1. What is Net Worth?

Net worth is a financial metric that represents the value of all assets owned minus all liabilities owed. It provides a snapshot of an individual's or entity's financial health at a specific point in time.

2. How Does the Calculator Work?

The calculator uses the simple net worth formula:

Where:

• Assets — Everything you own that has monetary value (cash, investments, property, vehicles, etc.)
• Liabilities — All your debts and financial obligations (mortgages, loans, credit card balances, etc.)

3. Importance of Net Worth Calculation

Details: Tracking net worth over time helps measure financial progress, assess financial health, and make informed decisions about saving, investing, and debt management.

4. Using the Calculator

Tips: Enter all your assets and liabilities in USD. Be thorough and include all items for an accurate calculation. Update regularly to track changes over time.

5. Frequently Asked Questions (FAQ)

Q1: What counts as an asset?
A: Assets include cash, bank accounts, investments, real estate, vehicles, valuable personal property, and business interests.

Q2: What counts as a liability?
A: Liabilities include mortgages, car loans, student loans, credit card debt, personal loans, and any other money you owe.

Q3: How often should I calculate my net worth?
A: Many financial experts recommend calculating net worth quarterly or at least annually to track financial progress.

Q4: Can net worth be negative?
A: Yes, if your liabilities exceed your assets, your net worth will be negative. This is common for recent graduates with student loans or people early in their careers.

Q5: What's a good net worth by age?
A: While benchmarks vary, a general guideline is to have a net worth equal to (age × annual income)/10 by retirement age.