Net Worth Methodology

Definition

Net worth is the fair-market value of your assets minus the payoff value of your liabilities at a point in time.

Assets we include

• Cash and cash equivalents (checking, savings, money market, CDs).
• Investment accounts (taxable brokerage, retirement accounts at vested value).
• Real estate at conservative fair-market value.
• Vehicles at conservative private-party value (optional — many people exclude).
• Business equity at a defensible valuation.
• Other meaningful assets (precious metals, collectibles) at conservative value.

Liabilities we include

• Mortgage balance, HELOC, second liens.
• Auto loans, student loans, personal loans.
• Credit card balances and BNPL plans.
• Tax debt and other obligations.

Liquid vs. total net worth

We often distinguish liquid net worth (cash + marketable investments − short-term debt) from total net worth. Liquid net worth is a better measure of short-term resilience.

Valuation cautions

• Home value should be conservative; transaction costs to sell are real.
• Retirement account values are pre-tax unless explicitly adjusted.
• Private business equity and illiquid assets should be valued conservatively.

Educational, not advice

Net-worth calculations on CalculatingWealth.com are educational. They are not appraisals, audits or financial statements.