What Is Net Worth?
If you added up the value of everything you own and then subtracted the total of all your debts, the money leftover would be described as your net worth.
Knowing your net worth can give you an idea of your financial independence and stability.
That said, there's no need to obsess over your net worth, or to feel bad if the number is smaller than you'd like. Your net worth can be impacted by factors outside your control, such as stock market volatility or economic uncertainty.
Knowing your net worth is more of a long-term money management strategy; it's a data point to keep in mind as you plan your next financial move.
It’s a good idea to calculate your net worth once a year. By doing this, you can see how your money has performed in the past and then decide what to do in the future. It’s perfectly normal for your net worth to fluctuate since the value of your assets may change, but in an ideal world, it would continue to go up over time.
How to calculate net worth
To calculate your net worth, you must first make an inventory what you own (your assets) and what you owe (your liabilities).
Once you have a general idea of those two numbers, you can follow this basic formula:
Assets – liabilities = Net worth
Note that this formula does not include income. Sure, both active and passive income helps your cash flow, but a high salary does not automatically translate to a high net worth. Someone with a modest wage could easily have a high net worth by diligently saving and investing money.
These are the assets to include in your net worth
Include anything of value that you own, such as:
Cash on hand, including the funds in your chequing or savings accounts.
The value of any RRSPs in your name.
The value of any TFSAs in your name.
Any non-registered savings and investments, like mutual funds.
Your employer pension plans.
Any registered education savings plans that have yet to be paid out.
The current market value of any real estate you own.
The current market value of any vehicles you own.
The value of any other valuables you may own, such as jewelry or art.
The current market value of any investments.
Net worth liabilities
Liabilities include anything you owe, such as
Student loans.
The outstanding balance on your mortgage.
Auto loans.
Lines of credit.
Any other loans.
How does your net worth stack up?
The Canadian government does regular surveys of financial security, measuring the total and median net worth of households of different sizes, and in different areas. In the table below, you can see some of the national numbers, broken down by age.
As of 2023, the median net worth of Canadian economic families (two or more persons) was $712,900.
Overall, the net worth of Canadian families has increased by 44% since 2012.
Real estate is both the largest asset and debt for Canadians. Families that rent, younger families, single parents, renters and non-attached seniors typically have a lower net worth than those that own their home.
Median net worth by age in Canada
2012 | 2016 | 2019 | 2023 | |
|---|---|---|---|---|
Economic families and persons not in an economic family | $314,700 | $361,000 | $381,100 | $519,700 |
under 35 | $32,600 | $43,000 | $56,400 | $159,100 |
35 to 44 | $235,600 | $268,600 | $270,800 | $409,300 |
45 to 54 | $488,400 | $528,700 | $602,000 | $675,800 |
55 to 64 | $688,900 | $819,200 | $797,000 | $873,400 |
65 and older | $594,600 | $632,600 | $627,500 | $738,900 |
Source: Statistics Canada
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