net worth by class

Net Worth To Be In The Lower, Middle & Upper Class In The U.S


Net worth serves as an indicator of financial well-being, reflecting the value of an individual’s assets minus liabilities. In the U.S., net worth can vary significantly across different socioeconomic classes. In this blog, I’m going to share the median net worth for America’s upper, middle, and lower classes and 5 tips to help increase your net worth and achieve your financial goals.

What is net worth?

Net worth is a measurement of wealth. It is the total of all the assets a household owns minus all the debt it owes. In simpler terms, net worth is everything that you own minus everything that you owe. Net worth can change over time as assets fluctuate and debts are paid off or accumulated.

A positive net worth indicates that an individual has more assets than liabilities. This suggests good financial health and the ability to cover any debts that they encounter. 

It is possible to have a negative net worth. A negative net worth suggests that liabilities exceed assets which may signify financial challenges. For example, think of recent college graduates with massive student loans. If you are in this situation, don’t get discouraged. Once you start building your career and investing in your 401(k), IRA, or other investment accounts, your net worth will grow over time.

How do I calculate net worth?

The formula for calculating net worth is as follows: Net Worth = Total Assets – Total Liabilities.

To calculate your net worth you simply want to list all of your assets and all of your liabilities. Here is a quick example below:

Bank Savings: $25,000
Retirement Savings: $50,000
House: $500,000
Car: $30,000

Total assets = $605,000

Mortgage = $150,000
Credit Card Balance: $3,000
Student loan: $25,000

Total liabilities = $178,000

Net Worth = $427,000

What are some typical assets and typical liabilities when calculating net worth?

  • Typical assets include cash, investments, real estate, vehicles, personal belongings, and any other valuable items.
  • Typical liabilities include debts, loans, mortgages, credit card balances, and any other financial obligations.

What is the difference between average vs median vs top 1% net worth?

Average, median, and top 1% net worth are different ways of measuring the wealth distribution within a population. There is a big difference between the average, the median, and the top 1%.  For example, the median net worth of American households is $121,700,  the average net worth of American households is $748,800,  and the top 1% net worth of American households is $11,099,166

  1. Average net worth: average net worth is calculated by summing up the net worth of individuals in a population and then dividing that number by the total number of individuals.  The average is typically skewed by a few extremely wealthy individuals. 

  2. Median net worth: Median net worth is the middle value of the ranked list of individual net worths. It is the point at which 50% of the population has a higher net worth, and 50% has a lower net worth. It is considered the most robust measure of net worth because it is less affected by extreme values. 

  3. Top 1% net worth: The top 1% net worth represents the wealthiest segment of the population. It highlights the disproportionate concentration of wealth in a small fraction of the population.

In this blog, we are going to focus on the median net worth as we believe this is the most accurate representation of how you stack up against the majority of your peers and it’s less affected by extreme outliers.

Is median net worth or median income a better indicator of wealth? 

Median income focuses specifically on the flow of money coming in and does not take into account accumulated assets or wealth such as real estate and investments. We believe that median net worth is a better representation of an individual’s financial health.

We believe in the old saying “what you make isn’t as important as what you keep.” We have seen several people who haven’t made much money but have grown their wealth over time because they spend a lot less than what they make. We have also seen people with massive incomes who spend it all rather than invest it to grow their net worth. Therefore having a large income can potentially help you speed up your net worth but at the end of the day, anyone can achieve wealth with discipline and good habits.

What is the median net worth of individuals in the lower, middle, and upper classes in America

Bottom 20%Poverty Class$6,030
Next 20%Lower-Middle Class$43,760
Middle 20%Middle Class$104,700
Next 20%Upper-Middle Class$201,800
Top 20%Wealthy$608,900
These are the 5 sections that are defined by the US Census Bureau.
The data can be found here: Wealth and Asset Ownership for Households, by Type of Asset and Selected Characteristics: 2020

Lowest 20%: Poverty class

The lowest 20% bracket is considered the poverty class. They have a median net worth of $6,030. This quintile typically represents younger individuals who have not had time to accumulate much wealth. They may have big student debt or be earning minimum wage, making it hard to save. Paycheck-to-paycheck living is common in this quintile, and upward mobility can be challenging.

However,  if you are in this quintile, take a hard look at your finances and see if there are any opportunities to increase your net worth. If any emergency comes up, you want to know that you will be able to cover that, rather than take out a high-interest loan which would decrease your net worth even more. Even if you can find $100 a month to save or invest, it can make a difference over your lifetime with the power of compounding. 

Next 20%: Lower middle class

Next up is the lower middle class who have a median net worth of $43,760.  In this quintile, we often see young families and people early on in their careers. They haven’t had enough time to accumulate much wealth but they save and invest a bit each month. 

As people begin to make more in their careers, they also begin to spend more. Most people assume that if they make a lot of money, then they have to be worth a lot of money. However, a recent survey found that 40% of those earning over $100,000 are living paycheck to paycheck, and 36% of those earning over $200,000 are living paycheck to paycheck.

If this is you, take a hard look at your finances. There may be some expenses that you can cut out or reduce. You can then use that money to grow your net worth instead. 

>> LOOKING TO ACCELERATE YOUR NET WORTH? Schedule a free discovery call with one of our fee-only financial planners to discuss how we can help you maximize your money.

Middle 20%: Middle class

The middle class has a median net worth of $104,700. The typical American tends to cross the first $100,000 threshold when they are in their forties. They have a modest sense of financial security but they are still relying on their earning potential. They may have paid off, or paid down,  the majority of their student loan and have a decent amount of home equity.

Remember – saving more than you spend is how you generate wealth.  Always live below your means.


Next 20%: Upper middle class

The upper middle class has a median net worth of $201,800. They usually have a lot more discretionary income and they can go buy things whenever they want. They may have been investing for retirement for quite a few years and are now benefiting from compound interest. They may also be able to pay for their children’s education and have the luxury to take a vacation when they choose. 


Top 20%: Wealthy

The wealthy have a median net worth of $608,900.  This typically represents older individuals. If you are a dedicated saver, you could make it into this category over your lifetime. This can bring a feeling of abundance and it also means that you can enjoy a comfortable retirement.  

Can I build wealth with compound interest?

Compound interest is one of the easiest ways to build wealth. If you are a dedicated saver, you could make it into the wealthy category by the time you retire. If you started saving $130 per month in a Roth IRA (with an average return of 7%) from the age of 20 you would have around $610,000 by the time you retire. The total amount that you would have deposited would have been around $75,000, with the remaining $535,000 coming from interest earned. You can use our Roth calculator to calculate various scenarios for yourself.

interest earned over time on roth ira growth of roth ira Roth IRA calculation

What’s the best way to increase net worth?

Increasing your net worth involves building your assets and reducing your liabilities. Here are some effective ways to boost your net worth:

  1. Maximize your retirement savings
    Many retirement savings plans may be available to you such as a Roth IRA, traditional IRA, or 401(k). A financial advisor can help you choose which plan/s may be best for you. Make sure to take advantage of any employer match.  It’s basically free money!

  2. Start investing
    Don’t let inflation eat away at your hard-earned savings. Once you have hit the maximum limits on your retirement investment accounts, you can put any extra money into a brokerage account and then choose how you want to invest that money. For example, you may want to invest in brokered CDs, T-Bills, stocks, or other asset classes. If you’re inexperienced with investing, you may want to seek advice from a fiduciary financial advisor.

    Depending on the level of risk you are willing to assume and the return you would like, they can help you select the best investments for your portfolio.

  3. Pay down high-interest debt as soon as possible
    Reduce high-interest debt and focus on paying off any outstanding loans. High-interest debt severely limits your ability to increase your net worth. The sooner you pay it off, the sooner you can use that extra money to invest in your future.

  4. Increase income
    Explore opportunities to increase your earning potential. This may include negotiating a higher salary or starting a side hustle. You should keep the same lifestyle you had before, spend within your means, and invest the extra money.

  5. Budget and save
    Every financial planner talks about budgeting and saving.  While it may sound boring, that is one of the easiest ways to increase your wealth. If you track your income and expenses, you can identify areas where you can cut back. Saving on unnecessary expenses frees up money so you can allocate a portion of your income towards savings and investments. As I demonstrated earlier, even an extra $100 a month can make a difference. Consistently saving over time allows you to accumulate wealth.

How can District Capital help me increase my net worth?

Here at District Capital, we are passionate about helping professionals and entrepreneurs in their 30s and 40s maximize their money. We can develop strategies to increase your net worth and provide personalized guidance tailored to your financial situation and goals. Increasing your net worth during your 30s and 40s is a great way to set yourself up for comfortable retirement.

Increase your net worth in 2024

Remember, increasing your net worth is a gradual process that requires discipline, patience, and informed decision-making. Regularly assess your financial progress and adjust your strategies as needed. If you’re interested in building your net worth and maximizing your money through a comprehensive financial plan, schedule a free discovery call today.

Best Financial Planner Washington DC

Alvin Carlos, CFP®, CFA is an investment advisor and fee-only financial planner, in Washington, D.C that works with clients across the country. He has a Master’s degree in International Relations from SAIS-Johns Hopkins. Alvin is a partner of District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, reducing taxes, retirement planning, and maximizing their money. Schedule a free discovery call to learn how we can help elevate your finances.


District Capital is an independent, fee-only financial planning firm. We help professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money. We are based in Washington, D.C and we work with people virtually nationwide.

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