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Net worth is one of the most important ways to measure wealth. You calculate net worth by adding up the value of all assets and subtracting all liabilities.
This is a more accurate way of telling how rich someone is than just looking at income, since income doesn’t necessarily make you wealthy if you’re spending all you have on assets that don’t hold their value.
But people who earn more money tend to have a higher net worth. This makes good sense because the more you make, the more income you can spend on assets that help you grow wealthier. One example is stocks held in a brokerage account, where they can earn returns that increase your bottom line.
Since income can affect net worth, it’s interesting to consider just how much America’s highest earners are actually worth — especially when compared with their lower-earning peers.
Here’s what the highest-earning Americans are worth
According to data from the Federal Reserve, here’s the net worth of families who are in the 90th to 100th percentile of usual income:
- Median net worth: $2,556,200 as of 2022
- Mean net worth: $6,629,600 as of 2022
This is compared with a median net worth of $14,000 and a mean net worth of $129,700 for the lowest earners with incomes in the 0 to 20th percentile of usual income. It’s also much higher than the median net worth of $159,300 and the mean net worth of $385,400 for families with income between the 40th and 59.9th percentile of usual income.
It’s not surprising that the Americans who tend to earn the most money each year have acquired many more valuable assets than the rest of the country. But the extent of the gap may come as a shock — especially when looking at mean net worth, where very wealthy individuals drive up the numbers.
Do you need to be rich to grow your net worth?
When the average person compares their own net worth to the top earners, becoming rich can start to feel like a hopeless dream.
After all, most people simply are not going to end up with over $6 million to their name, even if they save diligently and keep credit card debt to a minimum. When you only have so much income to go around and you still have basic necessities to pay for, there’s a limit to what you can do.
However, this does not mean that lower-earners and middle-income Americans can’t become financially successful over time. It may not be possible for the average person to amass $6 million, but becoming a millionaire is within reach. In fact, investing $525 per month for 30 years would leave you with around $1 million, assuming a 10% average annual return.
Now, increasing your income does make growing your net worth easier, and you should aim to do that if you can. Take the opportunity to develop your professional skills and always negotiate your salary when you get a new job or during a performance review. It’s worth the effort to try since the data does show a clear relationship between high earnings and a high net worth.
Still, don’t get discouraged by comparing your net worth to the country’s top earners — just keep working on building your own nest egg to make your own financial situation stronger.
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