Your net worth is like a scorecard of how you’re doing financially. Consistently moving in a positive direction means you’re making solid progress toward becoming financially independent and toward retirement.
Calculating your net worth is simple. You add up all of your financial assets — checking accounts, savings accounts, investments, your home value, and any other property. Then, you subtract any financial liabilities — your mortgage balance, student loans, credit card debt, or anything else you owe.
If you consistently save more than you spend, you’ll see your net worth increase over time. Establishing that habit will ensure you don’t reach retirement without anything to show for your long career.
Steady progress toward a higher net worth is an accomplishment unto itself. But if you want a big benchmark to aim for, you might want to know the net worth that puts someone in the top 5% of households. A high net worth is often (but not always) tied to a high income, so seeing what the top 5% of earners in each age group brings home could also help you gauge where you stand and how you’re doing for your income level.
Adam Levy | Yahoo Finance