Once You Hit This Net Worth Number, You'll Be In The Top 10%

Your net worth is determined by adding up all your assets (property, savings, investments) subtracted by your liabilities (living expenses, debts, bills) and at certain stages of your life, it can be a huge indicator of your financial health. Society tends to focus on income when talking about the one-percenters. However, looking solely at income fails to take into account the previously mentioned factors that can significantly affect a person's net worth. For instance, a person who earns half as much annual income as someone else may still have a higher net worth due to no or lower debts, and ownership of appreciative assets like a home or successful investment portfolio that the other person may not.

According to SmartAsset's analysis of IRS data, to be in the top 1% of income earners in 2024, you'd need to earn $787,712. With this said, when looking at net worth, the global real estate consultancy Knight Frank reports the top 1% in America have a net worth of at least $5.8 million. But again, not every one-percenter with a net worth of $5.8 million will earn $787,712 a year. The same can be said of those in the top 10%.

Although your annual income isn't the final predictor of net worth, it can be an indication of how likely you are to raise your net worth, and there are reasons why earning $100,000 almost guarantees your net worth will rise. With the top 10% of income earners in the U.S. making $169,800 per year (in 2021), according to the Tax Foundation, it's less surprising that their net worth would average in the seven figure range assuming they were doing all the right things with their earnings. Realistically, not everyone will be able to earn a six-figure net income, however, you can do things to raise your net worth to that of a 10-percenter.

For instance, chip away at liabilities that are holding you back by building a budget around your monthly income. Once your debt is under control, start investing in retirement accounts or through a brokerage account. A financial adviser can help you at both ends of this process by strategizing a financial plan that gets you where you want to be. Another form of investment, however, is in your own professional development, which can actually have an impact on your value to a company and raise the value of your paycheck in time. (Check out 10 important tips for choosing a financial adviser.)

The Federal Reserve reports the top 10% of Americans in 2022 had a median net worth of $2,556,200, and an average net worth of $6,629,600. This is where saving and investing intelligently can help you reach your goals more quickly, due to the power of compound interest. For example, consider, if you had invested $1,000 in Amazon stock in 1997, it would be worth about $2.49 million in 2024 (as of early May).

Homeownership is another big factor in net worth, and it's the biggest purchase most of us will ever make. This said, as the Federal Reserve Bank of St. Louis explains, there are definite challenges to attaining a home for the majority of Americans. Wealth for the lowest 50% of American households averages to $51,000, while their total wealth accounts for 2.5% of the country's total wealth. For the top 10% of households, meanwhile, with their average net worth of ~$6.6 million, they held 67% of the country's total wealth in 2024.

Further, racial wealth gaps in the United States should also be taken into consideration. According to the Fed of St. Louis, Black households owned 23 cents for every dollar of white family wealth, while Hispanic households owned 19 cents. Data on generational wealth gaps also finds that today's younger generations have around 32% more wealth per dollar than earlier generations (Generation X and baby boomers) at the same age.