms may apply to offers listed on this page. The upper class has an average net worth of $793,120 to $2.65 million, while the lower class has $16,900. The middle class ranges from $58,550 to $300,800.
Is middle class based on income or net worth? ›
Economic Class as Defined by Income in California
By Pew's standard, a California household has to earn between $61,270 and $183,810 to join the state's middle class. Those earning $61,269 or less are lower-middle class and $183,811 or more buys you a ticket to the upper-middle class.
Are millionaires upper class? ›
With that in mind, a net worth of $604,900 would put you in the upper 25% of American households and having $1 million or more should make you firmly a member of the upper class. Of course, it's important to remember that net worth is calculated by adding up your assets and then subtracting your liabilities.
Does your income make you upper class, middle class, or lower class? ›
Your household would need to earn at least $64,224 to be considered middle class in the Garden State, and earning more than $192,692 would put you in the upper class.
Who is considered the upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range. "The upper middle class has grown...and its composition has changed.
What net worth makes you upper class? ›
The upper class has an average net worth of $793,120 to $2.65 million, while the lower class has $16,900. The middle class ranges from $58,550 to $300,800. You can grow your net worth by saving and investing consistently, investing in the stock market, and being careful about taking on debt.
What net worth is considered rich? ›
For example, individuals with $1 million in liquid assets are generally classified as having a high net worth. To be considered very high net worth, one might need assets ranging from $5 million to $10 million, while an ultra-high net worth status could require $30 million or more.
What social class is the richest? ›
The term upper class refers to a group of individuals who occupy the highest place and status in society. These people are considered the wealthiest, lying above the working and middle class in the social hierarchy.
What is a good net worth by age? ›
Average net worth by age
| Age by decade | Average net worth | Median net worth |
|---|
| 20s | $99,272 | $6,980 |
| 30s | $277,788 | $34,691 |
| 40s | $713,796 | $126,881 |
| 50s | $1,310,775 | $292,085 |
4 more rowsIn 2021, the median household income is roughly $68,000. An upper class income is usually considered at least 50% higher than the median household income. Therefore, an upper class income in America is $100,000 and higher. However, an upper class income also depends on where you live.
Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131. Upper class: The top 20% of earners, with household incomes of $149,132 or more.
What salary is considered upper class for a single person? ›
Upper middle class: Anyone with earnings in the 60th to 80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $89,745 and $149,131. Upper class: Finally, the upper class is the top 20% of earners and they have incomes of $149,132 or higher.
What income is the upper middle class in 2024? ›
Middle Class Income Ranges in U.S. States
| Rank | State | Upper bound on middle class income |
|---|
| 5 | California | $183,102 |
| 6 | Washington | $182,612 |
| 7 | New Hampshire | $179,984 |
| 8 | Colorado | $178,604 |
11 more rowsApr 24, 2024
The upper-middle class is distinguished by having a higher level of income and wealth compared to the middle class. They often have advanced degrees, larger homes and access to more resources and opportunities.”
Are doctors upper class? ›
The lower middle class is often made up of less educated people with lower incomes, such as managers, small business owners, teachers, and secretaries. The upper middle class is often made up of highly educated business and professional people with high incomes, such as doctors, lawyers, stockbrokers, and CEOs.
What is the net worth of the top 5%? ›
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
Is 1.5 million net worth good? ›
A high-net-worth individual is a person with at least $1 million in liquid financial assets. An ultra-high-net-worth individual has a net worth of more than $30 million.
What should my net worth be based on income? ›
A common rule of thumb for determining what your net worth should be at any given age is to divide your age by 10, then multiple that by your gross annual income.
Is 4 million net worth rich? ›
According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia.
Is your net worth more than your income? ›
You've learned that income is what you earn from working and net worth is the value of your personal assets minus any debt. Now you should be able to crunch some numbers to determine where you stand financially. Are you making a great salary but have nothing to show for it?
