Invest Financial Planning

How To Calculate Total Assets And Your Net Worth

Amanda Steinberg  |  February 14, 2024

Do you know how to calculate your total assets? How about your net worth? The key to financial success is knowing both those numbers.

When it comes to your finances, do you know how to calculate total assets? How about your net worth? Popular finance articles for women often cover how to budget and boost your salary. So, the key to financial success is earning more income and being frugal. Right?


Learning how to earn more and cut back are only pieces of the bigger picture. More income makes certain things easier, but it also creates new temptations and complexities. Austerity alone restricts our sense of possibility.

So, what is important? So important that your entire financial security depends on it? No one is talking about it, so I’m going to level with you.

READ MORE: The Best Budgeting Apps

One term: Net worth. Say it out loud. Write it 100 times on the chalkboard. Tattoo it on your brain.

Why? Financially, your net worth is your real, overall financial position. It’s the bottom-line sum when you add up what you own and subtract it from what you owe. 

Next up: How to calculate total assets and determine your net worth. 

How To Calculate Total Assets, AKA Your “Roots”

When I was a teenager, my mother told me that to navigate life successfully I needed “roots and wings”: foundational values and principles (roots) and the confidence to take calculated risks, so I could grow (wings).

In the context of your financial well-being, roots are assets: your 401(k), IRA, real estate, stocks and bonds, or even a business you own  (and in some cases, art, jewelry, and other valuables).

Your assets help secure your net worth because they are hard to uproot. They’re not easy to cash out, and if you do, the financial hits can be huge — from taxes, down market losses, and more.

Your assets might not look like much to start. Give them time. Fund them steadily. Just let them grow. Over the years, solid assets can multiply in value, compounding your earnings. The value of your net worth depends on the health and growth of your assets — like trees depend on their roots to keep growing.

A Real-Life Example: How To Calculate Total Assets, Determine Net Worth

Let’s take a look at some numbers so you can see net worth in action. Take the following example of Hannah. She has a college education, works in a downtown Seattle office, and owns her apartment. 

Residence: $500K
Emergency fund: $2K
Retirement savings 401(k):  $30K
= $532K

Mortgage:  $400K
Credit card debt: $15K
Student loan: $100K
= $515K

$532K – $515K = $17K

Hannah’s net worth is positive. It is small relative to the investment she made in her home and education. But she will pay off her mortgage over time (which will decrease her debt), her college degree should produce better career income, and her 401(k) will grow decade over decade.

She also has a few things to watch out for. In the short term, her emergency fund is on the low side. She needs to get it to $5,000 ASAP. That’s her safeguard against debt and curveballs, especially as a property owner, for whom unexpected expenses are the norm.

Long-term, Hannah needs to stay engaged. If she’s not careful, the cost of maintaining her home could offset its value. Her lifestyle could add to her credit card debt, and her 401(k) could remain underfunded. If she doesn’t make strategic career moves, her earning power might not translate into the income she’ll need.

Even though Hannah has a relatively low net worth, she has a good chance of increasing it, as long as she makes clear, conscious choices in her day-to-day living and her long-term planning.

The size of your net worth right now — or even whether it’s positive — isn’t as relevant as the direction you’re moving in. You just need to keep moving in a positive direction. Stay engaged.

Have you calculated your net worth? How’d it go? How are you planning to grow it?


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