What this tool does
Add the current value of listed assets, subtract outstanding liabilities and show a point-in-time net-worth snapshot.
How to use it
- Enter cash, investments, property and other assets at a consistent current value.
- Enter credit balances, loans, mortgage and other liabilities as positive amounts owed.
- Calculate totals and review the categories for omissions or double counting.
Formula and method
Total assets are the sum of all asset entries. Total liabilities are the sum of all amounts owed. Net worth = total assets − total liabilities; the result may be positive, zero or negative.
Worked example
Assets of 10,000 cash, 50,000 investments and 300,000 property total 360,000. Liabilities of 2,000 and 220,000 total 222,000, so net worth is 138,000.
Common uses
- Creating a personal balance-sheet snapshot
- Tracking changes at regular review dates
- Checking how debt repayment or saving changes the total
Limitations
Values are only as accurate as the entries and valuation date. Property and business assets may be hard to sell at the entered value. Taxes, transaction costs, shared ownership, pensions and contingent liabilities may require separate treatment.
FAQ
Should I enter income?
No. Income is a flow over time; net worth uses assets owned and liabilities owed on one date.
How often should I update it?
Use a schedule that supports your planning, such as monthly, quarterly or annually, and keep valuation methods consistent.