How to calculate your actual net worth

Here’s a deep dive into how to calculate individual net worth, and some of the factors that may influence our perception of wealth.

How to Calculate Individual Net Worth

An individual’s net worth is the value of all of their combined assets minus any liabilities (that is, outstanding debts).

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If your assets are worth more than your liabilities, you have a positive net worth. If you owe more than you own, your net worth is negative.

What Is the Difference Between Net Worth and Income?

Net worth and income don’t necessarily go hand in hand. Income is the money that is reported on a tax return, while a high net worth results from owning valuable assets.

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High net worth could be a result of careful saving, inheriting money, or hanging onto highly appreciated assets.

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