Editorial note: This article is for informational and educational purposes only and does not constitute financial advice. Individual net worth outcomes vary significantly based on personal circumstances. Consult a qualified financial professional before making investment or financial planning decisions.
Net worth is what you own minus what you owe. Add up every asset, add up every debt, and subtract the second number from the first. That is the entire calculation. The Federal Reserve's Survey of Consumer Finances (SCF), the most detailed household wealth survey in the country, uses this exact definition, and it is the same definition this site uses for every person and household we cover.
Want your own number instead of a national average? Use our free Personal Net Worth Calculator to add up your assets and debts in a few minutes.
What net worth means
Net worth is a snapshot, not an income figure. It is measured at one moment in time, the way a photograph captures a single instant rather than a video of everything that happened before it. A high income does not automatically produce a high net worth, and a modest income does not rule one out. What matters is the gap between assets and liabilities on a specific date.
The SCF defines assets and liabilities in specific categories, and using the same categories keeps a personal calculation consistent with the national data. On the asset side: transaction accounts (checking, savings, money market), certificates of deposit and directly held bonds and stocks, retirement accounts (401(k), 403(b), IRA), cash-value life insurance, vehicles, your primary residence, other real estate, and business equity. Notably excluded: Social Security benefits and defined-benefit pension income streams, because neither can be assigned a reliable present-day dollar value.
On the liability side: mortgages and home equity lines of credit, other lines of credit, installment loans such as student loans and auto loans, and credit card balances. Every dollar you owe reduces net worth by that dollar, regardless of what the debt originally paid for.
The net worth formula, with a worked example
The formula is short:
Net worth = Total assets − Total liabilities
Here is what that looks like for a realistic household: a couple in their late thirties with a house, a retirement account, a car, and the debts that typically come with all three.
| Assets | Value |
|---|---|
| Home (current market value) | $420,000 |
| 401(k) balance | $85,000 |
| Checking and savings | $12,000 |
| Car (market value) | $18,000 |
| Total assets | $535,000 |
| Liabilities | Balance |
|---|---|
| Mortgage balance | $310,000 |
| Student loan | $22,000 |
| Credit card balance | $4,500 |
| Total liabilities | $336,500 |
$535,000 in assets minus $336,500 in liabilities leaves a net worth of $198,500. That is every dollar in the calculation, and it moves every time a balance changes: the mortgage gets paid down, the 401(k) grows or drops with the market, the home's market value shifts. For the full walkthrough of building this yourself, see our step-by-step guide to calculating net worth.
Liquid net worth vs. total net worth
Total net worth counts everything: home equity, retirement accounts, business equity, vehicles, all of it. Liquid net worth counts only what could reasonably be converted to cash within a short window, without a penalty or a fire sale. That generally means checking and savings balances, taxable brokerage accounts, and similar holdings.
In the example above, the $535,000 in assets is mostly illiquid. The home ($420,000) takes months to sell and carries transaction costs. The 401(k) ($85,000) triggers taxes and often a penalty if withdrawn before retirement age. Only the $12,000 in checking and savings, and possibly the car, count as liquid. A household can have a healthy total net worth and still be cash-poor if an emergency shows up, which is why liquid net worth is a more useful number for near-term financial security and total net worth is the better number for long-term wealth tracking.
Median vs. mean, and why the mean runs 5x the median
The Federal Reserve's 2022 Survey of Consumer Finances puts median U.S. household net worth at $192,900 and mean net worth at $1,063,700. The mean is more than five times the median, and that gap is the single most important thing to understand about how wealth is distributed in the United States.
Median is the middle value: line up every household from lowest to highest net worth, and the median is the one standing exactly in the center. Half of households have more, half have less. Mean is the mathematical average: add up every household's net worth and divide by the number of households. A relatively small number of extremely wealthy households pulls that average far above what a typical household actually holds, the same way a handful of billionaires in a room of a thousand people would drag the room's "average" net worth into the tens of millions without changing what anyone in the room actually has in their bank account.
When a headline cites "average net worth," it is almost always citing the mean, and that number describes wealth concentration more than it describes anyone's actual balance sheet. Median is the more honest answer to "what does a typical household have." Our average net worth by age breakdown carries both figures across every age group so you can see how the gap changes over a lifetime.
Net worth in the United States right now
All figures below come from the Federal Reserve's 2022 Survey of Consumer Finances, Table 2, the most recent published wave. The next survey, fielded through 2025, is expected to publish results in late 2026.
| Group | Median net worth | Mean net worth |
|---|---|---|
| All U.S. families | $192,900 | $1,063,700 |
| Homeowners | $396,200 | $1,530,900 |
| Renters | $10,400 | $154,900 |
The owner-renter gap is the widest split in the whole dataset. Homeowners carry a median net worth roughly 38 times higher than renters, driven almost entirely by home equity, which is the largest single asset for most American households. That gap says more about how long someone has owned a home than about anything else in their financial life. For the full breakdown by age group instead of housing status, see average net worth by age.
How celebrity net worth is estimated differently
Everything above comes from survey respondents who answered detailed questions about their own finances, under a promise of anonymity, for a government study. That approach does not work for public figures. Nobody surveys a movie star or a YouTuber about their bank balance, and nobody has access to it if they tried.
Instead, celebrity net worth has to be built from the outside: disclosed contract terms, court filings, real estate records, sponsorship deals, union scale rates, and public company filings where they exist, compounded year over year into a running model. It is closer to reverse-engineering a balance sheet from public evidence than reading one off a survey form. We explain the full process, including where the estimates get shakier, in how we calculate celebrity net worth, and the exact rate tables live on our methodology page. You can see the model working across a full career on pages like MrBeast's net worth and Leonardo DiCaprio's net worth, both built year by year from documented income rather than a single quoted figure.
Curious where your own net worth ranks against other Americans? Use our free Net Worth Percentile Calculator to find your percentile for your age group and nationally.
Frequently Asked Questions
What is net worth?
Net worth is what you own minus what you owe: total assets minus total liabilities, measured at a single point in time. The Federal Reserve's Survey of Consumer Finances uses this exact definition for its household wealth data. It is a snapshot, not an income figure, and it can be negative if debts exceed assets.
What is the formula for net worth?
Net worth equals total assets minus total liabilities. Assets include cash, bank accounts, retirement accounts, investments, real estate, vehicles, and business equity. Liabilities include mortgages, student loans, auto loans, and credit card balances. Add up everything you own, add up everything you owe, and subtract the second number from the first.
What counts as an asset when calculating net worth?
The Federal Reserve's SCF counts checking and savings accounts, CDs, stocks and bonds, retirement accounts like 401(k)s and IRAs, cash-value life insurance, vehicles, your primary residence, other real estate, and business equity as assets. It excludes Social Security and defined-benefit pension income streams because those cannot be assigned a reliable present-day value.
What counts as a liability?
Liabilities are debt secured by your home (mortgages and home equity lines of credit), other lines of credit, installment loans such as student loans and auto loans, and credit card balances. Anything you owe money on reduces net worth by the outstanding balance, regardless of what the loan was used to buy.
Why is average net worth so much higher than median net worth?
The U.S. mean household net worth was $1,063,700 in 2022 while the median was $192,900, according to the Federal Reserve's Survey of Consumer Finances. The mean is pulled upward by a relatively small number of very wealthy households. The median, the point where half of households have more and half have less, better reflects a typical household.
How is celebrity net worth calculated differently?
Celebrities and public figures do not appear in Federal Reserve survey data, and nobody has access to their bank statements. Their net worth has to be modeled from disclosed contracts, public filings, real estate records, and documented deal terms, then compounded year over year. It is an estimate built from evidence, not a bank balance.