What Does NetworthIQ Statistics Say about Net Worth?
I have been using NetworthIQ to track our net worth for several months now and find it’s a quite nice tool. However, for most of the time, I go straight to my account and update the numbers without paying much attention to what happened elsewhere. Last night, when I was broswing NetworthIQ, I noticed that their net worth statistics section has some interesting numbers on the relationships between age, income, education and net worth. Though the statistics only cover less than 5,000 users, the trend seems to be quite clear.
Age and net worth
It appears that NetworthIQ users on average have much higher median net worth than the national average across all age groups (there are only 13 users of age 70 and above, thus the numbers are well represented for that group). However, both statistics show that net worth peaks around age 65 when people, after decades of wealth accumulation, enter retirement.
NetworthIQ data also shows that the 25 to 34 age group owns half of the active users (2,452 out of 4,975), though their net worth is relatively smaller than other age groups. The way I look at it is that this may suggest that people in their 20s and 30s, who are also the majority of internet users, are more likely to use network tools such NetworthIQ to track and share their financial progress. This can be a good thing if we can interpret this as a sign that young people are paying more attentions to their own financial well-being.
Income and net worth
Education and net worth
| Education | Profile Count | % of Pop | Median Net Worth |
| Less than high school graduate | 52 | 0.86 % | $3,000 |
| High school graduate | 131 | 2.17 % | $37,038 |
| High school graduate with some college | 660 | 10.93 % | $19,450 |
| Associate degree | 219 | 3.63 % | $49,200 |
| Bachelors degree | 2303 | 38.15 % | $75,000 |
| Masters, professional, doctoral degree | 1488 | 24.65 % | $197,754 |
If there’s any doubt on how education (thus, income) will affect a person’s wealth, the data from NetworthIQ just confirms that higher education means higher personal income and, thus, higher net worth. This is also observed from the census data (use above link). I know there are many highly talented and motivated people who don’t need an advanced degree to make a fortune, but for working classes, a good education paves the path to a good-paying job and the ability to earn more from everyday job generally leads to higher net worth (the net worth grows almost exponentially with the income level).
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Trackbacks & Pingbacks
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8 Comments
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I’m always a little suspicious of self-reporting things like NetWorthIQ. I think there are some liars on there. But on the other hand, I use the site and I think your comparison shows that people who bother to track their net worth at all are more likely to have higher net worth. I am sure there is a statistical test for that assertion. If so, can you run it?
I think even as an unscientific observation, it still holds true. I mean, people who care to know where they stand, probably also care to make their position better, so it stands to reason that just measuring your net worth will put you on a better path to wealth accumulation than ignoring it altogether.
Thanks for the analysis!
If you don’t mind, I’ll plug my blog here. I have the NetWorthIQ widget on my sidebars. I like it because it was one of the few pictures on my blog before I decided to run ads. I try to update it monthly and because NWIQ lets you put comments, I also sometimes put commentary there, but I warn you, they read like audited statement notes sometimes. (It’s the burgeoning accountant in me!)
I love the education chart. Lesson learned:
“If you think you might drop out of college, your better off not going in the first place.”
I like seeing my home state of Ohio being well represented, but I do recall that there is someone that has like $53,000,000 that is probaly bringing up the curve.
Im with Mapgirl, I do not believe 100% in networth IQ, for that matter any networth. Most people can always exarrgenrate a little.
But I do agree Education makes the gap wider.
Hi Sun, thanks for the analysis, this is pretty cool to see people running the numbers. As we go forward, and start to see a larger statistical sample size, cleaning up the data (reducing skew, isolating the ‘liars’, etc.) will become a big point of emphasis for us. But, it’s encouraging to hear that the overall trends match up with the census data.
@Mapgirl: Glad to hear you’re a repeat user and that you use the widget, thanks!
@Moneymonk Hopefully the other features of the site (the net worth tracking, community comments, tips, etc.), besides the data, are useful to people too. I’m not sure if you mean you don’t believe 100% in the data or the site itself, but I’ll be optimistic and assume you just mean the data
.
There’s definitely bad data which makes the average impossible to use but the median could be close enough with a large enough sample size. 10 people lying about having several billion dollars just bumps the median up 10 notches up the actual scale.