Money hazards: Comparing yourself to the Baby Boomer average net worth

This could be about any generation. We will take Baby Boomers as an example, but it could be GenX or Millennials — any age group can fall for this money hazard. 

Comparing your net worth to the Baby Boomer average net worth is an exercise in futility. 

First, the stats: The Baby Boomer average net worth is between $1.2 million and $1.6 million. 

How are you feeling now? 

Hang on. The thing is, the comparison itself is built on illusions, distortions, and missing context. The average net worth number you see widely reported is rarely a meaningful benchmark for your actual financial reality. 

Your brain is reacting to a metric that was never designed for personal evaluation.

This is one money hazard you can fix right now. 

No one is average

"Average net worth” is a statistical mirage. 

It mixes together people with wildly different ages, incomes, life stages, and assets. First off, "average" is the wrong mathematical benchmark. A small fraction of ultra-wealthy households pulls the average upward by millions. You’re not failing. You’re comparing yourself to a number that doesn’t represent a real person.

Social comparison is wired to hurt — Your brain is built to notice status gaps, even when the comparison is meaningless.

The real financial indicator to consider

The median is the real indicator of typical people.

The Baby Boomer median net worth is between $206,000 to $432,000. And that includes a home, retirement accounts, and other assets.

Net worth is not a measure of intelligence, discipline, or character. It’s mostly a measure of:

• When you were born
• Your family’s financial history
• The cost of your local housing market
• Luck
• How long you have been in the workforce

Avoid a money hazard

A better comparison is your net worth now compared to any number of years ago. Whether it's 5, 10, 15, or 20 years ago, how your net worth has changed — hopefully grown — slowly, over time, is the only real measure that matters. 

Every substantial financial decision you make should consider how it will ultimately affect your net worth over time.