What Does Net Worth Mean
Net worth is the value of everything you own minus everything you owe. It includes cash, investments, real estate, and retirement accounts, minus debts like mortgages, loans, and credit cards. A positive net worth means assets exceed liabilities, while a negative net worth means debts outweigh assets.
How Net Worth Compares to Peers
Comparing your net worth to peers means looking at people with similar age, income, education, or location. Peer groups help show whether you are above or below typical levels for your situation. Federal Reserve data and surveys often report median and average net worth by age and household type, giving a general benchmark.
Why Net Worth Comparisons Matter
Looking at net worth versus peers can highlight strengths and gaps in your financial plan. It helps set realistic goals and track progress over time. Keep in mind that averages can be skewed by a few very wealthy households, so medians often give a clearer picture of typical net worth.
For broader context on wealth distribution, see Federal Reserve Notes on Wealth Distribution.
