Net worth

 Net worth is the total value of all assets minus any liabilities. Put simply, net worth is what you own minus what you owe. 

Calculating net worth can be a helpful way to determine one’s wealth and the overall health of a person’s or company’s financial situation. It can also help you figure out what you may need to do to reach your financial goals.

Key takeaways

  • Net worth is the total value of assets minus any liabilities or debt.
  • Net worth can be a helpful snapshot of a person’s or company’s wealth.
  • Positive net worth might be a sign of good financial health.
  • Negative net worth might be a sign of poor financial health.

How to calculate your net worth

To calculate your net worth, subtract any debts and liabilities from the total value of your assets. In other words, subtract what you owe from what you own. 

To do this, you’ll first need to add up your assets and liabilities, which can take a little bit of time. Here’s how to calculate net worth.

1. Add up your assets

Add up the total value of anything that could be considered an asset. An asset is anything with monetary value. This can include things like cash, checking and savings accounts, stocks, bonds, mutual funds, and retirement accounts. Assets also include personal property, such as real estate, vehicles and jewelry.

If you’re not sure what something is worth, you could have it appraised. But that might cost you. So if you’re just looking for a general idea of your net worth, you could estimate it yourself to get a rough idea. 

Do some research to help you be more accurate. For example, check Kelley Blue Book to determine the value of your car. If you’re trying to figure out how much your house is worth, use an old appraisal or compare your house to recent real estate listings around you.

2. Add up your liabilities

A liability is a debt or financial obligation, like a loan or mortgage. It’s basically anything you owe. Liabilities can include things like:

  • Credit card debt
  • Car loans
  • Personal loans
  • Student loans
  • Home mortgage

To calculate the total amount of your liabilities, add up all your debt. 

Calculate net worth

Now that you have an idea of your assets and liabilities, you’re ready to calculate your net worth. To get net worth, subtract liabilities from assets. When you do this, you’ll get either a positive or negative number, depending on the amount of assets and liabilities. 

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