Calculating Your Net Worth
You may want to check out this nifty yet puzzling CNNMoney calculator, which ranks your net worth by age and income. Apparently, the median net worth for those between the ages of 25 and 34 is $2,125. But once you turn 35 (and on up to age 44), it jumps to $44,875. For someone with a $50,000 annual salary, the calculator spits out $109,975 for median net worth. Perhaps it's assuming that you're saving every cent.
Blogger Blueprint for Financial Prosperity also finds the calculator frustrating—"meaningless," in fact. "There are simply too many variables," he writes. "What if you're 25, married, and have two kids? What if you're 25, not married, don't have kids...is it even fair to compare the financial situation of the two 25-year-olds? No way."
The technical definition of net worth is the value of all of your assets (such as savings, investments, and home), minus your liabilities (such as credit card balances, student loans, and mortgage debt). Although you probably have a rough idea in your head, this net worth calculator will give you an actual number. It also estimates how your net worth could grow or shrink over the next 10 years.
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Reader Comments
Don'f forget the main item
CPA's require public companies to book estimated liabilities for costs to be paid in the future due to events happening now. If you're getting older (and we all ARE), it's appropriate in the concept of "net worth" to be estimating now the liability you will owe for health care of yourself prior to passing away. For most people, that is hundreds of thousands of dollars, perhaps mitigated somewhat by insurance (if they have and can KEEP their coverage---a big, big IF).
With this inclusion, most people now have a negative net worth. They just don't know it yet, and if they did, they'd be voting Democratic.
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