Net Worth Calculator
Your net worth will help understand where you stand financially at a point in time. Your net worth should be steadily growing as you age.
What is net worth?
In layman’s terms, net worth is the sum of all your assets (things that you own that have a monetary value), minus the sum of all your liabilities (things that you owe like loans and consumer debt).
Knowing your net worth and what it represents is a great way to know where you stand financially. If you are confused about what assets and liabilities are, here are some useful things to know:
Assets: include things that have monetary value like cash, checkings and savings accounts, retirement accounts, as well as things that store value and you could sell for cash like cars, investment and properties.
Liabilities: are all the things you owe to someone else (i.e. person, group, intitution, etc.). Liabilities include things like credit cards, payday loans, personal loans, auto loans. Keep in mind that if you’re counting your home as an asset, its mortgage should be counted as liability.
Lastly, your net worth will vary depending on your age. However, the authors of Millionaire Next Door (Thomas Stanley and William Danko) suggest using the following formula.
Net Worth = (Age x Pre-tax income)/10
Start using your net worth to make smarter money decisions today!