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.
FAQs
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 makes you upper middle class? ›
The top 10% of earners have an average net worth of $2.65 million. Even if you're squeaking into the upper class (the 80-90% range), you're looking at about $793,000. Moving down to the middle class, things get a bit more varied. The upper-middle class folks have an average net worth of around $300,800.
How rich do you have to be to be upper class? ›
To reach the upper class in 2024, you'd typically need an income exceeding $153,000 – more than double the national median.
What rank is $2 million net worth? ›
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
What is a respectable net worth? ›
People in their 20s and 30s should target net worth of $100,000 to $300,000. A net worth of $1 million or more should be the goal in your 40s and beyond. A seven-figure net worth is usually necessary to ensure a comfortable retirement.
How many people have $2000000 in savings? ›
According to estimates based on the Federal Reserve Survey of Consumer Finances, a mere 3.2% of retirees have over $1 million in their retirement accounts. The number of those with $2 million or more is even smaller, falling somewhere between this 3.2% and the 0.1% who have $5 million or more saved.
What is the top 5% net worth in the US? ›
According to recent data from the Federal Reserve, a net worth of at least $3,795,000 places you among the coveted top 5% of U.S. households.
What salary is considered high net worth? ›
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
What salary is upper middle class? ›
You also need an annual household salary of at least $50,000 to be considered middle class in 17 other states, including California, New York, Oregon, Washington, Utah and Hawaii. In California, the difference is $122,000, from a salary of $61,028 on the lower end to $183,102 on the upper end.
What is the cut off for upper class income? ›
Upper-middle class: $94,001 – $153,000. Upper class: greater than $153,000.
If you make between $30,001 to $58,020, you are in the second quintile and are in the lower middle class. If your earnings are $30,000 or under, you're in the lowest quintile and would typically be considered to be in the lower class based on your income.
What net worth puts you in the top 1%? ›
In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd. As of the end of 2023, this ultra-high net worth population is on the rise, reaching 626,000 globally, up from just over 600,000 a year earlier.
Does net worth include home? ›
Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).
How many people have $3000000 in savings in the USA? ›
There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.
What salary is considered upper middle class? ›
You also need an annual household salary of at least $50,000 to be considered middle class in 17 other states, including California, New York, Oregon, Washington, Utah and Hawaii. In California, the difference is $122,000, from a salary of $61,028 on the lower end to $183,102 on the upper end.
What is top 5% wealth net worth in the US? ›
Top 5% Threshold: This tier is a significant milestone, with a net worth requirement exceeding $3.8 million. This signifies financial accomplishment achieved through strategic planning and diligent wealth management.
What net worth is considered ultra rich? ›
A high-net-worth individual (HNWI) is a person with typically at least $1 million in liquid financial assets. An ultra-high-net-worth individual has a net worth of more than $30 million.
What net worth is considered elite? ›
While there's no legal standard when it comes to defining who is an ultra-high-net-worth individual (UHNWI), they're often defined as those who have $30 million or more in assets. These funds must be in investable assets, which is an important distinction to make.
