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When you make it through your net worth statement the first time, a question naturally will occur. “What does my net worth mean?” So here are a few guidelines on where your net worth may land and some guideposts along the way.

Quick recap: Net worth means the value of your assets, less the liabilities. So if you have a house for $100,000 and owe $80,000 on it, your net worth would be $20,000. Got it? Good! If you need more detailed explanation you can check out our guide on How to calculate your net worth

The common answer point most people will refer to is the amazing book “The Millionaire Next Door” By Thomas J Stanley Ph.D. The book gives a great insight into what most millionaires are and it was a personal launching pad for me. It’s a little on the dry side, but the takeaway knowledge was immense.

Quick Way to Tell If You Are On Track with Your Net Worth

The formula from The Millionaire Next Door for calculating if you are on track with your net worth is:

Your AGE * by Current Wage / 10

For example, if you are 30 years old and making $100,000 a year, then your net worth should be $300,000 (30 x 100,000/10).

If you are higher great! If you are lower, you know what to shoot for.

This is a good idea, but it has its flaws.

For instance, if you just started making this amount it would be nearly impossible to get your net worth to this number. Like most things you read it’s a good rule of thumb, but everyone’s situation is different.

I found it works best with people who have been in a job for a long time around the same pay.


Below are the different levels of Net Worth and some thoughts as you go along the way

(Before we jump in If you would like to sign up for our newsletter and Immediately get a free copy of the Net Worth Statement I use along with a walk through video not available on this page, simply submit your email below and I will send you the same spreadsheet I use. You can sign up here.)

The Stages of Net Worth

Negative Net Worth

This is when you owe more than you own. Hey, it happens! School loans, excessive shopping, failed businesses, and a million other reasons.

The point is everyone starts somewhere and this is just a starting point for you. When you find yourself here, the best thing to do is to set your sights on.

Break Even Net Worth

This is when your Net Worth is $0.  If you have been in a negative net worth it’s time to celebrate. Congratulate yourself with a pat on the back and start focusing on the next level.


I can think of several people I know that live their entire lives here.

They make their money and they spend it, over and over , month after month, year after year. They never clue in to the idea of wealth or have never been educated on the topic and that’s why they never change. Luckily you are already destined to be beyond this because you are educating yourself. Well done!


This was a big one for me when I was starting out. 4 digits! Wow! I remember saving and saving to get there when I was younger. First jobs and side businesses helped. This was when I started to get more entrepreneurial with my efforts and realized that trading my time for money wasn’t the greatest idea.


5 Digits! This is a great moment. Because it usually doesn’t happen without a little bit of effort. This was huge, mostly because the next stop was $50,000

Memorable marker- As a side note, when I got a net worth of $50,000 I realized that all I needed to do was replicate what I had been doing 20 times and I would be a millionaire.


6 Digits! Way to go, this is a big step because the next digit puts you in to an elite class. You have clearly demonstrated some financial smarts. Make sure to celebrate this is a huge milestone.


WOW $250,000 is an awesome stepping stone, at this point you have usually been able to demonstrate some financial smarts, you have a plan in place and are following it. Keep up the good work!


Hitting this level is huge for a lot of reasons. It’s clear you have been working at it (possibly over several years, depending on when you started tracking everything).  You have a keen sense of wanting to be wealth and now you just have to the same thing one more time and you will be in the Millionaire club.

Three-Quarter Millionaire

$750,000! WOW! You are getting close, so close you can taste it. Steady is the name of the game, just keep doing what you have been doing and it should all work out.

Millionaire light

This could be your starting point, or your last stop before become a full-fledged Level 2 Millionaire. See Levels of Millionaires to learn more.


You now have a net worth of $1,000,000 and are already climbing to bigger and better things. Good for you!

As you progress through these levels in life. Always take time to celebrate every achievement along the way. Getting to be a Thousand-Aire was huge for me way back when. Probably because it felt incredibly hard to do at the time. Find a way to celebrate and if you can’t think of anything here is a High-Five for keeping on the road to financial freedom.


Now check out: How often should I track my net worth statement.

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Wonder what your net worth means? Are you on track for what you make? Find out where you should be when it comes to your net worth. | Wealth building

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