How to calculate net worth

Calculating net worth in finance involves adding up all of your assets and then subtracting your liabilities. To start, you'll want to make a comprehensive list of all of your assets, including cash, investments, real estate, vehicles, and any valuable personal belongings. Then, you'll want to gather information on all of your liabilities, such as mortgages, car loans, credit card debt, student loans, and any other outstanding debts. Once you have a complete list of your assets and liabilities, you can subtract the total amount of your liabilities from the total amount of your assets. The result is your net worth. This number gives you a clear picture of your overall financial health and can be a useful tool for tracking your progress over time. It's important to note that net worth is not the same as income. Your income is the amount of money you earn over a specific period of time, while your net worth is the value of all of your assets minus your liabilities. While a high income can certainly contribute to a high net worth, it's possible to have a high net worth even with a relatively modest income if you have built up significant assets over time. Calculating your net worth can be a helpful exercise in understanding your financial situation and setting goals for the future. It can also be a useful tool for financial planning and making decisions about investments, retirement, and estate planning. By regularly tracking your net worth, you can gain a better understanding of your overall financial well-being and take steps to improve it over time.