Image source: Getty Images

You may be aware of how much money you have in your savings account. But do you know what your net worth amounts to? That’s a harder number to come by.

Your net worth is the difference between your assets and liabilities. As a very simple example, if you have $10,000 in savings and owe $2,000 on your credit cards, your net worth would be $8,000. That’s assuming you don’t own or owe anything else.

Now that you know (roughly) how to calculate net worth, you may be eager to see what yours is. And you may also wonder how your net worth compares to the typical American’s.

There’s data from the Federal Reserve to give you an answer. And it might surprise you.

The average net worth is pretty high, but there’s more to the story

As of 2022, the average American family’s net worth was $1,063,700. But if your net worth is nowhere close to that amount, don’t panic.

First of all, it may be that you’re on the younger side and haven’t had time to build up a lot of assets yet. But also, you should know that while the average U.S. family’s net worth is over $1 million, the median net worth as of 2022 was $192,900.

What this tells us is that $192,000 is more representative of American families as a whole. The reason the average net worth is so much higher is that a small percentage of very wealthy families is probably skewing that number upward.

How to increase your net worth

If you’re not super pleased with your net worth, here’s some good news. With the right strategy, you can grow it over time.

And that strategy is a pretty simple one: Avoid debt as much as possible, and invest in assets that can gain value over time.

In this first regard, aim to steer clear of credit card debt, since it can cost you a lot of interest. If you’re going to take on debt, do so in a manner that helps your net worth, like signing a mortgage to buy a house. If you borrow $200,000 to finance a home that costs $250,000, in 20 years, that same property could be worth $500,000 or more.

Another asset it pays to invest in is stocks. Over the past 50 years, the stock market’s average annual return (as measured by the S&P 500) has been 10%, accounting for years of solid gains as well as downturns.

If you have $10,000 to put into a stock portfolio today and you leave it alone for 30 years, at that same return, you’re looking at growing your initial investment to almost $175,000. So if you like the sound of that, open a brokerage account as soon as possible so you can put your money to work for you.

Whether your net worth is something you think about often or hardly at all, the right approach could help it grow quite a bit over time. So if your net worth is lower than the typical American’s, don’t let it get you down. Instead, do your best to live below your means, keep your debts to a minimum, and invest the rest.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.