My New Blog

Most Americans don’t see themselves as “rich.” However, even fewer realize just how well off they really are.

For example, if you and your spouse are bringing in at least $40,000 a year, you're doing better than half the households in America. In other words, if you’re a teacher married to a police officer, your combined household income puts you in the top 25% of all households in the nation. Still feel like you’re broke? If your household income is $170,000, you're in the nation's top 10 percent of income earners. Anything in six figures means you're in the top 20 percent of earners in America.

But understand that income is only one part of the equation that defines how rich you really are. Net worth is more telling and more accurate. Net worth is simply the sum of all your assets (home equity, investments, savings accounts, retirement funds, cars, furnishings, jewelry, old baseball cards, etc.) minus all of your outstanding liabilities (mortgages, revolving and credit card debt, college loans, car loans, etc.). Across all households, the national median net worth is $86,000. Interestingly enough, half of all Americans have a net worth that exceeds this amount and half less have less. This will likely change in the coming years as Americans debt load continues to outpace their income.

So, remember to ask yourself this before you buy that new car or newest electronic gadget.  Will my purchase positively or negatively impact my overall net worth?  If it doesn't increase your net worth, perhaps it would be a good time to reconsider that purchase.