how to calculate net worth
How to Calculate Net Worth with Assets and Liabilities
Many people track income but ignore net worth. This article provides a practical framework for personal balance-sheet calculation.
How to calculate using Net Worth Calculator
- List all assets: cash, investments, property, and other valuables.
- List all liabilities: mortgage, loans, and credit balances.
- Subtract liabilities from assets to get personal net worth.
Net Worth Calculator formula
- Total assets = sum of all owned financial and physical assets.
- Total liabilities = sum of all outstanding debts.
- Net worth = total assets - total liabilities.
Worked example
- Assets = $500,000; liabilities = $200,000.
- Net worth = $300,000.
- Track monthly to measure financial progress over time.
Accuracy and interpretation notes
- Use current market values for property and investment accounts.
- Keep a consistent valuation date for accurate trend comparison.
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