Wealth varies widely in the United States, and it’s no secret that much of that wealth is concentrated at the top. Even knowing this, the amount of wealth of the richest families can be surprising.
With the Federal Reserve’s statement 2022 Consumer Finance Survey, new data is available on the net worth of families in the top 10%. Net worth is calculated by adding up a family’s assets and subtracting debts. Here is the latest data.
Net worth of the top 10%
The average net worth of the richest 10 percent of families is $3.79 million. The average net worth of the United States, on the other hand, is $192,900. This means that families in the top 10 percent have almost 20 times more money than typical U.S. families.
We have a positive note, overall net worth is increasing. At the time of the previous Survey of Consumer Finances in 2019, the median net worth in the U.S. was $141,100, an increase of 37%. This is actually a larger increase than the median net worth of the top 10%, which increased by 26% from 2019 to 2022.
In fact, all groups analyzed in the survey saw positive changes in their net worth. This includes every income group and age range. The wealthiest Americans certainly have much, much more. But anyone can increase their net worth, and that’s a good goal to set for yourself. As a general rule, if your net worth is increasing, it’s a sign that you’re doing the right things with your personal finances.
What are the keys to high net worth?
Achieving a high net worth, such as $1 million or more, is a common financial goal. While there are multiple ways to get to this point, recent survey data can give us an idea of what will work best to build net worth. Here are the common characteristics of people with higher net worth:
- They earn huge incomes. Net worth increases significantly with each income percentile. The average net worth of the bottom 20 percent is $14,000, while that of the top 10 percent is $2.56 million.
- Their education levels are higher. The average net worth of people with a college degree is $464,600. That’s four times more than high school graduates ($106,800) and 12 times more than those without a high school diploma ($38,100).
- They are homeowners. The average net worth of homeowners is $396,200, while that of renters is $10,400.
- They are older. The net worth of older Americans is rising. The average net worth of those under 35 is $39,000. For those ages 65 to 74, it goes up to $409,900.
This doesn’t mean you have to meet all these requirements to have a high net worth. It is absolutely possible to create wealth with an average income, no college education, and being a renter. But these features show some strategies that work for many Americans, so they’re worth considering.
If you’re trying to build your net worth, a great place to start is with your income. As you earn more, it becomes easier to save more. See if there are ways to advance at your current job and earn more money, or if you can increase your earnings with a new job or side hustle.
Another important factor is where you put your money. As the data shows, many people build wealth through their homes, but that’s not your only option. Investing in stocks is another way to build wealth. Even if you own a home, it’s still a good idea to buy stock. They offer excellent growth potential, with the average stock market return being around 10% per year. They are also more liquid than owning a house because you can buy and sell stocks quickly with online stock brokers.
Building your net worth ultimately depends on how much you earn and how much you spend. If you consistently save and invest a portion of your income, you will see positive results.
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