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Average Net Worth Values

Written by Nickel - 31 Comments

Every three years, the Federal Reserve surveys a random sampling of American families about their finances and then publishes the results in the form of their Survey of Consumer Finances. The last of these was published awhile back, and was based on data from 2004. Thus, the 2007 version should be just around the corner. Despite being a bit out of date, the 2004 data are still pretty interesting to look at.

What follows are some interesting tidbits from 2004…

For starters, the overall median (mean) net worth value was $93,100 ($448,200).

Broken down by the age of the head of household:

Under 35 years old = $14,200 ($73,500)
35-44 years old = $69,400 ($299,200)
45-54 years old = $144,700 ($542,700)
55-64 years old = $248,700 ($843,800)
65-74 years old = $190,100 ($690,900)
Over 75 years old = $163,100 ($528,100)

Broken down by the education level of the head of household:

No high school diploma = $20,600 ($136,500)
High school diploma = $68,700 ($196,800)
Some college = $69,300 ($308,600)
College degree = $226,100 ($851,300)

Broken down by working status:

Working for someone else = $67,200 ($268,500)
Self-employed = $335,600 ($1,423,200)
Retired = $139,800 ($469,000)
Other, not working = $11,800 ($162,300)

Broken down by region:

Northeast = $161,700 ($569,100)
Midwest = $115,000 ($436,100)
South = $63,800 ($348,000)
West = $94,800 ($523,700)

Finally, broken down by housing status:

Owner = $184,400 ($624,900)
Renter or other = $4,000 ($54,100)

So… How do you stack up?

See also: Lessons Learned From Average Net Worth Values

Published on February 5th, 2008
Modified on February 6th, 2008 - 31 Comments
Filed under: Miscellany

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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31 Responses to “Average Net Worth Values”

  1. 1
    SingleGuyMoney Says:

    Once the new report comes out, it will be interesting to see the numbers for the homeowners vs. renters.

  2. 2
    JRich Says:

    If interested, here is where you can sign up to get ontified when the 2007 one is out, which is supposed to be in a month or so.

    http://www.federalreserve.gov/.....index.html

  3. 3
    Solitude Says:

    That *really* surprises me. I thought I was doing pretty well, but I’m barely at the median for under 35s, much less the mean. I thought at least some of these categories would be negative …

  4. 4
    nickel Says:

    Solitude: Keep in mind that this includes home value, and it’s also 3 years old so the real estate numbers might be inflating things (not sure if you’re an owner or renter, or if you include home value in your calculations).

  5. 5
    KC Says:

    Very interesting – especially the renter vs. owner – course you could argue more renters are younger.

    I’m 34, with a 35 yr old husband – so I’m way ahead of $73k net worth, but he’s behind ($300k) – HA!

    We are way behind the college degree people, the self-employed, southerners, and home owners! We’ve got some work to do!!

  6. 6
    Ria Rhodes Says:

    What got my attention from the 2004 U.S. Survey of Consumer Finances, was in the summation here:

    Overall, asset ownership and debt use increased in both prevalence and amount. The net effect was an increase in the proportion of families’ assets offset by debts—from about 12 percent in 2001 to 15 percent in 2004. The most important factor in the increase was a rise in the amount of debt associated with residential real estate. The amount of other types of debt also rose.

    ..most of us understand that consumer debt has increased since 2004, and who doesn’t know what has happened in the housing sector? Forget the technical jargon and political spin to ‘are we, are we not’ – it’s a r-e-c-e-s-s-i-o-n that i-s at our doorsteps now.

  7. 7
    Randy Says:

    Quick questions. Do you include your life insurance policy in your net worth? I have a company provided policy that I will keep if I ever leave the company. My wife also has a smaller policy that was purchased at birth and was just handed over to her paid in full. Do you count these amounts in your net worth statement?

  8. 8
    Solitude Says:

    Nickel: I’m a renter, and I’m only 26. Maybe I’m not clear on how calculating the home value works…seems like if you bought a house for $200,000 and you have paid $100,000 of it, your net worth would be $100,000–value of house ($200,000) minus the debt on the house ($100,000)? (That of course doesn’t take interest into account.)

  9. 9
    Danielle Says:

    A breakdown of the education level AND age would have been most helpful. In the under 35 category I would imagine for many of us College Debt affects the equation.

    We are on track to get past that mean by the time we are 35. I was hoping we would be better off than those 2004 numbers, but it is what it is.

  10. 10
    Randy Says:

    The more I look at these numbers the more I believe that inflated home prices are making up these net worths. It will be very interesting to see the 2007 numbers. All I hear about is the negative savings rate and the huge credit card debt yet to look at this data it paints a whole different picture.

  11. 11
    nickel Says:

    Randy: That’s a potentially complex question. Does your life insurance have any cash value? Or is it a term policy? If it’s a term policy (without any investment value) then it doesn’t get counted.

    Solitude: Home value is factored in as (Value of house – what you owe on it). Arguably, you should probably also factor in realtor commissions, which would make it more like ((Value of house – 6%) – what you owe on it). Interest doesn’t come into play because how much you’ve paid so far doesn’t translate into cash value.

    Think of it this way… If someone sells their house and uses the proceeds to pay off their mortgage(s), how much money would they have left over? That amount gets added to net worth.

  12. 12
    nickel Says:

    Danielle: Yes, I think that sort of breakdown would be fantastic, but I haven’t been able to find it.

    Randy: I agree that it will be very interesting to see the 2007 numbers when they are available. I, too, suspect that these numbers are overblown given the runup in the real estate market.

  13. 13
    Catrijn Says:

    I’m ahead of the median and behind the mean in two of ‘my’ categories (under 35 and renter), and way behind in the rest. It’s not really surprising, since age is such a strong variable when looking at net worth.

    What’s really noticeable to me is the degree of skew in the numbers – the difference between the mean and the median. It’s seems fairly large, and it’d be interesting to see historical trends on that.

  14. 14
    Joshua Says:

    Well, I’m so far behind. I recently figured out my net worth and if I was reasonably accurate, my net worth is around -$25,000.00 I’m worthless.

  15. 15
    g Says:

    The stark differences in the mean and median show a terrible picture of the class system in America. The median is much lower than the mean. Which says there is basically the ‘haves’ and ‘have-nots’; a bunch of poor people (50% of the population below the median) and some pretty-damn wealthy people to bring the mean (average) up so high. Wasn’t there a historical mantra of, “workingmen of the world, unite?” At the very least, reverse the tax-cuts to the wealthy – go back to the pre-Reagan days.

  16. 16
    Ron@TheWisdomJournal Says:

    People have a tendency to overestimate the value of their assets and underestimate the value of their liabilities when asked.

    I wouldn’t put too much stock in this poll. It doesn’t do you any good to compare yourself to others. Compare yourself to where you were 1, 2, 3, or 5 years ago.

  17. 17
    KC Says:

    Ron is right – if this poll is just a flat out question with multiple choice answers people would not get it right. You really have to sit down with a calculator and maybe some documents to figure your net worth. For instance you need the tax appraisal on your home (or atleast recent sale prices of similar homes in your neighborhood) to figure out its vale.

    Don’t shortchange your self when figuring out your net worth. If you have a home and its appreciated then that is value (minus what you still owe the bank). Your cars have value, your furniture, stuff in your home like silver, a collection you might have, your wardrobe…these things may not have large inherent value, but they account for something.

    Also include any retirement accounts (Roth, IRA, 401k, pension) and savings or investment accounts, too. I was actually surprised the first time I added up my net worth. It was far more than I expected.

  18. 18
    nickel Says:

    True enough, but these sorts of biases should apply across the dataset as a whole, so you can still learn quite a bit by breaking the data down into categories and making relative comparisons (e.g., home owners vs. renters, self-employed vs. employees, etc).

  19. 19
    Danielle Says:

    When calculating net worth I include reasonable values for assets like our home, vehicles and jewelery. I plan to update them every year or 2 (or if we sell/damage something) as they change in value. I also update my debt numbers each time I make a payment. Having an accurate count of these things really helps you put your financial situation in perspective.

    Joshua:
    I assume the word “household” is indiscriminate between those who are married or living with a partner and those who are living alone, but that also can have an affect on where you fall on this scale. Either of our individual net worth numbers would have looked worse on this scale than my husband and my joint number.

    “The stark differences in the mean and median show a terrible picture of the class system in America.”

    g – This is something most of us realize when we bother to think about it. I’m glad someone else noticed that as one of the conclusions that can be drawn from this data. Looking further back in the data it would be interesting to see at what point in history that happened or if it has always been so. I suspect it has always been so in America.

  20. 20
    g Says:

    Danielle et al. mean vs. mode – measure of ‘new’, unlike the historical past, class division:

    I looked at older survey data to compare the mean vs. mode (source: http://www.federalreserve.gov/.....home.html)

    2004 median = 21% mean (93,100/448,200)
    1982 median = 74% mean (19,446/26,259)
    1976 median = 80% mean (13,549/16,893)
    1960 median = 83% mean (8,690/10,420)

    So there is a stark difference in the recent future. It is my opinion that the tax cuts of Reagan is the cause; high marginal tax rates created a disincentive for the wealthy to PAY (not earn) themselves more. With low marginal tax rates, the CEOs and upper management pay themselves more at the expenses of the masses (lower pay, less health insurance, fewer pensions, etc). So we are at the future: A large fraction of the US feels disenfranchised, live payday-to-payday while a small fraction live amazingly well. It was the best of times, it was the worst of times. . .

    We need a more progressive tax system – just like even the ‘conservative’ Adam Smith (the ‘hero’ of laissez-faire GOPs) stated in, “Wealth of Nations.”

  21. 21
    nickel Says:

    g: Very interesting, though I’m assuming that you meant median as opposed to mode (since the 2004 numbers are identical to mean and median that I presented above).

  22. 22
    Danielle Says:

    I think that a number of factors come into play here, including ease of obtaining and abusing consumer credit. I know that puts a dent in my own net worth!

    g – Thanks for doing that data collection, I didn’t have the time for it when I posted!

    Good thoughtful blog, I’m going to read the follow on post now.

  23. 23
    Jason Unger Says:

    I’m 24, so even though I fit in the “under 35″ category, that’s still 11 years up on me. But I’m working on getting there…

  24. 24
    kitty Says:

    g. it is interesting, but I think you are oversimplifying.

    As Danielle said, credit wasn’t as readily available in 1980s, but this is only one issue and not the biggest ones.

    Health care costs increased significantly since that time with increases outpacing inflation. This made it a whole lot more expensive for companies to offer generous health plans. Same with college costs. A lot of young people graduate right now with huge debt that affects their net worth for many years to come. Reagan reforms had nothing to do with either.

    The competition with workers abroad as with foreign products affected fewer areas. Again, this pressured companies to reduce costs.

    Additionally, your timing is wrong. If what you said is true and Reagan reforms resulted in disappearing of pensions, we’d have seen pensions disappearing in late-80s when in fact this started to happen in late-90s – early 2000s. Similarly, companies started reducing health care benefits in late 90s.

    Early 80s was a time of 2-digit inflation; I am not that sure that poor had it better then. Reducing taxes on the wealthy was one of the factors that actually helped get out of this inflation and stimulated economic growth. Ridiculously high tax rate on the wealthy simply causes them to hide more income from taxes; it also stifles the ecomony.

    What you seem to be advocating is redistribution of wealth – let’s steal from the rich and give to the poor. It’s been tried before in the Soviet Union (where I grew up, so I have personal experience) and it didn’t work. Everyone ended up poor.

  25. 25
    Jason Says:

    I’m 31 yrsld, renting, with a net worth (after yesterdays stock market crash) of $170,000 if you include retirement accounts and $107,000 if you do not.

    I share the surprise of many posters about the extreme difference between median and mean net worth. So many trust fund kids sitting on millions of shares of stock, paying 10% or 15% capital gains on their quarterly dividends while I pay 40% taxes on my income. IT ISN”T FAIR!!!! RICH BASTARDS!!!

    I’ve made all of my money working my ass off while they vacation.

  26. 26
    anonymous Says:

    They didn’t sort the data by gender or race? Why not?

  27. 27
    nickel Says:

    anonymous: These are household numbers. Most households have members of both sexes. Likewise, many households have more than one race. Thus, it’s not really possible to break the numbers down that way.

  28. 28
    Mike Says:

    I know it seems this blog has pretty much died (considering the last post was in October of last year).

    However, if anyone is still reading/responding to it…should my 401k balance be included in my net worth. I know there are some individuals that do not have a 401k but do have a pension (my company does not provide a pension). Do those individuals include the value of their pension in their net worth? Do they even know the current value of their pension to be able to include it?

    I guess this question again leads to the value of net worth statistics.

    Anyway, I wish everyone good luck. We are all in for a rocky road over the next year or two. Here’s hoping we all come out of it okay…or Better:-)

  29. 29
    nickel Says:

    Mike: Your 401k is *your* money so yes, you should include it in your net worth calculations. As for this blog having died, while this particular article hasn’t been commented on in quite some time, the site as a whole is alive and kicking. Be sure to poke around and check it out.

  30. 30
    Anthony Martin Says:

    I’ve been trying to figure out what the numbers really mean, because if, say around 10% or so of the population ‘owns’ 80% or so of the total wealth’, then to get the median net worth for the ‘average person’ (i.e. not super rich’), and a more accurate picture, (i.e. there are two economic classes in the USA) wouldn’t the calculation have to be made using 20% of the total net worth over 90% of the population?

  31. 31
    JimVan Says:

    Re the historical median/mean for 1960-1982 stats in g’s post. These are from the Federal Reserve’s Survey of Consumer Finance, 1983. The new URL is: http://www.federalreserve.gov/.....ll0984.pdf
    These figures are from Table 1 on the second page of the report. They are actually the figures for median/mean family income, not net worth, and the first figures are for 1969 not 1960. A second report for that year, Federal Reserve’s Survey of Consumer Finance, 1983: A Second Report:(http://www.federalreserve.gov/pubs/oss/oss2/83/bull1284.pdf)
    They have figure for 3 years (Table 5, p.6):
    1970 median = 32% of mean (7,189/22,154)
    1977 median = 41% of mean (12,656/31,039)
    1983 median = 37% of mean (24,574/66,050)

    In 1989 after 8 years of Reaganomics:
    1989 median = 25% of mean (75,500/299,400 in 2007 $)

    From there they headed into the low 20s and never recovered. g’s conclusions still stand. It is also interesting that the table in the 1983 report is “Distribution of families by net worth.” The 2007 report table is labeled “Median/Mean value of net worth for families with holdings.” This may not reflect a change, but it appears that at some point the feds began to exclude families with negative net worth from the stats.

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