How to calculate your net worth
Net worth is a single figure: everything you own, less everything you owe. The arithmetic is simple. The discipline is in counting honestly.
The formula
Net worth = total assets − total liabilities.
Step 1: list your assets
An asset is something you own that has a market value you could reasonably realize.
- Cash in checking and savings accounts
- Brokerage, retirement (401(k), IRA) and other investment accounts
- Property, at a realistic market value rather than the price you paid
- Vehicles, at current resale value
- Business ownership or other holdings, if you can value them with confidence
Step 2: list your liabilities
A liability is anything you owe.
- Credit card balances
- Mortgage and home equity loans
- Student, auto and personal loans
- Any other money owed, including taxes due
Step 3: subtract
Add the assets, add the liabilities, and subtract the second from the first. A negative result is common early in a career, particularly with student loans, and says little about where the figure is heading.
What to leave out
Many people exclude personal belongings such as furniture and clothing, since they rarely resell for meaningful value. Whatever you decide, keep the rule consistent so that changes over time reflect real movement rather than a changing method.
How often to recalculate
Monthly is enough for most people. The trend over months matters far more than any single day. Because balances sit across several institutions, the practical difficulty is collecting them in one place, which is the part MizuFlow automates by reading your linked accounts and recording the total each day.