Q:

How do you figure your net worth?

A:

Quick Answer

Net worth consists of an individual's assets, including cash and real estate holdings, minus their liabilities, which might include credit card debts, mortgages or loans. To calculate individual net worth, begin by adding up all assets, including current savings, retirement accounts and personal property. Then, subtract any money owed, such as student loan debt or lines of credit. The amount left is considered the net worth.

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Full Answer

An individual's net worth may be constantly in flux due to investments, the housing market, or their spending habits. For example, the value of a retirement account, money market account or credit card may change from day to day, impacting overall net worth. Additionally, a sudden change in the housing market could translate to a significant shift in an individual's net worth, especially if their house becomes worth less than the amount owed on the mortgage.

There are many free online calculators available to determine net worth, including the calculator on Bankrate.com. These tools allow users to enter information about real estate holdings, cash on hand and automobiles, along with current debts that have an impact on net worth. Using these calculators, users can also project their estimated future net worth based on market fluctuations.

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