How do I find out my networth? Add up everything you own, add up everything you owe, and subtract the second total from the first. That’s the entire formula. The only hard part is gathering honest numbers, and you can finish the job in about an hour.
I remember doing this for the first time at a kitchen table with a pile of statements and a cold cup of coffee. The result wasn’t flattering. It was useful, though, and that’s the point.
Step one: list what you own
Write down your assets and what they’re worth today. Not what you paid, and not what you hope they’ll be worth.
- Cash in checking and savings accounts
- Retirement accounts such as a 401(k) or IRA, at current balance
- Brokerage and investment accounts
- Home value, using a recent comparable sale or an online estimate
- Vehicles, at a realistic resale value
- Business ownership, if any, at a conservative value
Be stingy with personal belongings. Furniture and clothing sell for pennies on the dollar. Most people include only items that could realistically fetch real money, like jewelry or collectibles, and many skip them entirely.
Step two: list what you owe
Now the less fun column. Include your mortgage balance, car loans, student loans, credit card balances, personal loans, medical debt and any money you owe to family. Use the payoff amount from your latest statement.
Don’t forget taxes you owe but haven’t paid. If you’re self-employed, that can be a sizable item.
Step three: do the subtraction
Assets minus liabilities equals net worth. If it’s positive, great. If it’s negative, you’re in good company, particularly among young adults with student loans or people who recently bought a home with a small down payment. A negative number isn’t a verdict. It’s a starting line.
A quick example
Say you have $12,000 in cash and savings, $40,000 in retirement accounts and a car worth $9,000. You owe $18,000 in student loans and $3,000 on cards. Assets are $61,000, debts are $21,000, so your net worth is $40,000.
Making the number useful
One snapshot is interesting. Repeated snapshots are powerful. Pick a date, perhaps the first of each quarter, and redo the math. Track it in a spreadsheet or a free app. Watch the direction rather than any single result, because markets and home prices will move it around.
You can also compare yourself with benchmarks, but carefully. The Federal Reserve’s Survey of Consumer Finances publishes net worth data by age and income group. Averages are skewed by the very wealthy, so the median is the more honest comparison.
Common mistakes when you work out your networth
The big ones: counting a home at its asking price instead of a realistic sale price, forgetting small debts, treating pre-tax retirement balances as fully spendable, and mixing in income. Your salary isn’t net worth. Savings from it are.
Another trap is giving up after one ugly result. If you want to move the number, there are only two levers: grow assets or shrink debts. Paying off a high-interest card is a guaranteed return equal to its interest rate, which is hard to beat elsewhere.
So if you’ve been wondering how do I find out my networth, grab your latest statements tonight, build two lists and subtract. Then set a calendar reminder to do it again in three months.
How often should you check?
Quarterly is plenty for most people. Monthly can be useful if you’re paying down debt and want the motivation of watching the total climb. Daily is counterproductive, since stock prices bounce and you’ll end up reacting to noise.
Keep the records simple. One sheet, one tab per date, same categories each time. If you use an app that links to your accounts, double-check that it hasn’t missed a loan or counted something twice. Automation is convenient, but it still needs a human glance now and then.
This article is for general information only and is not financial advice.
Related reading
- How Do I Calculate My Net Worth? A Simple Walk-Through
- Monarch Networth Capital Official Website: How to Find and Verify It
Photo: habiloid, CC BY-SA 2.0, via Wikimedia Commons
