Building Wealth: How Much Should Your Net Worth Grow With Your Income?

Monitoring your net worth is crucial for long-term financial health, but it’s not a static number — it’s a dynamic target that should grow alongside your age and earning power. Your net worth represents the difference between what you own (assets) and what you owe (liabilities). Whether you’re earning $60 per hour annually or significantly more, understanding the right wealth-building trajectory for your income level can keep you on track for a secure financial future.

Tailoring Your Net Worth Target to Your Annual Salary

Your net worth shouldn’t mirror someone else’s — it needs to reflect your personal earning capacity. Consider an individual earning $60 per hour annually (roughly $125,000 per year), compared to someone making $50,000. These two earners should have vastly different net worth goals, even if they’re the same age.

Financial professionals generally suggest using a straightforward multiplier approach. A common formula is: (Your Age ÷ 10) × Your Gross Annual Income. If you’re 35 years old earning $125,000 annually, your target would be approximately (35 ÷ 10) × $125,000 = $437,500.

The higher your annual salary, the greater your capacity to save and invest should be. Here’s a realistic breakdown for different income levels at age 35, assuming 13 years of consistent saving and a 5% average annual investment return:

Notice the pattern: as your annual salary climbs, your savings rate should increase proportionally. This accelerates both your total savings and investment growth.

Understanding Net Worth: Assets Minus Liabilities

Before targeting a specific number, you need to calculate your current position. Your net worth is fundamentally simple: add up everything you own, then subtract everything you owe.

Assets typically include:

• Cash and savings accounts
• Retirement vehicles (401(k), Roth IRA)
• Brokerage and investment accounts
• Real estate holdings
• Vehicles and personal property
• Collectibles and valuables

Liabilities typically include:

• Credit card balances
• Student loan debt
• Mortgage balance
• Auto loans
• Tax obligations
• Personal loans

Quick calculation example: Suppose you own a $400,000 home, a $10,000 vehicle, $15,000 in cash, and $60,000 in retirement accounts (total assets: $485,000). You owe $350,000 on your mortgage, $12,000 on your car, and $8,000 in credit card debt (total liabilities: $370,000). Your net worth = $485,000 − $370,000 = $115,000.

Age-Based Net Worth Milestones

Your net worth should progressively increase as you move through different life stages. Financial institutions like Fidelity recommend specific income multiples based on age to ensure retirement readiness:

The correlation is clear: higher income enables higher net worth accumulation. By age 50, someone earning $100,000 annually should target $600,000 in net worth, while someone making $60 per hour annually at that age should be approaching similar or higher figures depending on their specific hourly rate calculation.

Key Takeaways for Your Wealth-Building Journey

At age 30: Aim for net worth approximately equal to one year of your annual salary.

At age 40: Target two to three times your annual salary in net worth.

At age 50: Pursue four to six times your annual salary in accumulated wealth.

Remember, these are guidelines, not rigid rules. Your personal financial situation — including debt, expenses, and investment returns — will shape your unique path. The most important action is starting early, maintaining consistent savings discipline, and ensuring your investments align with your risk tolerance and retirement timeline. Consider consulting a fee-only financial advisor to verify your strategy supports your long-term goals.