Net Worth in the U.S. Soars to New Heights

Net Worth in the U.S. Soars to New Heights

March sunshine has melted the snow and ice—and brought us some brighter news about the U.S. economy.

According to a new report from the Federal Reserve, net worth across American households and nonprofits hit a record high at the end of 2014.

Between October and December, the value of homes, stocks and other assets—minus debts and liabilities—increased approximately 2% to $82.9 trillion.

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The jump is largely a result of a soaring stock market and strong real estate prices. In the final quarter of 2014, the value of stocks and mutual funds owned by households was boosted by $742 billion, and the Standard & Poor’s 500-stock index grew 4.4%.

In general, good news on Wall Street translates to fatter wallets for the already wealthy. But the fact that residential real estate values also increased—by $356 billion last quarter—means that recent economic gains will have a wider-reaching impact.

Combined with a booming job market and money saved from lower gas prices, gains in net worth could mean consumers have more cash to spend. That bodes well not just for Americans’ financial future, but also for the global economy. As power player China experiences a slowdown and the euro continues to weaken, the world economy is depending on the U.S. in order to expand.

Still, it’s important to keep in mind that wealth typically grows as a result of population increases, inflation and productivity gains—and this report’s numbers aren’t adjusted for the first two.

Yet experts maintain that other factors—like gradually diminishing levels of household debt—do indicate that the consumer economy could soon pick up steam.

Now that you’ve got an idea of total U.S. wealth, it’s a good time to think about checking your personal net worth. Challenge yourself to learn how to calculate your number—and grow it.

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