Net Worth Calculator

How to Calculate Net Worth

Calculating your net worth is a crucial step in understanding your overall financial health. It provides a snapshot of your financial situation by comparing what you own (assets) to what you owe (liabilities). This guide will walk you through the process of calculating your net worth.

Net Worth Formula

The formula to calculate net worth is straightforward:

$$NetWorth = TotalAssets - TotalLiabilities$$

Where:

• $$TotalAssets = CashAndSavings + Investments + RealEstate + PersonalProperty$$
• $$TotalLiabilities = Mortgages + Loans + CreditCardDebt + OtherDebts$$

Calculation Steps

1. List and sum up all your assets (what you own)
2. List and sum up all your liabilities (what you owe)
3. Subtract your total liabilities from your total assets
4. The result is your net worth

Example Calculation

Let's calculate the net worth for someone with the following financial situation:

Assets:

• Cash and Savings: $10,000
• Investments: $50,000
• Real Estate: $300,000
• Personal Property: $20,000

Liabilities:

• Mortgage: $200,000
• Car Loan: $15,000
• Credit Card Debt: $5,000
• Student Loan: $30,000

Step 1: Calculate Total Assets

$$TotalAssets = 10000 + 50000 + 300000 + 20000 = 380000$$

Step 2: Calculate Total Liabilities

$$TotalLiabilities = 200000 + 15000 + 5000 + 30000 = 250000$$

Step 3: Calculate Net Worth

$$NetWorth = TotalAssets - TotalLiabilities$$

$$NetWorth = 380000 - 250000 = 130000$$

Step 4: Final Result

The net worth in this example is $130,000.

Visual Representation

This bar chart illustrates the relationship between assets, liabilities, and net worth in our example. It visually demonstrates how net worth is the difference between total assets and total liabilities.