I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
Use this net worth calculator to estimate your net worth and get an insight into your overall financial health.
How to Use This Net Worth Calculator
To use this net worth calculator, provide an answer in every field for the types of assets you own as well as your total liabilities.
The calculator uses the information you provide to help you determine your total net worth.
For example, if you own a house worth $200,000, a car worth $15,000, a bank account with $2,000, and $3,000 in miscellaneous property, your total assets are $220,000.
If you have $30,000 in student loans and $5,000 in credit card debt, then your total liabilities are $35,000. Taking the $220,000 minus $35,000 results in a total net worth of $185,000.
How Do I Calculate Net Worth?
In the simplest terms, net worth is assets minus liabilities. In other words, your net worth is the total of everything you own that has financial value (including investments, property, real estate, furniture, etc.) minus the total of any debts you owe (including mortgage, student loans, car notes, etc.).
How to Increase Your Net Worth
Pay off debt
The simplest way to increase net worth is to decrease your liabilities by paying off debt. Starting with the highest interest rates, you should prioritize paying off debts with compounding interest such as credit cards, personal loans, and mortgages.
Increase your savings
Decreasing your liabilities increases your net worth and your assets. The right balance between paying off debt and increasing savings depends on your financial situation: savings are important for emergencies and large purchases, but debt typically compounds at a faster rate.
Typically, a large reward comes with a large risk. While volatile investments like speculative stock or cryptocurrency are appropriate for investors with a high-risk tolerance, you should minimize investments that are riskier than you can afford.
Invest in assets like real estate and stocks
While compounding debt is the enemy of net worth, compounding assets are the key to wealth. Appreciable assets like real estate and stocks are good ways to improve your net worth over time.
Net Worth Definitions
Net worth: If you were to sell all of your assets at their full value and pay off all of your liabilities, the remaining balance is your net worth.
To calculate net worth, subtract liabilities from assets.
Assets: Anything you own that you could exchange for money is an asset. Assets include real estate, vehicles, stocks, bank accounts, and cash, along with any other property that has value to repay debts.
Liabilities: A liability is any debt you have, whether it’s currently due or not. Mortgages, car loans, student loans, and credit card balances are all examples of liabilities.
Why is net worth important?
Knowing the amount in your bank account and the amount on your paycheck is important, but net worth helps you understand your complete financial picture.