Here is the average net worth of 35 to 44 year olds
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The average American has $ 90,460 in debt, but the average net worth is $ 748,800.
Of course, averages can be skewed by extremes at both ends of the net worth spectrum. Many feeling the economic pressure during the pandemic and the resulting recession (not to mention the growing wealth gap), most people don’t have that kind of money in their savings and investment accounts.
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However, it is still important to know your net worth so you can plan ahead for a healthy retirement and control your debt repayments and your daily budget.
Equity – or the total amount of assets you have in your name, minus debt – tends to increase with age. Higher incomes provide more opportunities to buy goods and other assets that can increase in value over time and help people build wealth.
But there are other facts that impact net worth, such as income level, employment status, cost of living, and financial inheritances.
According to the Fed, the median net worth of people aged 35 to 44 is $ 91,300. The average is $ 436,200. (Economists say that by looking the median is a better indicator of where most Americans fall on the net worth spectrum.)
Here’s a breakdown of median and average US net worth by age, according to the latest Fed report Survey of Consumer Finances from 2019.
There are two ways to increase your net worth: 1) by increasing your income and how much you save / invest 2) by reducing your debt. The two factors work together because you can’t pay off your debt without income, and some might argue that you need certain types of debt (eg student loans) to make more money.
By the time you’re in your 30s and 40s, you probably know how much debt you have in your name. Millennials average about $ 78,396 in debt, between credit cards, installment loans and mortgages. Baby boomers, by comparison, earn an average of $ 135,841. (See the average US debt by age.)
While debt is common, it’s also important to borrow strategically. When you have more debt than total assets, your net worth can dip into the negative. And even borrowing smaller amounts can delay your ability to accumulate money and invest your money meaningfully, whether in the stock market or the real estate market.
If you haven’t already, plug your numbers into a budgeting app designed to help you manage long-term wealth building, like Personal capital. This will allow you to track your net worth in real time as you pay off debt and invest more. Experts say you should have 10 times your income saved according to retirement age, which is easier to do when you can see all your debt and savings in one place.
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Then move from short-term planning to longer-term thinking. If you’ve made minimum payments on your debts, calculate the numbers to see if you can afford to pay them off faster. Calculate how much you would save over time in interest and how much your net worth would increase if you did.
It makes sense to be aggressive with paying down debt when you have a high interest rate and / or don’t earn any kind of capital or profit in return (such as when you have a mortgage on a house that takes value ). Some financial experts support It’s okay to take your time with low interest debt below 5% APR, but you should consider doubling the high interest debt that costs you more when you keep a balance.
You might work out the numbers and find that before you can seriously build wealth, you need to increase your income. If so, consider negotiating a raise, starting a side business, or finding ways to generate passive income through investing or real estate so you have a little more discretionary income to work with.
You may not reach your dream net worth overnight, but with a little planning you can make incremental progress that over time adds up.
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of Select’s editorial staff and have not been reviewed, endorsed or otherwise approved by any third party.