Statistics Canada released a wealth of information on the state of finances of Canadians. The report is based on a Survey of Financial Security undertaken in mid-2005. As the previous survey was conducted in 1999, the new survey eliminates much of the guesswork in looking at the financial health of Canadians.

The net worth of a median Canadian household in 2005 was $148,400 and the net worth distribution is as follows:

10th percentile – $1,000
30th percentile – $37,300
50th percentile – $148,400
70th percentile – $361,200
90th percentile – $862,900

The report also breaks down median net worth by household after-tax income and as you might expect higher income earners have a higher net worth.

Less than $10,000 – $3,500
$10,000 to $19,000 – $16,000
$20,000 to $29,000 – $48,400
$30,000 to $39,000 – $113,000
$40,000 to $49,000 – $187,500
$50,000 to $74,000 – $260,300
$75,000 or more – $505,700

The report also includes a graphic showing the median net worth by the age of major income recipient of the household:

Under 35 – $15,000
35 to 44 – $140,000
45 to 54 – $230,000
55 to 64 – $407,000
65 and older – $300,000

Draw up your net worth statement and see how you compare to other Canadians. We will look at the assets and liabilities of Canadians in future posts.

This article has 30 comments

  1. When calculating net worth, do you use the market value of your house, or what you paid for it? I’ve always taken the conservative approach of using what we paid for it, although I think most net worth calculations use the estimated market value.

  2. My net worth is WAY low on those charts, but my income is reasonable. Where is everybody getting all this wealth? For my salary range, my net worth is only 25% of the median…

  3. Mike M,

    Use market value for all your assets. Your net worth changes on a daily basis. I don’t consider net worth all that important. I much rather analyze the cash flow that is thrown off from those assets instead.


    My guess is that all this extra “wealth” is due mostly to increase property values and a buoyant stock market.

  4. Net Worth has always been an interesting topic of discussion. But, that being said, it is difficult to get an accurate vision of one’s net worth due to this thing called “tax liability” that never seems to find it’s way onto the liabilities section.

    Let me explain: Sally has a house valued at $300,000 with no mortgage, she also has $100,000 cash in the bank and no debt. Larry has a primary residence worth $150,000 with no mortgage and he has a second home (condo) worth another $150,000 with no mortgage plus $100,000 in an RRSP with no debt.

    So…. on paper according to a normal Net Worth statement – they both have a net worth of $400,000 (assets – liabilities) but… Sally’s $100k is cash whereas Larry’s $100k will be taxed and therefore would be roughly 15%-46% smaller (depending on how Larry withdraws the money – all at once or over time). Secondly, Sally’s $300k home is tax free whereas Larry’s primary residence is tax free ($150k) but if he were ever to sell his 2nd home (condo) valued at $150k it would trigger a capital gain and he would be taxed.

    Personally, I think that there should be a 3rd column in a net worth statement and let’s call it “Future Tax Liability”. And one would put things like RRSP’s, investments, 2nd home and taxable stuff like that in it. Because as my example above shows – Sally’s net worth is clearly the winner, although on paper they are the same.

  5. Canadian Capitalist

    Mike: The market value of real estate was used in the survey.

    Eric: Net worth will also depend on age and other personal factors. For someone just starting out in life, even if income is very high, net worth is likely to be low or even negative.

    The primary purpose of tracking net worth is not comparing yourself to others but to see if you are improving over time.

    Loki: You are absolutely right the not all net worth are equal. Also, selling a house will incur commissions that will take 5% off the value.

    The main reason to track net worth is to see improvements over time. As long as you pick a method and use it consistently its ok to have a rough idea of what it is.

  6. My net worth seems pretty healthy however I am quite certain that it will not improve in the next 2-5 years. Why? Well not because I am doing anything differently but because I live in Calgary where I have seen my house value jump nearly 50% in the past 2 years…and I fully expect it to decline over the next 2-5 years.

    Calculating net worth should be like inflation calculations. You need to take the volatile items out of the equation like housing to come up with a core net worth. The house you live in can be woth a million dollars, but unless you are selling it today there is no point including it into your net worth.

    Just my opinion. 🙂

  7. This is the category that surprises me most of all — that the median net worth of someone making $20-$29K a year is $48,400. That seems remarkably high to me. $25K a year is not very much at all in some of Canada’s largest cities, where much of the population actually lives. I’d ve very impressed to find someone in Toronto, for example, who makes 25 grand a year yet has a net worth of $50,000. That’s probably too small for most real estate ownership, so where would it come from?

    i realize we’re talking about medians so it’s not like every person is applicable. But still. I would guess that the majority of people who make $25K a year would be people in their 20s just starting their careers. If any of them had a net worth of 50K I’d say they were on very solid ground.

  8. Ryan says…”Calculating net worth should be like inflation calculations. You need to take the volatile items out of the equation like housing to come up with a core net worth. The house you live in can be woth a million dollars, but unless you are selling it today there is no point including it into your net worth.”

    And the same would go for the value of your RRSPs, investments, and such, which fluctuate as Mr. Market sees fit… So cash is still king?

  9. Good point TZ! It’s very easy to say your net worth is improving when the markets are doing so well. Let’s see where everyone is after a lengthy bear :0

  10. Canadian Capitalist

    GIV: The breakdown by household after-tax income includes all age groups including retired folks, who I think skew the median.

    Ryan: I would include home equity in net worth due to two reasons: I am deriving economic value from living in a house (If I don’t live in my own house I have to spend money to rent). A portion of every mortgage payment goes towards paying down the principal and I should reflect that in net worth statements.

    Who knows that the future holds? Maybe home prices will correct but then you just calculate net worth the same way reflecting reduced market values. As long as it is consistent, the main purpose of a net worth statement is to give you an idea of your financial health.

  11. I’m surprised that some of you found those statistics to be quite high, because I found them to be rather low. According to the statistics, I’m in the 70th percentile overall; for my income, my net worth is just about spot-on with the median; but I’m WAAAY ahead of others in my age group. As some of you have commented, I am assuming that my RSPs are chopped in half (using an after-tax calculation) and I used the purchase price not the market value of my shoebox condo.
    The reason why I find that figure to be really low is because I’m just a single dude living in a shoebox condo driving an economy car and I’m a working slob in one of our most expensive cities (TO). I certainly don’t FEEL like I have more net worth than 70% of Canadians overall.
    I especially expected the people who frequent this site to be well above the average…?

  12. Well I’m actually below what my bracket says for net worth. But I’m working on it; give me time.

    The report did indicate most people’s net worth came from their homes, a drop in the real estate market would really drop these numbers.

  13. I still think it would be advantageous to simulate two net worth models…do the first the old fashioned (current) way – Assets minus Liabilities. But also do a second one – Assets minus Liabilities minus Future Tax Liabilities. Since the purpose of this is to figure out your standing in this moment in time…now. I can really only see two figures that wouldn’t be seen again in the Future Tax Liabilities. 1. Cash in the bank 2. Principle residence. Both are tax free. Some will argue that the principle residence will incur a hefty 5% commission but that is only if you list with an agent. I have sold 2 homes using “grapevine” for a few hundred dollars.

  14. When I calculate my net worth (I was actually just starting my Q4 2006 calculations today), I use the amount I paid for my house plus any improvements I have made to the house. I think this is a fairly conservative estimate of the value of my house. I have been living in the house for almost 8 years and I think the market value is about 50% higher than what I paid for it but I have also put 25% of what I paid for it into renovations/improvements.

    Using those calculations I am under the median for my household income but if I use the market value of my portfolio I am over the median.

    Another interesting net worth calculation that can be used as a benchmark is The Millionaire Next Door calculation. This is “Net Realizable income” * (Age/10). I cheat a little bit and only include my net salary in the calculation (as opposed to including my unrealized capital gains for example) and I am currently at about 90% of that level but I think it provides a fairly good benchmark and a goal to strive for.

  15. I think the stats just reinforces the concept of time value of money.

    My situation is way under the median for my income bracket but above the median for my age group (despite being on the young end of it)and better than the overall median. I’d like it to be better but I take comfort in the fact I’m in the maximum expenses phase of life but still making progress.

  16. CC, what is your take of Tom Bradley taking a negative tone with ETF’s and his assumption/implying that in the future the expense ratio’s will be comparable to those of mutual funds. I know you are a fan of ETF’s so I thought I would ask.

  17. I think net worth should be excluding values of assets like homes (unless you can sell the home and move somewhere smaller). It doesn’t make any sense because someone with a large net worth might have no access to cash ($$ all tied up in real estate).

  18. Canadian Capitalist

    Mike: John Bogle has also criticized the flood of new ETFs and it is a good topic for a future post.

    CHM: See comment #10 for my opinion.

  19. Pingback: How did we get here? - Million Dollar Journey

  20. My comment is for everyone who leaves a comment saying that certain things should be left out such as your house for reason that if the market drops, I think the whole point of the calculation of net worth is to see where you are today and as long as you stick to the same calculation year after year you compare to see if you improved or not. If your worried about a bear market…hedge against it. One more important point to remember is that as long as your improving your net worth year after year, it really doesn’t matter all that much how it’s calculated when you get into the details, as long as its consistant. Let me know your thoughts on my comments.

  21. Canadian Capitalist

    Wade: I agree with you. Here is a post that makes the same point:


  22. Hi,

    I am feeling sort of depressed…calculated my net worth as a family, including my house, assets etc and have come up with a range between 1.5-1.7Million however, i feel i still am struggling…..wonder whats wrong – the problem is that most of the assets are not liquid and in house, rrsp etc….
    I am almost 46 yrs old and wonder if i have gone wrong or what….
    I see people with fancy cars, houses etc and wonder what they did right that i may have done wrong….

    any comments?

  23. Al, I’d say you’ve done things right, not wrong. You have $1.5 mil in a home for your family and in securing your future with an RRSP. You’re unlikely to be struggling when you retire, and you won’t be burdening your kids (assuming you have some), which will allow them to have an easier time in retirement too. The people in the fancy cars and houses may not be able to say the same. It’s all about what’s important to you. You can save up for a snazzy car if you really want one, but you have to decide for yourself if that’s the best option.

    This was a great set of stats to have. I must admit to being well below median (actually below the 30th percentile), which was sobering. Looks better when I check out my age group though… I’ll have no problem getting to $15K by 35.

    Thanks for posting this.

  24. I think alot of the people who have posted would say that their networth has decreased a little now that we’ve hit this economic downturn.

  25. It amazes me what some people must do with their money. My wife and I are in our mid 30’s and I just figured our net worth to be $915k. About 1/3 of that is due to good timing in the housing market but the rest is just sound money management. She’s a teacher and I’m an engineer both with jobs but not outrageous salaries. If you want my advice: focus on paying down ALL debt. Also, try getting by with just one car and be rutheless with monthly recurring expenses.

  26. VanMan, if you both make 50K (I doubt that low) making your family income 100K USD per year, that puts you in the to 0.66% of the world.

    Not outrageous? Try doing it all on a family income of 60K or even 40K and see how you do.

  27. They really need to get that finance curriculum into our schools ASAP. I can’t believe how low these numbers are. I graduated with almost $50k of net worth mostly just from co-op jobs and prudent financial management.

    If I joined the regular 9-5 rat race I would destroy these numbers. Why is everyone throwing their money away?!

  28. Do I include rental income when comparing net worth to others in my income group?

  29. Pingback: 2005 age average by net worth

  30. Does net worth take into account only mortgages that are 100% paid off?? If not, then would the balance of the unpaid mortgage be deducted (as it is in fact a liability)? Otherwise I think the values are slightly skewed. I don’t think it should include the value of homes because unless they are being sold or generating income (revenue) they aren’t really assets…in addition, the value is entirely market dependent, and not guaranteed.