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NW
(Net Worth)
NW (Net Worth) measures total assets (e.g., home equity, IRA balances) minus liabilities (e.g., mortgages, student loans). It’s a snapshot of financial health.
Positive NW indicates assets exceed debts—critical for long-term goals like FIRE. Calculating NW annually helps track progress; tools like YNAB automate this. The average U.S. household NW is $748,800 (Fed Survey of Consumer Finances, 2023), but median NW is $121,700, skewed by wealth inequality. Boosting NW involves increasing assets (e.g., investing in S&P500 index funds) and reducing liabilities (e.g., paying off HELOCs). High NW enables financial flexibility and generational wealth building.
Positive NW indicates assets exceed debts—critical for long-term goals like FIRE. Calculating NW annually helps track progress; tools like YNAB automate this. The average U.S. household NW is $748,800 (Fed Survey of Consumer Finances, 2023), but median NW is $121,700, skewed by wealth inequality. Boosting NW involves increasing assets (e.g., investing in S&P500 index funds) and reducing liabilities (e.g., paying off HELOCs). High NW enables financial flexibility and generational wealth building.