How to Calculate Net Worth
Calculating your net worth is simple: add up everything you own, then subtract everything you owe. The result is your financial scorecard at a single point in time.
Use the calculator above to run your own figures, then keep reading to learn what counts, what to skip, and how to interpret your result.
How it's calculated
Net worth equals total assets minus total liabilities. Assets are things you own that have real cash value today: checking and savings, taxable brokerage balances, retirement accounts like 401(k)s and IRAs, the current market value of your home, vehicles, and other property you could sell.
Liabilities are what you owe right now: the remaining balance on your mortgage, auto loans, student loans, credit card debt, personal loans, and any unpaid medical bills. Use today's payoff amount for each debt, not the original loan size. The Federal Reserve uses this same framework in its Survey of Consumer Finances. For age-based benchmarks, see the net worth by age calculator. If a credit card balance keeps climbing, check whether a credit card cash advance is quietly part of it — the fee and interest stack up faster than a regular purchase. FAFSA and the SEC's accredited-investor test each exclude different things from the general formula above: see net worth for FAFSA vs. accredited investor rules.
A worked example
Take a 30-year-old running the numbers. On the asset side: $10,000 in cash, $15,000 in a taxable brokerage account, $30,000 in a retirement account, and $18,000 for the current resale value of their vehicle.
That adds to $10,000 + $15,000 + $30,000 + $18,000 = $73,000 in total assets. On the liability side: $12,000 left on an auto loan, $25,000 in student loans, and $3,000 in credit card debt — $12,000 + $25,000 + $3,000 = $40,000 in total liabilities.
Net worth is $73,000 − $40,000 = $33,000, with a debt-to-asset ratio of 54.79%. The Federal Reserve's Survey of Consumer Finances puts the median net worth for households under 35 at about $39,000, so this person is roughly $6,000 below the median for their age bracket — close, but with room to grow by paying down the credit card and student balances.
Common mistakes to avoid
- Using the purchase price of your home instead of its current market value — net worth tracks today's reality, not what you paid years ago.
- Subtracting the original mortgage amount instead of the remaining balance owed.
- Excluding retirement accounts because of future taxes — a 401(k) or IRA is still an asset today, even though withdrawals will eventually be taxed.
- Overvaluing vehicles. Cars depreciate fast, so use a current resale estimate (Kelley Blue Book or similar), not what you paid.
- Forgetting small liabilities like credit card balances or buy-now-pay-later plans — they reduce net worth just like any other debt.
Frequently asked questions
How do you calculate net worth?
To calculate net worth, add the current value of every asset you own — cash, investments, retirement accounts, home, vehicles — then subtract the total of every debt you owe. The result is your net worth on that date.
Do I include my 401(k) and IRA in net worth?
Yes. Retirement accounts are assets at their current balance. Future taxes on withdrawals don't change that — most people use the full balance and simply remember the tax bill is coming. For the more conservative measure, see the liquid net worth calculator.
Should I use my home's purchase price or current value?
Use the current market value. Net worth measures today's reality, so check a recent appraisal or a Zillow-style estimate. Then subtract the remaining balance on your mortgage, not the original loan amount.
What if my net worth is negative?
A negative net worth means you owe more than you own. It's common early in life — student loans and a new mortgage often outweigh starter savings. Focus on paying down high-interest debt and building emergency cash to turn the number positive.
How often should I calculate my net worth?
Once a quarter is plenty for most people. Checking too often invites noise from market swings. A quarterly snapshot shows real trends without the daily distraction.
Does net worth include my mortgage or real estate?
Yes, both — the calculator above has a dedicated real estate field for your home's current market value and a mortgage field for what you still owe. Enter both and it nets them into your equity automatically, the same way it nets any other asset against its matching debt.
Does net worth include a pension?
Usually not the same way as a 401(k) or IRA. A traditional pension (a defined-benefit plan) pays a future income stream rather than holding a lump-sum balance you could withdraw today, so the Federal Reserve's Survey of Consumer Finances generally excludes it from net worth. If your pension has a stated cash-out or lump-sum value, you can add that figure under investments; otherwise, track it separately as future income, not as a net worth asset.
What's a rule of thumb for expected net worth?
One widely used heuristic multiplies your age by your pretax annual income, then divides by 10. The Millionaire Next Door, the 1996 book by Thomas Stanley and William Danko, popularized this formula as a rough gauge of expected net worth. Take a 40-year-old earning $90,000 a year: 40 times $90,000 is $3,600,000, and divided by 10 that's an expected net worth of $360,000. Anyone above that line counts as what the authors called a 'prodigious accumulator of wealth,' and anyone well below it counts as an 'under accumulator.' Treat the result as a loose planning check. It isn't a target to hit exactly. The formula ignores debt load, one-time windfalls, regional cost of living, and career stage. A recent graduate or someone who just bought a house will typically fall short of it, and that's normal at that career stage.
Sources
We prioritize primary sources for rules, formulas, rates, limits, and definitions. See our calculator methodology and editorial policy.