Your Financial Scorecard
What Is Net Worth and Why It Matters
Net worth is simply Assets − Liabilities. Everything you own minus everything you owe.
Income measures money flowing in. Net worth measures the total result of your financial decisions.
Benchmark by Age
At age 40 a typical target is 2× annual income. At age 50 around 4× income. These are directional guides, not strict rules.
Net Worth Formula
Assets − Liabilities = Net Worth
Calculate monthly and track the trend.
- → Assets: cash, investments, property, valuables
- → Liabilities: mortgage, loans, credit cards
- → Track monthly rather than annually
- → Use a spreadsheet or finance tracking app
Milestone Benchmarks
Net Worth Targets by Age
| Age | Target Net Worth | Key Milestone | Action Priority |
|---|---|---|---|
| 25 | 0.25× income | Emergency fund + no credit card debt | Build savings habit |
| 30 | 1× income | Emergency fund + retirement started | Max tax-advantaged accounts |
| 40 | 2× income | Mortgage controlled + strong portfolio | Diversify investments |
| 50 | 4× income | Retirement on track | Reduce risk exposure |
| 60 | 6× income | FIRE number approaching | Plan withdrawal strategy |