How to Calculate Net Worth: Assets, Liabilities & Benchmarks
Learn how to calculate your net worth step by step. Discover what to include as assets and liabilities, and see how your net worth compares to others your age.
The Simple Formula
Net worth = Total Assets - Total Liabilities. Assets are everything you own that has value: cash, investments, real estate, vehicles, retirement accounts. Liabilities are everything you owe: mortgage, car loans, student loans, credit card debt. The resulting number is your net worth — the true measure of your financial health.
What to Include as Assets
Cash and bank accounts (checking, savings, CDs), investment accounts (brokerage, stocks, bonds, crypto), retirement accounts (401k, IRA, Roth IRA, pension), real estate (current market value of homes), vehicles (current resale value, not purchase price), business equity, valuable personal property (jewelry, art, collectibles over $1,000). Don't include future income or expected inheritance.
What to Include as Liabilities
Mortgage balance (remaining principal), auto loans, student loans, credit card balances, personal loans, medical debt, home equity loans/lines of credit, any money owed to others. Include the current balance, not the original loan amount or total you'll pay with interest.
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Net Worth Benchmarks by Age
According to the Federal Reserve Survey of Consumer Finances, median net worth by age: Under 35: $39,000. 35-44: $135,600. 45-54: $247,200. 55-64: $364,500. 65-74: $409,900. 75+: $335,600. Top 10% benchmarks are much higher. A useful personal formula: target net worth = (Age × Annual Pre-tax Income) / 10.
How to Increase Your Net Worth
There are only two ways: increase assets or decrease liabilities. Actionable steps: increase your savings rate (aim for 20%+), pay off high-interest debt aggressively, maximize employer 401k match (free money), invest consistently in low-cost index funds, avoid lifestyle inflation when you get raises, and track your net worth quarterly to stay motivated.
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Frequently Asked Questions
Can net worth be negative?
Yes, if your liabilities exceed your assets. This is common for young adults with student loans or recent home buyers. A negative net worth isn't permanent — it improves as you pay down debt and build savings. Many successful people had negative net worth in their 20s.
Should I include my home in net worth?
Yes, include your home's current market value as an asset and the remaining mortgage as a liability. The difference is your home equity. Some financial advisors track both 'total net worth' and 'liquid net worth' (excluding home equity) for a clearer picture.
How often should I calculate net worth?
Monthly or quarterly is ideal. Monthly helps you track progress and stay motivated. Quarterly is sufficient for most people. Annual calculation is the minimum to monitor financial health. Use a consistent method each time for accurate trend tracking.