Net worth is the market value of everything you own minus everything you owe. List your assets — cash, investments, retirement accounts, real estate, vehicles, business stakes — at what they would sell for today. Then subtract every debt at its current payoff balance: mortgage, car and student loans, credit cards. The result can be negative; the trend matters more than the starting point. Recalculate on a fixed schedule, monthly or quarterly.
The formula
Net worth = total assets − total liabilities.
That is the whole formula. The work is in the inputs: every asset at today's realistic value, every debt at today's balance, all as of the same date. Here is a simple example of one household's balance sheet.
| Item | Value |
|---|---|
| Home (realistic sale price) | $420,000 |
| Brokerage account | $65,000 |
| 401(k) | $88,000 |
| Cash and savings | $18,000 |
| Car (private-party value) | $24,000 |
| Total assets | $615,000 |
| Mortgage balance | $290,000 |
| Car loan | $14,000 |
| Credit cards | $3,000 |
| Total liabilities | $307,000 |
| Net worth | $308,000 |
What counts as an asset
An asset is anything you own that could be turned into money. Value each one at what it would fetch today, not what you paid.
- Cash: checking, savings, money market accounts — at the current balance.
- Investments: stocks, funds, bonds, crypto — at today's market price.
- Retirement accounts: 401(k), IRA and similar. Include them, but remember that taxes and possible penalties stand between the balance and your spending.
- Real estate: a realistic sale price based on recent comparable sales, not the listing price of your neighbor's house.
- Vehicles: the private-party value, which is usually far below the purchase price.
- Business stakes and other valuables: only if you could realistically sell them.
Leave out what cannot be sold: future salary, furniture and everyday items, money you hope to receive.
What counts as a liability
A liability is any money you owe. Use the payoff balance as of the same date as your assets.
- Mortgage and home equity loans
- Car loans and leases with a payoff amount
- Student loans
- Credit cards — the full balance, even if you pay it off every month
- Personal loans, buy-now-pay-later plans, taxes due, money owed to family
Net worth vs. liquid net worth
Two families with the same $300,000 net worth can be in very different positions. If most of it is home equity, it cannot pay this month's bills without selling or borrowing.
That is why a second number matters: liquid net worth — cash, investments and crypto minus the debt secured against them. It shows how much of your capital you could actually use within days. Track both: total net worth shows how wealth grows, liquid net worth shows how much room you have to act.
How your number compares
The Federal Reserve measures American household wealth every three years in its Survey of Consumer Finances. The 2025 results, released on October 9, 2026, show a real median net worth of $215,900, up 2% from 2022, and a mean of $1.24 million.
The mean is pulled up by the wealthiest families, so compare yourself with the median. Age changes the picture sharply: families headed by someone under 35 reported a median of about $33,000, down 23% from 2022, while families aged 75 and older reached $504,900, the highest median of any age group in the survey's history. Homeowners had a median of $458,900, renters $10,600.
The most useful comparison is with yourself a year ago.
Common mistakes
- Purchase price instead of current value. A car bought for $45,000 three years ago is not worth $45,000 today.
- Forgetting small debts. Credit cards, installment plans and tax bills add up.
- Counting the home twice. Include the home's value as an asset and the mortgage as a liability — not "home equity" on top of that.
- Treating retirement accounts as cash. They count, but taxes and access rules apply.
- Mixing dates. A January brokerage statement and a June mortgage balance give a number that never existed.
- Ignoring the cost of holding assets. Two assets of equal value are not equal if one costs $1,500 a month in taxes, insurance and upkeep.
How to do it in AOS
How often to update
Monthly works if you invest actively; quarterly is enough for most households. Pick a fixed day, update every value as of that day and write down where each number came from. Markets move, so single months are noisy — the direction over a year is what tells you whether your decisions are working.
FAQ
Can net worth be negative?
Yes. Students and young professionals often start below zero because of student loans. A negative net worth is a starting point, not a verdict: what matters is whether it rises every year.
Should I include my home?
Yes, at a realistic sale price, with the mortgage listed as a liability. Just remember that a home is hard to turn into cash, which is why liquid net worth is worth tracking separately.
Should I include retirement accounts?
Yes. They are your assets. For a conservative view, you can also look at them after estimated taxes.
What is a good net worth for my age?
The Fed's 2025 survey gives a median of about $33,000 for families under 35 and $504,900 for those 75 and older. Medians describe the population, not a target — your own trend over time is the better measure.
How is net worth different from income?
Income is what comes in over a period. Net worth is what you have at a point in time. A high income with high spending can leave net worth flat; a modest income with steady saving can grow it every year.
Sources
This article is for information only and is not investment, tax or legal advice. Figures are given with their source and date.