Net Worth Calculation
Net worth is a snapshot of what you own minus what you owe at one date. It is the clearest single measure of financial position, and the trend over time matters more than any one reading.
The formula
Net worth = total assets − total liabilities
A positive result means you own more than you owe. A negative result is common early in a career or after taking a mortgage or student loan, and says where you start from rather than where you will end.
What counts as an asset
Include items you own that have a realistic market value: cash and bank balances, investment accounts, retirement accounts, property and other valuable items such as a vehicle or a business interest. Value each at what it could reasonably be sold for, not what you paid or hope to receive. Use the same method each time so changes reflect real movement rather than changes in how you estimate.
What counts as a liability
Include every amount you owe: mortgages, car loans, student loans, credit card balances and any other debt. Use the balance outstanding today, not the original loan amount.
A worked example
The figures are illustrative.
| Item | Value |
|---|---|
| Cash and checking | 12,000.50 |
| Brokerage and investment accounts | 40,000.00 |
| Retirement accounts | 85,000.00 |
| Real estate | 300,000.00 |
| Other assets | 15,000.00 |
| Total assets | 452,000.50 |
| Mortgage | 220,000.00 |
| Auto loan | 9,000.00 |
| Student loans | 14,000.00 |
| Credit cards | 2,500.75 |
| Total liabilities | 245,500.75 |
| Net worth | 206,499.75 |
Note how much of this example sits in one item: the property is 300,000 of 452,000.50 in assets, about 66%. Net worth held mostly in a home is real, but it cannot easily be spent. Consider also tracking a liquid net worth that leaves out property and other hard-to-sell assets.
Tracking it over time
- Record the figure on a fixed schedule such as quarterly. Monthly is fine if you have the patience; daily is noise.
- Keep a short note of what changed: new loan, market fall, salary rise. The note makes the trend explainable later.
- Compare with your savings: if net worth rose by less than you saved, asset values or debts moved against you.
To see your own position, use the Net Worth Calculator. For the monthly habit that feeds it, see how to track monthly expenses.
Run the numbers
Want to track this over time? WorthMorrow is being built to help you track expenses, net worth, investments and financial progress in one private workspace. The tools are not yet available; see WorthMorrow Tools for their status.
Educational estimates, not advice. Results depend on the assumptions you enter and are not predictions or personalised financial, investment, tax or legal advice. Read the financial disclaimer.