Net Worth Calculator: What Is My Net Worth?

Net worth calculator

There's value in knowing your worth

If you didn't know your net worth before today, you're not alone. Plenty of people don't know their net worth, or don't understand what net worth even is.

"No one wants to admit they don’t know and we’re all afraid of asking the questions we think we’re supposed to know already," Valerie A. Rivera, a certified financial planner and founder of FirstGen Wealth, said in an email interview.

"So instead, everyone stays quiet, sitting in the dark together, thinking they’re the only one," she said.

Let's fix that.

Net worth is assets minus liabilities. Or, you can think of net worth as everything you own less all that you owe.

Here's how to run the numbers

To calculate your net worth, take inventory of what you own, as well as your outstanding debt. And when we say own, we include assets that you may still be paying for, such as a car or a house.

For example, if you have a mortgage on a house with a market value of $200,000 and the balance on your loan is $150,000, you can add $50,000 to your net worth.

Your income is not included in a net worth calculation.

"You don’t need a high income to have a positive net worth," Rivera said. "What matters more is spending less than you make, and investing the difference.

"I’ve seen couples earning $500,000 a year with negative net worth because they’re spending $525,000 and racking up credit card debt. Income doesn’t automatically translate to wealth."

On the other hand, even people with modest incomes can accumulate significant wealth and a high net worth if they buy appreciating assets and are prudent savers.

Assets and liabilities explained

If you’re not sure what constitutes an asset or a liability, here are some guidelines:

Assets: Assets include cash, such as in your checking, savings and retirement accounts. That includes all 401(k)s and IRAs. Investments that you could sell for cash, such as stocks and bonds, are also included. These are often referred to as liquid assets.

Some fixed assets can count toward your net worth calculation, too, provided you can or would sell them if needed. For example, your home would count toward your net worth if you’re willing to use it for a home equity line of credit or sell it should the need arise.

Liabilities: Any money you owe to another person or entity falls under this category. That includes revolving consumer debts — such as credit card balances — as well as personal, auto, payday and title loan balances. If you’re using your home as an asset, its mortgage counts as a liability as well.

The bottom line

People don't walk around with their net worth statements in their hands, Rivera said. Because wealth isn’t about what you can show off.

That person you see driving a 12-year-old car? They could have a $4 million investment portfolio, she said.

If you want to grow your net worth, spending wisely and saving and investing regularly can have a big impact, she said. So she encourages people to avoid analysis paralysis and just get started.

"Some clients believe they need to understand everything perfectly before taking action," she said "But waiting too long to invest often delays the compounding that actually drives net worth over time."

» MORE: See the average net worth in the U.S., and how you can build yours