How it works
Net worth is the answer to a single question: if you sold everything you own and paid off everything you owe, what would be left? The calculator builds it in two columns. The assets column adds the categories people routinely forget — cash in every account, the full balance of investments and retirement accounts, the current market value of the home rather than what you paid, and other assets at a conservative resale value. The liabilities column adds what you owe: the mortgage payoff balance, auto and student loans, and credit card balances. Subtracting the second column from the first gives the number itself. Two readings matter more than the raw figure. The sign: a negative net worth is common early in a career — student debt against few assets — and it is a starting line, not a verdict. The asset-to-debt ratio: below 1.0 debts exceed assets, around 2.0 is a solid working position, and above 4.0 the balance sheet is doing heavy lifting for you. Tracked once or twice a year, net worth becomes the most honest measure of financial progress available — income can rise while net worth falls, and this is the number that catches it.
Formula
Net worth = total assets - total liabilities | Asset-to-debt ratio = total assets / total liabilities
Tips
- Value your home at a recent comparable sale, not the price you hope for — equity you cannot sell is not a cushion.
- Use payoff balances for debts, not the original loan amounts; lenders quote them on request.
- Track net worth on a fixed date once or twice a year — monthly swings are mostly market noise.
- Vehicles and valuables go in at conservative resale value, what they would sell for this month.
- A rising net worth from any starting point is the signal; the level matters less than the direction.
Frequently asked questions
- How do I calculate my net worth?
- Add up everything you own — cash, investments, retirement accounts, home value and other assets at conservative resale prices — then subtract everything you owe: mortgage, student and auto loans, and card balances. Assets minus liabilities is the entire formula; the calculator just keeps the columns honest.
- What is a good net worth for my age?
- A common benchmark is one times your annual salary by 30, three times by 40 and six times by 50, but the averages behind those numbers are skewed by high earners. The more useful comparison is against yourself: a net worth that rises every year, from any starting point, is on track.
- Should I include my home in my net worth?
- Yes, at its current market value, with the mortgage balance on the liabilities side — the difference is your equity, and it counts. Just be honest about the value: use a recent comparable sale, not the price you hope to get, and remember equity converts to cash only by selling or borrowing.
- Is a negative net worth bad?
- It is common, not shameful — most graduates start negative because student debt precedes assets. What matters is the direction. A net worth moving from -$40,000 toward zero is a household winning; a positive number shrinking year over year is the warning sign.
- How often should I check my net worth?
- Once or twice a year is enough. Markets move the number month to month, which invites reacting to noise, and the real signals — debt falling, savings compounding — only become visible over quarters. Pick a fixed date, update the same categories, and compare year over year.