Your net worth is calculated by subtracting all of your debts from all of your assets. If you are hopefully adding to your assets each pay period and paying down your debts each pay period, then your net worth should be on some sort of upward trajectory over time. One reference point for how well you have been accumulating your net worth is to compare to either your peers in age or income. The tables below show the median net worth values from the 2013 Federal Reserve survey.
A median number is calculated by half the people being above the number and half being below. Since these net worth values include mostly people who have little financial literacy, you may want to use them as a minimum target, and strive for a significantly higher number.
Why is net worth important? Because the more net worth and investment income you have, then the bigger the buffer and flexibility you have to withstand the unexpected financial expenses of life. There may be a time when you will be unable or unwilling to earn active income, and if you do not have a sufficient amount of income then important parts of your life will become painfully underfunded. On the upside, the old phrase “the rich get richer and the poor get poorer,” partially refers to how much you have in investments. The higher your amount of investments then the more you can leverage your personal gain from economic changes. For example, when you have a home, you can benefit from rising real estate values; when you own stocks, you can benefit from a rising stock market; etc. Sooner or later you will be seeking the option to retire from working. Building your net worth and investment income is the most certain way to make that happen.