How Do You Calculate Your Net Worth?
Add the current value of your assets, including bank balances, investments, retirement accounts, and the full market value of any property. Separately add outstanding debts, including the mortgage. Subtract total debts from total assets. Including only home equity and then subtracting the mortgage again would count that debt twice.
How Does Net Worth Differ From Income?
Income measures money received over a period. Net worth measures assets minus debts on a particular date. They answer different questions: a household can have valuable property or retirement savings without much cash available for this month's bills. Net worth alone does not show whether upcoming payments can be covered.
What Is a Good Net Worth by Age?
Age alone does not establish a net worth target. Net worth includes assets and debts across a household, while retirement savings is only one asset category. Published comparisons may use a median or a mean; the Census Bureau explains that very large fortunes affect the mean more. Neither statistic is a personal target.
Frequently asked questions
Should I include my home in my net worth calculation?
Yes, include your home's current market value as an asset and your outstanding mortgage balance as a liability. The difference is your home equity, which contributes to net worth. Use a realistic market estimate, not your purchase price.
How often should I check my net worth?
There is no required schedule. A calculation records your position on a particular date. Comparing calculations made with consistent asset valuations and debt records can show changes over time; a separate cash flow view is needed to understand money available for upcoming bills.