How to Calculate Your Net Worth

How to Track Your Net Worth, the Easy Way

Have you ever googled “(enter celebrity name) net worth”? You don’t need to lie; we’re all friends here. Few could deny there’s something perversely satisfying about guessing how much money prominent figures have, but net worth tracking isn’t just about bemoaning or admiring the rich and famous. It’s a fundamental tool for financial management. 

No matter how high or low your net worth happens to be, you need to know what you’re working with so you can evaluate where you are now and make plans for the future. 

To help you get there, we’ll cover:

  • What net worth is
  • Common confusions 
  • Why knowing your net worth matters
  • How to calculate your net worth
  • Using an automatic net worth tracker

There’s a lot to cover, so let’s jump right in.

What is net worth?

Your net worth is simply the sum of all your assets minus your liabilities. If you’re still scratching your head or you’re not sure if you have any assets or liabilities, hang in there — you probably just need some examples.

Assets include a wide variety of items, including:

  • Cash savings
  • Investments in stocks, cryptocurrencies, other financial products 
  • Jewelry, physical gold, precious metals
  • Real estate
  • Other valuable items like clothes or cars
  • Valuations of businesses

Some of the items above are easy enough to get your head around, like stocks, but others (such as business valuations) are a little bit more tricky. Don’t worry about that too much at this point — we’ll explain more about this later when we discuss how to calculate your net worth.

Examples of liabilities include:

  • Credit card debt
  • Student debt
  • Mortgage
  • Other types of debt, like personal loans or auto loans

Many people aren’t accustomed to accounting for their liabilities or considering assets like jewelry or cars when figuring out how much money they have. Most of us just think about how much we have in our accounts. 

This is why getting a proper idea of your net worth is such a powerful tool.

Are net worth and equity the same?

You might also have come across equity. Shareholder’s equity is the difference between total assets and total liabilities; it gets its name because it’s what shareholders would receive if a company was liquidated.

So, is it the same as net worth?

Not exactly. We’re talking about the net worth of individuals here, whereas shareholder’s equity concerns firms — you can think of it as company net worth.

Is net worth liquid?

Net worth typically encompasses all kinds of assets, whether they’re liquid or not.

However, liquid net worth is a separate measure that some people might prefer to focus on. This excludes everything that is non-liquid, like real estate, money in retirement accounts (unless you’re able to withdraw it immediately), and physical items like jewelry. As a general rule, if you can’t convert it to cash in a day, it’s not liquid.

Can net worth be negative?

Yes, net worth can be negative. If you’ve ever tuned into the Dave Ramsey show, you’ll be all too aware of callers with up to $1,000,000 (yes, really) of student loan debt who need urgent help paying it off. Bizarrely, it’s not unheard of for former millionaires to suddenly go bankrupt and have a negative net worth either.

Up to one in five households in the US have a negative or zero net worth (and when you see how a net worth is calculated, you’ll understand why). That leads to the next question: what’s a zero net worth?

Can net worth be zero?

Having a zero net worth basically means that you’re just about treading the water with your finances — you don’t have anything to spare, but you’re not in debt either. 

Technically, this is possible, although in practice, you’re more likely to have either a positive or a negative net worth at any given moment, even if you’re fluctuating between.

Why your net worth matters

Your net worth is essentially a reflection of how much money you have, and you don’t need us to tell you why wealth is important — it’s the very thing that’s going to give you a comfortable life.

So, given we can all agree that money matters, it’s only a slight extension to say that it’s also essential to know your net worth and keep track of it over time.

Many people normalize the idea of having debt and making minimum payments, but realizing you have a low net worth can be a wake-up call to start attacking your loans more aggressively and changing your spending habits. 

Knowing your net worth also helps you compare yourself to where you are in comparison to your peers. While excessive comparison can be a fast track to self-esteem problems, it can be a useful way to determine if you’re on track for life’s milestones.

If you’re prepared to do some calculations, you can also be more specific about your goals. For instance, if you know how much money you need to retire, you can use your current net worth as a tool for figuring out when it will be viable for you to quit your job.

How to calculate your net worth

Now you have a basic understanding of how net worth works and why it’s important, we can get to the most practical part of this article: calculating your own net worth.

At first glance, calculating your net worth might seem simple enough. All you have to do is add up the value of your assets and your liabilities — right? Technically, yes, but things aren’t always that simple.

Why net worth can be misleading 

It’s not just the number itself that matters — it’s the story behind the number.

Someone who has $100,000 in student loans but is a qualified doctor could have a negative net worth temporarily, but their earning potential means that they could easily make enough to pay that off — and still end up with an impressive net worth.

Also, in practice, it’s probably better for most people to have $20,000 of debt and $10,000 of savings than $10,000 of debt and no savings. Even if these two people have the same net worth, the first one is more cushioned from any problems. They may even be choosing to pay back their loans more slowly for strategic reasons.

But these minor problems aren’t the only reasons net worth can be deceiving.

Calculation problems for net worth

It’s easy enough to figure out your net worth when you only consider liquid assets. This way, you only have to figure out the total value of all your accounts, and you’re golden. But when it comes to non-liquid assets, things get a little more complicated. 

Say you own a house. You might know how much you bought it for originally, but you don’t know how much it’s worth right now. Even if you ask a real estate agent, they might give you an over-optimistic estimation that distorts your net worth. 

This also applies to businesses, brands, and even social media channels — everything has a numerical value, but it’s tough to get an accurate figure.

Even the values of assets that are easier to calculate, like stocks, aren’t necessarily reliable. Maybe you check your net worth for the first time when the stock market has just crashed, meaning that your portfolio looks lower temporarily. 

As we said already, it’s about the story behind the numbers.

Making the best of a bad situation

In addition to the problems above, many people struggle with keeping track of their portfolio if they have lots of different investments and accounts. Opening a few savings pots and investing in a few cryptocurrencies or stocks here and there can easily become dozens of accounts. It’s time-consuming to log into them all and plug the values into your calculator.

So yes, calculating your net worth isn’t as easy as it first seems. Especially if you are well diversified.

Fortunately, the right tools make the process easier. 

Using Money Minx as a net worth calculator 

Dedicated applications can connect to all your accounts and automatically calculate your net worth in real-time, saving you a job. Yet most tools designed to link to your accounts and calculate your net worth have a serious flaw: they’re only compatible with a select number of traditional financial institutions. 

This makes it hard for a lot of people to get a full picture of their net worth in a world filled with alternative investments like cryptocurrencies or crowdfunding, never mind their liabilities.

Money Minx is different. It connects to more than 21,000 accounts from various countries in addition to mamy various modern investment vehicles (from domains to crypto wallets).

To do this, simply, navigate to the net worth tab of the website.

From there, using Money Minx as a net worth calculator is easy. You can sign up in a matter of seconds and start working out your net worth for zero cost.

First off, connect all your accounts (yes, all of them). Once connected, they’ll stay integrated, so you can refer back to the dashboard and your net worth as often as you like.

In addition to these connected accounts, you can add assets manually — great if you have physical assets that you’re not holding in a digital account, like jewelry or even cash.

Once you’ve connected everything together, the magic can happen.

The net worth calculator

On the left-hand side of the screen, you’ll be able to see a breakdown of the numbers that make up your net worth, investment assets, other assets, and liabilities. Hopefully, your net worth is looking more promising than our example of a whopping $142!

Even more powerfully, the light purple rectangle above encompasses future projections based on the data Money Minx has collected so far. You can’t fully appreciate this without a complete data set, but it’s a great tool for figuring out if you’re likely to meet future goals — and you can go as far in the future as you wish.

Once your accounts have been connected for a while, you’ll also be able to see how your net worth has changed over time — both as a chart (above) and a breakdown of the numbers (below). 

In the picture below, we also added some liabilities, so you can see what it looks like to have a negative net worth. Not pretty.

Net worth comparisons 

As we mentioned earlier, comparing yourself with your peers can be a useful tool to know where you are and what you should be aiming for (as long as you use it wisely). 

Money Minx facilitates this with its comparison section, which lets you see the net worth and asset breakdown of users with a similar account to you.

Clearly, we’re faring significantly worse than our peers in this example. How about you?

Don’t stay in the dark

So, there you have it — you don’t need to spend hours doing logging in to all your accounts to find your balances and then doing manual calculations to figure out your net worth. You can simply connect everything you own to an account that will do it for you, while also offering a whole host of other features that help you understand how to better reach your money goals.

Or, you could choose to remain in the dark and face the consequences of not knowing whether you’ll meet important future goals. The choice is yours.

You can get started on Money Minx for free and still connect unlimited accounts and access all the features we’ve examined here. Or, if you upgrade to Pro for just $15 a month, you can also see your net worth in different currencies, sync your crypto wallets, and manage real estate leases and mortgages — and then some.

Why not give it a go?

Sarah Bromley is a personal finance and fintech writer based in the U.K.

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