Net Worth — How to Calculate What You're Really Worth

What is net worth?

Your net worth is everything you own minus everything you owe. Add up the current value of your assets — cash, savings, investments, property, gold, anything you could turn into money — then subtract every debt you still carry. What remains is your net worth: a single honest number that shows where you actually stand.

It is the one figure that cuts through how busy your finances feel and tells you how they really are. A high salary with heavy debts can leave a lower net worth than a modest income with none.

The net worth formula

The calculation itself is one line:

Net worth = Total assets − Total liabilities

Assets are what you own. Liabilities are what you owe. If the result is positive, you own more than you owe; if it is negative, your debts outweigh your assets — which is common early in adulthood, or right after a large mortgage, and is a starting point rather than a verdict.

There is also a quieter third category most calculators skip: money owed to you. A personal loan to a relative, a debt a friend is repaying, an invoice still outstanding — these are receivables, and they belong on the asset side at the amount still due. WiseEnding counts them explicitly, so the fuller formula is:

Net worth = Assets + Owed to you − Liabilities

What counts as an asset?

An asset is anything you own that has monetary value and could, in principle, be turned into cash. List each one at its current market value — what it would sell for today, not what you paid for it.

• Cash and deposits — current balances in current, savings and money-market accounts.
• Investments — stocks, bonds, funds and brokerage accounts at their latest reported value.
• Retirement accounts — pensions, 401(k)s and IRAs at current value (note taxes or early-withdrawal penalties separately; don't subtract them from the headline figure).
• Property — your home and any other real estate at a conservative fair market value.
• Vehicles — cars and other vehicles at a realistic resale price.
• Valuables — gold, silver, jewellery, art and collections at what they would genuinely fetch.
• Money owed to you — outstanding personal loans and unpaid amounts others owe you.
• Business interests — the market value of a business or share you own.

What counts as a liability?

A liability is any debt or obligation that reduces what you truly own. Use the outstanding principal — the balance left to repay — not your monthly payment.

• Mortgage — the remaining balance, not the original loan.
• Car and vehicle loans — the outstanding principal.
• Credit card balances — the statement balance.
• Student and personal loans — what is still owed.
• Other debts — buy-now-pay-later balances, unpaid taxes, medical bills, and loans from family or friends that you are expected to repay.

Some things are both. Your home is an asset at its market value, but the mortgage on it is a liability — so a property worth 400,000 with 250,000 still owed contributes 150,000 to your net worth, not 400,000.

How to calculate your net worth, step by step

Work through it once, slowly, and the number is yours for good.

1. Set the scope and the date. Decide whether this is just you or your whole household, and fix one calculation date so every figure is measured at the same moment.
2. List every asset at current value. Work from statements, not memory — balances, portfolio values, a conservative estimate for your home.
3. Add money owed to you. The outstanding balance on anything others owe you, at the amount still due.
4. List every liability at outstanding principal. Pull the current balance on each debt, not the payment.
5. Subtract liabilities from assets plus receivables. That figure is your net worth.
6. Repeat on a rhythm. Quarterly or twice a year is enough. Net worth is a direction, not a single reading.

A worked example

Imagine a household with: 30,000 in cash and savings; 120,000 across investments and retirement accounts; a home worth 400,000; a car worth 15,000; and 5,000 still owed to them by a sibling. Total assets plus receivables = 570,000.

Their liabilities: a mortgage balance of 250,000; a car loan of 8,000; and a credit card balance of 2,000. Total liabilities = 260,000.

Net worth = 570,000 − 260,000 = 310,000. The house alone looked like 400,000 of wealth; the true figure is what remains once the mortgage is honoured.

Net worth vs liquid net worth

Your net worth counts everything. Your liquid net worth counts only what you could turn into cash quickly — savings and sellable investments — minus liabilities. The liquid view answers a different question: "how fast could I meet an obligation without selling my home?" Both matter. Net worth is the measure of wealth; liquid net worth is the measure of resilience.

What's a good net worth for my age?

The fairest benchmark is the median, not the average. In the US Federal Reserve's 2022 Survey of Consumer Finances, the average household net worth was about $1.06 million but the median was only $192,900 — because a small number of very wealthy households pull the average far above what a typical family holds. Compare yourself to the median.

| Age of head of household | Median net worth | Average net worth | |---|---|---| | Under 35 | $39,000 | $183,500 | | 35–44 | $135,600 | $549,600 | | 45–54 | $247,200 | $975,800 | | 55–64 | $364,500 | $1,566,900 | | 65–74 | $409,900 | $1,794,600 | | 75+ | $335,600 | $1,624,100 |

Treat these as context, not a scorecard. Debt cleared, dependants provided for and a family that could find everything tomorrow are worth more than a percentile.

Why your family needs this number

A net worth calculation is not only for you. It is, almost by accident, the best possible map for the people you love: a complete, current list of everything you own, everything you owe, and everyone who owes you.

If something happened to you, that one document is what an executor or a grieving spouse would reach for first. Debts are normally settled from an estate before heirs inherit, and an executor can only settle what they can find. A clear register spares your family the search — and spares you the quiet risk of a debt or an asset nobody knew about.

The point of knowing your net worth is not the number. It is that, for the first time, everything you own and owe is written down in one place — for you now, and for them later.

How WiseEnding keeps it current

WiseEnding is built around exactly this calculation. In My World, your assets sit against The Anchor — what you owe — and Owed to you, so your net worth updates itself as balances change, gold and investments move, and debts are cleared. The same record that answers "what am I really worth?" today becomes the record your family can rely on through the Family Vault tomorrow. One number, kept honest, doing two jobs at once.