What is your Net Worth?

Your personal net worth is the combination of what you own (your assets) and what you owe (your liabilities). Knowing your net worth helps you understand your current financial situation or financial health.

Setting up a net-worth statement is easy once you have gathered your financial information.

  1. List all of your assets and estimate the value of each and add up the total. Assets might include:
    • Money in your bank accounts
    • Value of your investment accounts including IRAs, 401(k)s
    • Cash value of life insurance policies
    • Value of your home
    • Value of your car
    • Personal property such as jewelry, art, collectibles
  2. List your liabilities and the outstanding balances of each and add up the total. Liabilities might include:
    • Mortgage
    • Car loan
    • Credit card balance
    • Student loans
  3. Subtract your liabilities from your assets to come up with your personal net worth.

The net worth you calculated is just a snapshot in time of your current wealth. You can use it as a starting point to measure your progress toward your goals over time. An increasing net worth over time means you are building wealth for your future.

Something that is not included on a traditional net-worth statement is your human capital. Your human capital is your ability to generate income or earn a living. If you are just starting out in your career, your human capital is likely the most valuable asset you have.

Everyone has different values, needs and goals so focusing on what is important to you will help you make decisions about how to spend, save and invest your money.

You can access a worksheet here to help you get started on determining your net worth.