Someone earning $120,000 a year can have a net worth of $0. Someone earning $55,000 can be building real wealth. Income is the rate at which money comes in. Net worth is whether any of it sticks.
Most financial content focuses on income — how to earn more, negotiate better, find higher-paying roles. Net worth gets less attention, which is why a lot of people spend their 20s earning more each year and somehow feeling no more financially secure.
Net worth is the number that tells you whether you're actually getting ahead.
What net worth is
Net worth = assets minus liabilities.
Assets: everything you own that has financial value. Cash, checking accounts, savings accounts, brokerage accounts, retirement accounts (401k, Roth IRA), the market value of your car, any real estate you own.
Liabilities: everything you owe. Student loans, credit card balances, car loans, mortgage balance, any other debt.
Subtract liabilities from assets. The result is your net worth. It can be negative — and for most people in their early 20s, it is, because student loan debt often exceeds early savings. A negative net worth at 23 is not a crisis. It's a starting point.
This is where the free preview ends. Subscribe to GenHedge — free — to read the full breakdown, including what net worth benchmarks actually look like at 22, 25, and 28 — and why tracking it monthly changes your financial behavior.
How to calculate yours right now
Open a note on your phone. Two columns.
Assets:
- Checking account balance: check your banking app
- Savings account balance: check your banking app
- Investment/brokerage accounts: current market value (not what you put in — what it's worth today)
- 401k balance: log in to your employer's benefits portal
- Roth IRA balance: log in to Fidelity, Schwab, or wherever it's held
- Car value: look up your make, model, year, and mileage on Kelley Blue Book. Use the private party value.
- Any other assets with clear market value
Liabilities:
- Student loan balance: log in to studentaid.gov for federal loans, your servicer's site for private
- Credit card balances: current statement balances, not limits
- Car loan balance: check your lender's app or website
- Any other debt
Subtract the total liabilities from total assets. That number is your current net worth.
This takes about 10 minutes. Most people have never done it — which means they're navigating without knowing where they're starting from.
What the numbers look like at different ages
Median net worth figures in the US by age group (Federal Reserve data, 2022):
| Age | Median Net Worth | |-----|-----------------| | Under 35 | $39,000 | | 35–44 | $135,000 | | 45–54 | $247,000 |
The under-35 figure is dragged down by people with significant student debt and limited savings early in their careers. For someone 22–28 who's actively building, a net worth of $0–$30,000 is normal. Negative net worth is common and doesn't mean you're failing.
The more useful benchmark isn't a peer comparison — it's your own trajectory. Is your net worth higher than it was three months ago? Six months ago? That direction matters more than the absolute number at 24.
The mistake that distorts the calculation
Two common errors that make net worth calculations misleading:
Counting pre-tax retirement accounts at face value. A $30,000 traditional 401k is not $30,000 in actual wealth. When you withdraw it in retirement, you'll pay income tax on it — potentially 22–24%. The real value is closer to $23,000–$24,000 after taxes. For a rough net worth calculation, this is a small enough distortion to ignore, but it matters when comparing a Roth IRA (after-tax, no tax on withdrawal) to a traditional 401k (pre-tax, taxed on withdrawal). They're not equivalent dollar for dollar.
Treating your car as a significant asset. A car depreciates. A $25,000 car purchased new loses roughly 20% of its value in the first year and 15% each subsequent year. That same car is worth about $10,000 five years later. Including it at purchase price in your net worth calculation gives you a number that quietly declines every month without you spending anything.
Use Kelley Blue Book current market value, update it once a year, and don't expect a car to contribute meaningfully to long-term net worth.
Why tracking it changes your behavior
There's something specific that happens when you calculate your net worth and watch it monthly: small decisions start to register in a way they don't when you're only watching your bank balance.
A $600 impulse purchase shows up as a $600 reduction in net worth, not just a transaction in a bank account. Paying down $500 in student loan principal shows up as $500 in net worth growth. The framing shifts money from something that flows through your accounts to something that either accumulates or doesn't. Pairing this with a monthly budget makes both numbers move in the right direction.
Most people who track net worth consistently — even informally, on a phone note once a month — report that it's the habit that changed how they spend more than any budgeting app or spending tracker. The number makes the direction visible.
Set a monthly reminder. Update it in 5 minutes. Watch the direction.
Not financial advice. Net worth benchmarks referenced from Federal Reserve Survey of Consumer Finances (2022). Individual circumstances vary.