What is net worth?

Net worth is assets minus debts. Cash, investments, retirement accounts, and home value count on one side. Mortgages, student loans, and card balances count on the other. Income does not.

Arc · Published September 18, 2026 · Updated September 18, 2026

Use current balances, not what you paid. A house at purchase price and a brokerage account at cost will both lie. Update the values you actually could realize, and be honest that a primary home is not cash.

Net worth = assets − debts

Why it matters more than salary

Salary is a flow. Net worth is the stock of wealth that flow has built, after spending and after debt. Two people with the same paycheck can be a decade apart if one has been saving and the other has been financing a lifestyle.

That does not make net worth a virtue score. A doctor at 32 with student loans can have a negative net worth and a solid plan. The statement is a starting point.

Average versus median

Averages of net worth are pulled up by very wealthy households. The median, the middle household, is usually the better “typical” number. Arc’s age tables show SCF percentiles, including the median. This extract does not include a mean, and we do not invent one.

Common questions

Should I include my house?

Yes, in net worth, at a realistic value, net of the mortgage. No, in a FIRE number, unless you will sell it or otherwise turn it into spending money.

Sources

Board of Governors of the Federal Reserve System. Survey of Consumer Finances, 2022. Dollar figures on Arc benchmark pages are inflated to July 2026 dollars with BLS CPI-U.