Net worth is what you own minus what you owe. To calculate it, you add up your assets — cash, investments, retirement accounts, real estate, vehicles, valuable personal property, business interests, and a few less obvious items like cash-value life insurance — and subtract every debt against your name, from mortgages and car loans to credit cards and student loans. What is included in net worth is anything you could sell, withdraw, or convert to cash today; what is excluded is income you haven’t earned yet, benefits you don’t yet control, and property you can’t liquidate. If your assets total $500,000 and your debts total $200,000, your net worth is $300,000. If debts exceed assets, the number is negative, and that simply means you owe more than you currently own.
Assets: What Counts on the “Own” Side
Cash and Liquid Accounts
Start with the easiest items to count. Cash on hand, checking balances, savings balances (including high-yield savings), money market accounts, and certificates of deposit all belong here at their current value. For a CD, use the current balance, keeping in mind that an early withdrawal penalty would reduce what you actually receive. Deposit accounts at insured banks are covered by FDIC insurance up to $250,000 per depositor, per insured bank, for each ownership category.1FDIC.gov. Deposit Insurance Pull the exact numbers from your most recent statements.
Investment and Retirement Accounts
Investment accounts count at their current market value — what they would sell for today, not what you paid. That covers brokerage accounts holding stocks, bonds, mutual funds, and ETFs, plus retirement accounts of every kind: 401(k), 403(b), traditional IRA, Roth IRA, SEP IRA, and any other employer-sponsored or individual retirement plan.2Internal Revenue Service. Types of Retirement Plans Your quarterly or annual plan statement will show the current value.
If you receive equity compensation through work, include vested shares and vested restricted stock units at the current market price. Unvested shares generally do not count, because you forfeit them if you leave before vesting. Vested stock options that are “in the money” have value equal to the current share price minus the exercise price, multiplied by the number of options; unvested options are typically excluded.
Digital Assets
Cryptocurrency and other digital assets are treated as property for federal purposes and belong on your balance sheet at their fair market value in U.S. dollars on the date you calculate.3Internal Revenue Service. Digital Assets Prices move fast, so use a consistent source and note the date. Add positions across all wallets and exchanges.
Real Estate
Real estate is often the largest single line on a net worth statement. Include the current fair market value of every property you own: primary home, vacation properties, rental units, and undeveloped land. Fair market value is the price a willing buyer and willing seller would agree on with no pressure to close. It is not what you paid, and not what you hope it might fetch someday.
You can estimate value using recent comparable sales, online valuation tools, or a professional appraisal. A formal residential appraisal costs a few hundred dollars and gives the most reliable figure, which matters when real estate is a large share of your wealth. Only your equity ends up in the final net worth number, because the mortgage balance is subtracted on the liability side.
Vehicles and Personal Property
Cars, trucks, motorcycles, boats, jewelry, art, and collectibles all count — at current resale value, not purchase price. A five-year-old car is worth much less than what you paid for it, however well you have kept it. Pricing guides and dealer listings give a realistic number for vehicles.
For high-value items like fine art, antiques, or significant jewelry collections, a professional appraisal is the most accurate approach. Fair market value assumes a normal sale with no time pressure; liquidation value — what you would get in a rushed sale — is typically much lower. Most planners use fair market value for net worth, though a modest discount is reasonable if you want a conservative estimate.
Business Interests
Any ownership stake in a business is an asset. Valuing it is the hardest part of most net worth calculations because privately held businesses have no public share price. Three methods are commonly used: the income approach (projecting future earnings and discounting them to present value), the market approach (comparing to similar businesses recently sold), and the asset approach (adding up business assets and subtracting business liabilities, best suited to asset-heavy businesses). Industry rules of thumb produce a rough figure; a certified appraiser produces a defensible one.
Life Insurance Cash Value
Permanent life insurance — whole life and universal life — builds a cash value you can borrow against or withdraw. That cash surrender value belongs in your net worth. Term life insurance has no cash value and is not counted. Check your annual policy statement or call the insurer for the current figure.
Intellectual Property, Royalties, and Annuities
Patents, copyrights, trademarks, and other intellectual property that produces or could produce income are assets. The most common approach is the income method: estimate the future income stream and adjust it to present-day value. Royalty rights from published work or licensed technology have a calculable value on the same basis.
A deferred annuity that has not yet begun paying out counts at its current account value or cash surrender value, which may be reduced by surrender charges if the contract is still in its penalty period. An annuity already making fixed payments has no remaining cash value to withdraw, so it generally is not listed as a separate asset.
Liabilities: What Counts on the “Owe” Side
Secured Debt
Secured debts are tied to a specific piece of property that the lender can seize if you stop paying. Include:
- Mortgage balances, including any second mortgage.
- Home equity lines of credit — but only the amount you have actually drawn, not the full credit limit. A $50,000 HELOC with $20,000 borrowed is a $20,000 liability.
- Auto loans, at the remaining principal.
- Boat, RV, and other loans secured by personal property.
For accuracy, request a formal payoff amount from your lender rather than using the statement balance. The payoff figure includes accrued interest through a specific date.
Unsecured Debt
Unsecured debts have no collateral behind them and reduce net worth dollar for dollar:
- Credit card balances, including any accrued interest.
- Federal and private student loans. Unpaid interest that hasn’t yet been added to principal still represents money owed, and when it capitalizes it increases your total balance going forward.4Federal Student Aid. What Is Interest Capitalization on a Student Loan
- Personal loans from banks, credit unions, or online lenders.
- Medical debt, at the amount currently billed.
- Unpaid federal, state, or local taxes, including balances on IRS payment plans.
Contingent Liabilities
A contingent liability is a debt you may have to pay depending on someone else’s actions. Cosigned loans are the most common example: if the primary borrower stops paying, you are legally responsible for the full balance. Whether to list a cosigned loan on your personal statement depends on the purpose of the calculation. For a conservative view, or when filling out a formal financial statement for a lender, include the cosigned balance as a potential liability to show your full exposure.
What Not to Include
A few things feel like they should count, but don’t:
- Income. Your salary, hourly wages, or freelance earnings are not assets. Net worth measures what you have accumulated, not what flows in each month.
- Future Social Security benefits. They have value, but you cannot sell or transfer that value today.
- Expected inheritances. Until the transfer actually happens, the money is not yours.
- Term life insurance. There is no cash value, and the death benefit goes to your beneficiaries.
- Earning potential. A medical degree or a professional license increases what you can earn, but it isn’t a financial asset with a market value.
The working rule: if you can’t sell it, withdraw it, or convert it to cash today, it doesn’t belong on the statement. Sticking to that keeps your calculation honest and comparable from year to year.
How Taxes Change the Real Number
A standard net worth calculation uses full pre-tax market values. Some assets carry built-in tax bills that would come due on sale or withdrawal, so what you could actually pocket is less than the headline figure.
Money in a traditional 401(k) or traditional IRA has never been taxed. When you withdraw, you owe ordinary income tax on the full amount. A $500,000 traditional IRA is not the same as $500,000 in a regular brokerage account, because a significant portion goes to taxes when the money comes out. Some researchers suggest adjusting retirement account values by your expected future tax rate for a more realistic after-tax net worth.5U.S. Department of Labor. Valuing Assets in Retirement Saving Accounts A Roth IRA or Roth 401(k) holds after-tax money, and qualified withdrawals are tax-free, so the balance more closely reflects its true value to you.
Selling an appreciated home or investment property triggers capital gains tax. For a primary residence, you can exclude up to $250,000 in gain ($500,000 if married filing jointly) as long as you owned and lived in the home for at least two of the five years before the sale.6Office of the Law Revision Counsel. 26 U.S. Code 121 – Exclusion of Gain From Sale of Principal Residence Gains above those thresholds, and gains on investment properties, are subject to capital gains tax.7Internal Revenue Service. Topic No. 409, Capital Gains and Losses Most people skip these adjustments when tracking net worth year to year, which is fine. Near retirement or a major sale, factoring in the tax cost gives you a clearer picture of spendable wealth.
Thresholds Where the Number Matters
Two federal thresholds change how net worth is defined or what it costs you.
Accredited Investor Status
Many private offerings, hedge funds, and venture capital deals are only open to accredited investors. One qualifying path is a net worth above $1 million, individually or jointly with a spouse, with your primary residence excluded from the calculation.8U.S. Securities and Exchange Commission. Accredited Investors The exclusion means home equity does not count toward the $1 million, and the mortgage on that home is also excluded from liabilities — unless the mortgage exceeds the home’s fair market value, in which case the excess counts against you.
Federal Estate Tax
For 2026, the federal estate tax exemption is $15,000,000 per person.9Internal Revenue Service. Whats New – Estate and Gift Tax Estates above that amount pay federal estate tax on the excess. Married couples can effectively double the exemption through portability of a deceased spouse’s unused portion. If your net worth is approaching this level, lifetime gifting, trusts, and charitable donations are among the strategies used to reduce future tax exposure.