How to Calculate Your Net Worth (and What It Tells You)
Add up what you own and what you owe to find your net worth, see how it compares with a common benchmark, and track it over time, with a free calculator.
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Free tool: Net Worth CalculatorYour net worth is the simplest snapshot of your financial health: everything you own minus everything you owe. Tracking it once or twice a year shows whether you're moving in the right direction better than any single account balance. This guide shows how to calculate it and what to make of the result, using the free Net Worth Calculator.
The formula
Net worth = total assets − total liabilities
- Assets: cash, savings, investments, retirement accounts, your home and other property, vehicles and other valuables.
- Liabilities: your mortgage, home equity loans, car loans, student loans, credit card balances and any other debts.
Example
| Assets | Liabilities | ||
|---|---|---|---|
| Cash & checking | $5,000 | Mortgage | $260,000 |
| Savings | $15,000 | Auto loan | $12,000 |
| Investments | $20,000 | Student loans | $25,000 |
| Retirement accounts | $85,000 | Credit cards | $3,500 |
| Home | $350,000 | ||
| Vehicles | $18,000 | ||
| Other | $5,000 | ||
| Total | $498,000 | Total | $300,500 |
Net worth: $498,000 − $300,500 = $197,500.
Two more numbers help put it in context:
- Debt-to-asset ratio: $300,500 ÷ $498,000 = 60.3% of assets are owed to lenders.
- Liquid assets: $40,000 in cash, savings and investments you could reach quickly.
How do you compare?
A rule of thumb from The Millionaire Next Door puts expected net worth at age × annual household income ÷ 10. For a 40-year-old household earning $90,000, that's $360,000. The example's $197,500 is about 55% of that, which the book would call an average accumulator of wealth: below half is an under-accumulator, and twice or more is a prodigious accumulator.
Treat it as a rough benchmark. It doesn't suit people early in their careers, or those who have just bought a home or finished paying for school.
Tips for an honest number
- Value things at what they'd sell for, not what you paid: use a realistic home value and the resale value of cars.
- Include every debt, even small balances and loans from family.
- Retirement accounts are worth less after tax if they're pre-tax 401(k)s or IRAs; you can note that rather than adjust for it.
- Track the trend. Net worth naturally dips after big purchases; what matters is the direction over years.
How to raise your net worth
Paying down debt and saving both increase it directly, while investment growth and home equity add up over time. A budget is usually the starting point; see The 50/30/20 Budget Rule.
How to use the Net Worth Calculator
- Open the Net Worth Calculator.
- Enter your assets: cash, savings, investments, retirement accounts, your home, other real estate, vehicles and other assets.
- Enter your liabilities: mortgage, home equity loans, auto loans, student loans, credit cards and other debts.
- Optionally enter your age and household income to compare with the benchmark.
- Read the results: your net worth, total assets and liabilities, debt-to-asset ratio and liquid assets, with charts of what you own and what you owe.
Frequently asked questions
Does my home count toward my net worth?
Yes. Count its current value as an asset and the mortgage as a liability, so only your equity adds to your net worth.
What is a good net worth for my age?
There's no single answer, but the Millionaire Next Door formula, age × income ÷ 10, gives a rough benchmark: $360,000 for a 40-year-old earning $90,000.
Can net worth be negative?
Yes, if you owe more than you own, which is common early in a career with student loans. Paying down debt and saving steadily turns it positive.