Calculating Your Personal Net Worth

Posted on Jan. 12, 2023

IMAGE: Man sitting on couch writing on paperYour net worth is like a financial report card; it can indicate your financial health. It shows how much you are worth in dollars and cents and can help you determine what you need to do to reach your financial goals. Learn what determines your net worth and how to keep it growing.

What Is Net Worth?

Net worth is the combined value of your assets — what you own — minus your liabilities — what you owe. Assets are anything of economic value, like your house, car, or investments, that can be sold and converted into cash. These also include checking and savings accounts, money market accounts, annuities, bonds, retirement or 401(k) plans, mutual funds, pensions, and the cash value of life insurance policies. A liability is something you borrowed money for and are obligated to pay, decreasing your net worth. These include your mortgage, loans, or credit card balances.

How to Calculate Your Net Worth

Start by adding up your assets, but remember that your income isn’t considered an asset. You can use an online calculator to break these down into categories. Next, add your liabilities and subtract the liabilities column from the assets to find your net worth.

To make projections about your net worth, you’ll include the annual growth rate. Some assets have a higher rate, like stocks, but you can use an average to determine your future net worth. Texell’s net worth calculator is set to a default of 7% growth rate, but you can adjust to project your net worth in ten years.

Work to Keep It Positive

You have a negative net worth if your liabilities are more than your assets. Those under 35 years old make up the largest group, as many have student loan debt or have just taken on a new mortgage. Though net worth fluctuates, there are ways to help keep it positive.

As your debt decreases, you’ll be able to shift those funds into maximizing your investments and retirement contributions.

The first step to increasing your net worth is to eliminate debt. Texell recommends the debt snowball method. You can learn more in our article, “Popular Strategies to Get Out of Debt.” As your debt decreases, you’ll be able to shift those funds into maximizing your investments and retirement contributions. Over time, some of your liabilities transform into assets, like your mortgage, as you own more of your home’s equity.

Each step you take to increase your net worth helps you reach your financial goals. Texell offers a variety of financial products and services to help along the way, including certificates of deposit, savings, and IRA accounts. Visit to learn more, or call or text 254.773.1604.


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