You must’ve heard and probably kept tabs on your favorite celebrities’ net worth for the longest time. Have you ever wondered about yours and where it stands compared to your peers?
Your net worth is the combination of your assets minus your liabilities. It is essential to know your net worth as it gives you a clear picture of where you stand financially. If you’re not doing well, there are best ways to increase your worth.
Average Net Worth By Age
The United States Census polls Americans annually and questions them about their lifestyle. It is to gather personal data along with statistical and demographic information.
They have broken down the average net worth by age:
- 35 years or less – $6,936
- 35 – 44 years – $45,740
- 45 – 54 years – $100,404
- 55 – to 64 years – $164,498
- 65 – 69 years – $193,833
- 70 – 74 years – $225,390
- 75 or older – $197,758
Key findings:
- Americans 70 plus have thirty times more net worth than millennials.
- As soon as you hit 35-44 years of age, your net worth doubles.
- 75 years or older Americans have seen their net worth go down, the primary reason being retirement.
Millennials’ net worth is based on the following:
- Savings habits
- Annual salary
- Student loan debt
Most millennials’ net worth is negative due to their student loan debt. However, it goes up when they graduate.
Three Best Ways to Increase Your Net Worth
These three best ways are not for people who are avid spenders and are non-serious about their goals for the future. These ways require planning and focus.
Paying Off Your Debts
Debt is one of the biggest worries and hurdles to becoming wealthy. Whatever debt you’ve been a student loan, mortgage, or credit card, you need to work on getting rid of it and then move towards saving and increasing your net worth.
It’s a step-by-step process that requires daily commitment and patience:
- Calculate the total debt you have.
- Decide on what needs to be paid first.
- Avoid taking on more debt and eliminate all kinds of temptation.
- Work on getting a lower interest rate.
- Plan on how you’re going to pay off your debt.
Investing In the Right Places
Everyone wants to see their net worth increase as they age, and investing is the best way to do that. It is crucial to invest in the right places and wisely.
- 401k: this is one of the most solid investment accounts your employer will offer you to invest pre-tax earnings for your retirement. The best part is that your company manages it.
- Debt: your debt needs to be reduced or eliminated to as much as possible before saving and investing.
- Roth IRA: when you contribute to your 401k and have eliminated your debt, it is the best time to invest in a Roth IRA.