Net worth is the only figure that answers how am I actually doing in one line. Income tells you what arrives, spending tells you what leaves, a portfolio tells you how one pile is performing — net worth is the scoreboard all of them add up to.
It is also the number most people calculate exactly once, feel something about, and never look at again. That is the wrong way round: the single figure is nearly meaningless, and the direction it moves in is nearly everything.
The formula
Net worth = everything you own − everything you owe.
That is the whole thing. The arithmetic has never been the hard part. The hard part is that the inputs live in five different places, so keeping the total current means copying balances into a spreadsheet once a month until you quietly stop.
What counts as an asset
Use what you could realistically get for it today, not what you paid:
- Cash and savings — checking, savings, money market, cash in a brokerage account.
- Investments — brokerage accounts, index funds, individual stocks, crypto, bonds.
- Retirement accounts — 401(k), IRA, Roth, workplace pension pots. Count them at full balance. They are yours; the fact that you cannot spend them yet is a liquidity issue, not an ownership one.
- Property at current market value, not the purchase price.
- Vehicles at realistic resale value, not what the dealer told you it was worth.
- Other real assets worth listing on their own line — a second property, a business stake, a valuable collection.
What does not belong: your future salary, an unvested bonus, the money a client owes you if you have not invoiced it, and the contents of your kitchen. If turning it into cash is speculative, leaving it out keeps the number honest.
What counts as a debt
Every balance you owe, at today's payoff figure:
- Mortgages and home equity loans
- Auto loans
- Student loans
- Credit card balances — the full balance, not the minimum payment
- Personal loans, medical debt, tax owed, anything financed at 0%
A 0% financing plan still counts. You owe the money; the interest rate only decides how expensive it is, not whether it exists.
A worked example
Assets:
- Cash and savings — $12,400
- Brokerage and retirement — $84,000
- Home, current market value — $340,000
- Car, resale value — $14,000
- Total: $450,400
Debts:
- Mortgage — $278,000
- Student loans — $19,500
- Credit cards — $4,300
- Auto loan — $9,200
- Total: $311,000
Net worth: $139,400. Notice how little of it is available: nearly all of it is house equity and retirement money. That is normal, and it is exactly why net worth alone does not tell you whether you could survive a bad month.
The mistake almost everyone makes once
A mortgaged home gets counted twice: once as an asset at its full market value, and again as equity on another line, while the mortgage still sits under debts.
Pick one shape and stay in it:
- House at market value as an asset, mortgage as a debt — or
- House equity only (value minus loan) as an asset, and no mortgage line at all.
Both give the same answer. Mixing them inflates your net worth by the size of your mortgage, which is not a rounding error.
Two things move net worth, and their roles swap over time
Money you add, and growth on what is already there. Which of the two is doing the work changes dramatically with time. Saving $500 a month at a 7% annual return:
- After 5 years — $35,796 total, of which $5,796 is growth (16%)
- After 10 years — $86,542 total, $26,542 growth (31%)
- After 20 years — $260,463 total, $140,463 growth (54%)
- After 30 years — $609,985 total, $429,985 growth (70%)
Early on, you are the engine — the market's contribution is a rounding error next to your deposits. Later the balance flips and the growth does more work than you do.
The practical consequence: in the first years, judge yourself on what you added, because that is the only part you control. Watching the market in year two is watching 16% of the story.
Paying off debt barely moves net worth — and that is the point
Move $400 from your checking account to your credit card and your net worth does not change: cash drops $400, debt drops $400. Nothing happened on the balance sheet.
What does move it is interest. Clearing a $12,000 balance at 22% APR at $400 a month takes 44 months and costs about $5,600 in interest — and that $5,600 is pure net-worth destruction. Every dollar of principal is a transfer; every dollar of interest is gone.
This is why the balance sheet is worth keeping next to a budget. A budget shows the payment. Net worth shows which part of it was actually yours.
Where you stand, if you want a benchmark
The Federal Reserve's Survey of Consumer Finances is the primary source for US household wealth. Median family net worth in the 2022 survey, by age of the head of the family:
- Under 35 — about $39,000
- 35–44 — $135,600
- 45–54 — $247,200
- 55–64 — $364,500
- 65–74 — $409,900
- 75+ — $335,600
Read those carefully before you feel anything about them. They are medians for whole families, heavily driven by home equity and retirement accounts, in 2022 dollars — so a 30-year-old renter with no mortgage is not comparing like with like. Use them as a horizon, not a scoreboard.
Track the components, not just the total
Once a month is the right cadence — often enough to see a trend, rare enough that market noise does not dominate it.
Record each part separately: investments, cash, property equity, other assets, debts. A year later the useful question is never what was my net worth in March, it is why did it jump in March — and that cannot be reconstructed from a single number after the fact.
Two honest consequences of doing it this way:
- History starts when you start. There is no way to rebuild last year from today's balances, so do not wait for a tidy moment.
- The trend needs about six months before it means anything. Before that you are looking at your first two data points and a house valuation you guessed at.
Doing it without the spreadsheet
The Net Worth Calculator gives you today's number in one screen — a simple mode with two boxes, or a detailed mode with cash, investments, property, vehicles, mortgages, loans and cards on their own lines. When you are done, one button sends those accounts into the tracker as real accounts, so the snapshot you just made becomes the first point on a line.
The Net Worth Tracker then keeps it current by reading rather than storing: investments come from your portfolio at market prices, property equity from your properties minus their loans, balances from your debts. Only cash and outright-owned assets are stored there, because nothing else in the product knows about them. Change a holding and net worth has already moved — there is no second copy to keep in sync.
If your investments are the biggest line on the sheet, the Portfolio Tracker is what keeps that line honest between snapshots.
Frequently asked questions
Does my house count toward net worth? Yes — at its current market value, with the mortgage listed as a debt. Just never count the house at full value and its equity as separate assets, or you double-count it.
Do retirement accounts count? Yes, at their full balance. They are assets you own. Being unable to withdraw without penalty affects your liquidity, not your net worth, which is why a separate look at cash and investments is worth keeping.
What is a good net worth for my age? There is no threshold that means you are fine. The Federal Reserve medians above give you a rough horizon, but they are dominated by home equity and vary hugely by region and household size. Your own trend over a year is a better signal than any percentile.
How often should I calculate it? Monthly. Weekly turns market noise into a mood, and yearly is too coarse to catch a habit going wrong.
What if my net worth is negative? It is extremely common after student loans or early in a mortgage, and it is not a verdict. The number that matters is the direction — a negative net worth climbing $800 a month is a working plan.
Should I count my car? Count it at realistic resale value if it is worth a meaningful amount, and put the auto loan under debts. Skip small depreciating items entirely; the effort is not worth the accuracy.
Get your first data point today
Run the Net Worth Calculator, send the accounts to the Net Worth Tracker, and let it take a snapshot every month from here. The number you get today is not the useful part. The line it starts is.