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Even if your income provides you with a comfortable lifestyle, that doesn’t necessarily mean you’re wealthy. Income doesn’t equate to wealth if you’re young and just getting established, or if you’re older and up to your eyeballs in debt. That’s why we consider net worth the true measure of wealth. It includes everything you own—your house, car, bank accounts, RRSP, stocks and bonds, your small business, and even your company pension. Once you’ve added up these assets, you subtract all your debts and liabilities—such as credit card balances, car loans and mortgage—to arrive at how much you’re actually worth.

If you’re single, it doesn’t take much to be wealthier than 40% of your peers, as Are You Rich? (to the right) shows. Since many unattached people tend not to purchase a home on their own, a net worth of $73,676 puts you squarely in the middle class. A middle-class married couple, on the other hand, has an average net worth of $427,271—slightly more than the average home price in Canada.

Once again, though, a closer look at net worth by region and city provides a far more telling picture. While the national average household net worth sits at $442,130 (see What’s the Source of Your Net Worth on page 55), it’s actually as low as $196,240 in New Brunswick and as high as $591,047 in B.C. As Being Rich is Relative (to the right) shows, net worth quintiles for these two provinces reveal even more disparity: middle-class net worth in B.C. ($444,096) exceeds the highest-tiered net worth in New Brunswick ($421,661).

It’s also interesting to note that the territories, while full of big earners, have much more meagre levels of net worth.

Are you rich?

You might be earning the big bucks, but income alone doesn’t make you wealthy. Your net worth is the best measure of overall wealth. It takes into account everything you own (real estate, pensions, RRSPs and other investments) minus everything you owe. When it comes to wealth, not surprisingly, families have the edge over individuals. The collective net worth of the lowest 40% of individuals wouldn’t match the poorest 20% of families.

Wealth Test 7

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