Net Worth Calculator: How To Calculate The Net Worth Of An Individual

What Is Net Worth?

Net worth is the amount of the items you own (assets) minus what you owe (liabilities). Knowing the net worth of an individual is useful in seeing whether you’re on the right track building wealth.

If you have a large negative net worth, it may be time to reassess some of your loans and other spending. The calculator below will let you easily find out what your individual net worth is currently.

Net worth calculator
To calculate your net worth, put the value of your assets and liabilities into the form below.
Assets
Real estate
?
Estimate the current market value of your home and other property you own.
Checking accounts
Savings accounts
Retirement accounts
?
Include 401(k), 403(b), IRA, and other retirement accounts.
Car
?
Current market value estimate for all vehicles you own.
Other
?
Value of all other assets, investments, and accounts not accounted for above.
Liabilities
Mortgages
Consumer debt
?
Total amount owed on credit cards and unsecured debt. (not monthly payment amounts)
Personal loans
?
Total amount owed on loans from family friends, and payday loans. (not monthly payment amounts)
Student loans
Car loans
Other debt
?
Value of all other debts owed. (ex, medical bills, HELOCs, business debt)
Net worth:

How To Calculate The Net Worth Of An Individual

Calculating the net worth of a person involves writing down everything you own into two columns: assets and liabilities. Assets minus liabilities equals your individual net worth. (assets – liabilities = net worth)

What Are Assets?

Assets are items that you own which are valuable. These can include your house, cars, stocks, savings accounts, and retirement accounts to name a few. Assets are items you could sell for cash or are cash.

When calculating the value of an asset, it should be the amount of money you can get in the current market for the item, not what you think you should get. Markets change and sometimes what you paid for an item is not what you can reasonably expect to get when selling. This is especially true for cars.

Related: Can you lose money in a Roth IRA?

What Are Liabilities?

Liabilities are items that you’re financially responsible for. These include your mortgage, car loan, student loans, and other financial debts.

Liabilities are debts that you have in the form of loans. Liabilities lower your net worth so it’s best to get rid of them as soon as you can.

Related: Got debt? Learn how to pay it off fast.

How Much Net Worth Should You Have By Age

According to the 2016 Federal Reserve Survey of Consumer Finances, here are the average net worth’s in the USA based on age:

Age TierAverage Net Worth
Younger than 35$11,100
35-44$59,800
45-54$124,200
55-64$187,300
65-74$224,100
75 and Older$264,800
All Families$97,300
(2016 is the latest study available at the time of publishing this article)

These net worths are the averages for Americans but aren’t necessarily what you should aim for. Americans are known to underfund their retirement savings.

If you’re looking to retire comfortably, your annual cost needed to live varies by state. Once you’ve determined which state you’d like to retire in, you can work backwards to fid out how much you need to save per month to retire.

What Is Tangible Net Worth?

Tangible net worth is your net worth as calculated above but incorporates intangible items into the calculation. Intangible items are intellectual property, copyrights, patents, and other items you can’t physically touch.

Tangible net worth mainly comes into play if you own a small business and are trying to get a loan. Banks often want your real net worth calculation which would not factor in intangible assets.

Calculating Tangible Net Worth

Tangible net worth is calculated by subtracting your liabilities and intangible assets from your assets. (assets – liabilities – intangible assets = tangible net worth)

Tangible vs Intangible Assets

Below I’ll go over some common tangible and intangible assets. Please note that intangible assets are not common when calculating individual net worth. Intangible assets mainly come into play when someone owns a business.

Tangible assets include:

  • Real Estate
  • Personal Property
  • Cash
  • Investment Accounts
  • Retirement Accounts
  • Motor Vehicles

Intangible assets include:

  • Trademarks
  • Intellectual Property
  • Patents
  • Goodwill

Final Thoughts On Personal Net Worths

Knowing your individual net worth is a great starting point for understanding your building wealth. It can be used to determine whether you’re heading in the right direction or if you have a lot of debts weighing you down.

The great news is that if you find yourself with too many liabilities, you can sell those items or find other ways to get out from under them. The simple act of downsizing your house of moving to an area with a lower cost of living can have a significant effect on your net worth.

Related Articles:

Steffa Mantilla round headshot
Steffa Mantilla

Budgeting & Debt Payoff Expert

Steffa is the founder behind Money Tamer. After paying off over $80,000 in debt through budgeting, she now teaches families how to get their own finances in order. Steffa’s background in operant conditioning and behavioral husbandry has given her an understanding of motivation and motivators. She uses this training to help people understand the reasons “why” behind their money behaviors and how to successfully change them. You can learn more about her here.

Leave a Comment

Your email address will not be published. Required fields are marked *