How to Calculate Your Net Worth

When you are engaged in financial planning, it can be beneficial to know what your net worth is. Here are the basics of how to calculate your net worth.

Assets

The first part of the process involves calculating the value of your assets. You are going to need to spend some time and think about all of the different assets that you have. For most people, the biggest asset that they have is their home. Write down the value of your home and any other positions that you have such as your car, a boat, or a recreational vehicle. You are also going to need to add up the value of any financial accounts that you have such as your bank accounts, investment accounts, and retirement accounts.

Liabilities

After you have tightly the value of your assets, you are going to need to calculate your liabilities as well. You will need to write down any debts that you have. For example, you will want to write down the amount that you still owe on your mortgage and your car loans. 

Calculation

Once you have a value for your assets and your liabilities, you will simply need to subtract your liabilities from your assets to determine your net worth.

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