Net worth is the value of everything you own (assets) minus everything you owe (liabilities). Formula: Net worth = Total assets − Total liabilities. It can be negative. For a household, add up everyone who shares finances. That number is your position on the day you measure it.
Net worth meaning
Net worth is one figure for your financial position at a point in time. It is a snapshot. It is not income, and it is not cash flow. A high month of pay changes it only when that cash is still there, or a debt is actually lower, on the day you measure. The case for watching this number is why we track net worth, not cash flow.
"My net worth" means that same snapshot for you, on the day you add it up. An estimate is the same figure built from approximate values when you do not have a statement in front of you.
The net worth formula
Net worth = Total assets − Total liabilities
That is the personal net worth formula and the total net worth formula. Use today's market value for each asset and today's balance for each debt.
The same formula is a personal balance sheet. Assets sit on one side, liabilities on the other, and the difference is equity. For a person, equity is net worth, so you can calculate net worth from a balance sheet by reading that difference. A business's net worth (its equity) uses the same identity.
How to calculate net worth
Here is how to calculate net worth, step by step.
- List assets at today's value.
- List debts at today's balance.
- Subtract liabilities from assets.
- Repeat on the same day each month, with the same rules.
Illustrative example, not an average. Example household: cash $8,000; retirement accounts $60,000; brokerage $15,000; home $350,000; car $12,000; mortgage $280,000; car loan $9,000; credit card $2,000. Assets $445,000, liabilities $291,000, net worth $154,000.
| Item | Amount |
|---|---|
| Cash | $8,000 |
| Retirement accounts | $60,000 |
| Brokerage | $15,000 |
| Home | $350,000 |
| Car | $12,000 |
| Total assets | $445,000 |
| Mortgage | $280,000 |
| Car loan | $9,000 |
| Credit card | $2,000 |
| Total liabilities | $291,000 |
| Net worth | $154,000 |
These figures are hypothetical so the arithmetic is easy to check. They are not an average and not a benchmark. When your own list is ready, calculate your net worth in the browser.
What counts as an asset
Count what you own at a value you could defend today:
- Cash and savings.
- Investment and retirement accounts, at current value, not at what you contributed.
- Your home, at a realistic sale value.
- Vehicles, at resale value.
- Business equity, your share of what the business owns minus what it owes.
- Money owed to you, if you reasonably expect to collect it.
Leave future income out. A salary you have not received yet is not an asset. Personal items (furniture, clothes, jewelry) belong only at resale value, and only when that amount is large enough to matter.
Pensions and Social Security need one consistent rule. Either leave them out of the snapshot, or list them on their own line every time. Switching between those treatments makes the month-to-month change meaningless.
What counts as a liability
Count what you owe, at the balance due today:
- The mortgage.
- Car loans.
- Student loans.
- Credit card balances.
- Personal loans.
- Taxes you already owe.
The original loan amount is not the liability. The remaining balance is.
Your home and mortgage
Count the home at market value and the mortgage balance as a liability. Home equity is the difference between those two. Calculating net worth with a mortgage means keeping both numbers. Leaving the house out understates the snapshot. Counting the house and forgetting the mortgage overstates it. Do not use the purchase price. What you paid is history. The sale value today is the asset.
Types of net worth you'll see
People use three names. Only the first is the standard personal figure.
Total net worth meaning
Total net worth means everything in: the assets and liabilities above, one result. When someone asks for your net worth without another adjective, this is the figure.
Liquid net worth
Liquid net worth counts assets you can turn into cash quickly, then subtracts debts. A house and a car usually drop out. The net worth calculator covers net worth versus liquid net worth: remove the rows you could not sell within days, and read what remains.
Tangible net worth formula
Tangible net worth is a lender and business term, not the household snapshot above. Tangible net worth = total assets − intangible assets − total liabilities.
Can net worth be negative?
Yes. Net worth is negative when debts are larger than assets. That is common early in life with student loans, or right after a home purchase with a small down payment. The sign is a starting point. The trend matters more: the same calculation, repeated, showing whether the number rises.
Personal vs. household net worth
A personal figure counts one person's assets and debts. A household figure adds everyone who shares the finances. Those are different questions. Mixing them, or comparing a person with a family survey, makes the number look higher or lower than the comparison intends.
Benchmarks such as the Federal Reserve's Survey of Consumer Finances measure families, not individuals. The 2025 SCF median family net worth is $215,900 and the mean is $1,241,500 (2025 dollars; Federal Reserve, Changes in U.S. Family Finances from 2022 to 2025, Table 2, released Oct 9, 2026).
How often to calculate it
Once a month is enough. Use the same day and the same method each time, including the same rule for the house, retirement accounts, pensions, and Social Security. A new number every day mostly tracks markets, not decisions.
Rialzo is a free desktop net worth tracker. Add a monthly snapshot of your balances, in any currency, and watch the trend. Your data stays on your computer.
Download Rialzo for macOS Apple Silicon, macOS Intel, or Windows x64.
Free forever · one-time lifetime Pro · no bank sync.
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FAQ
What is net worth in simple terms?
What you own minus what you owe. Add up the current value of your cash, investments, home and other assets, subtract every debt such as your mortgage, loans and credit cards, and the result is your net worth. It is one number for one day.
What is the formula for net worth?
Net worth = total assets − total liabilities. Use current market values for assets and current balances for debts. The same identity sits behind a balance sheet: assets equal liabilities plus equity, and for a person, equity is net worth. Write both sides down before you subtract.
Does my house count in net worth?
Yes, at a realistic current market value, with the mortgage balance subtracted as a liability. The difference is your home equity. Leaving the house out understates net worth. Counting its value without the mortgage overstates it. Use a sale price you could get today, not the price you paid.
Is net worth the same as income?
No. Income is money coming in over a period. Net worth is a snapshot of assets minus debts at one moment. A high earner with large debts can have a low net worth, and a retiree with little income can have a high one.
Is it normal to have a negative net worth?
It is common, especially early in a career with student loans, or soon after buying a home with a small down payment. A new mortgage can push the figure below zero even when the purchase was planned. What matters is whether the number rises over time.
How often should I calculate my net worth?
Once a month is plenty for most people. Use the same day and the same valuation method each time so the trend means something. Repeating it on the first of the month is enough. A free calculator works for a one-off check. A tracker keeps the history.
Next steps
Run your own numbers in the net worth calculator. Nothing you type is uploaded.
Net worth is also the starting point for a FIRE number.
Used Mint for the net worth chart? See the alternatives.
Rialzo is a free desktop net worth tracker. Add a monthly snapshot of your balances, in any currency, and watch the trend. Your data stays on your computer.
Download Rialzo for macOS Apple Silicon, macOS Intel, or Windows x64.
Free forever · one-time lifetime Pro · no bank sync.