How to Calculate Net Worth (And What It Means)

The Net Worth Formula

Net Worth = Total Assets − Total Liabilities

Net worth is a snapshot of your financial position at a single point in time. It's the most comprehensive single number to track financial progress because it captures both what you own and what you owe.

What to Include as Assets

Liquid assets: Checking accounts, savings accounts, money market accounts, cash
Investment accounts: 401(k), IRA, brokerage accounts, HSA balance
Real estate: Current market value of your home(s), investment properties
Vehicles: Current market value (Kelley Blue Book)
Business interests: Your estimated ownership value
Other valuables: Jewelry, collectibles, art (at realistic sale value)

What to Include as Liabilities

Mortgage balance(s)
Car loans
Student loans
Credit card balances
Personal loans and lines of credit
Medical debt
Any other money owed

Average Net Worth by Age (2026 Estimates)

According to Federal Reserve data, median net worth by age in the U.S. (approximate 2026 figures):

Under 35: ~$39,000 median / ~$183,000 mean
35–44: ~$135,000 median / ~$549,000 mean
45–54: ~$247,000 median / ~$975,000 mean
55–64: ~$364,000 median / ~$1,566,000 mean
65–74: ~$410,000 median / ~$1,794,000 mean

Note that mean (average) is pulled up dramatically by high-net-worth individuals. Median (middle value) is a more representative target for most Americans.

Liquid Net Worth vs Total Net Worth

Liquid net worth excludes illiquid assets like home equity and retirement accounts with withdrawal penalties. It represents what you could access within a few days. Many financial planners use liquid net worth as a better indicator of financial flexibility — you can't pay rent with home equity if you're cash-strapped.

How to Grow Your Net Worth

Increase assets: Invest consistently in retirement accounts and taxable accounts
Reduce liabilities: Pay down high-interest debt aggressively
Avoid lifestyle inflation: When income rises, increase savings rate before increasing spending
Track it quarterly: What gets measured gets managed

Frequently Asked Questions

Should I include my home in net worth?

Yes, include your home at its current market value (minus selling costs if you want to be precise). Subtract your remaining mortgage balance as a liability. The net result is your home equity, which is part of your net worth. However, track your liquid net worth separately, since home equity isn't easily accessible.

Is a negative net worth bad?

Not necessarily, especially early in life. Many 25-year-olds have negative net worth due to student loans. What matters more is the trajectory — is your net worth growing each year? A negative net worth that's improving is far better than a stagnant one.

How often should I calculate my net worth?

Quarterly is ideal for most people — frequent enough to spot trends, not so frequent that short-term market fluctuations cause anxiety. Use a spreadsheet or app to track it consistently so you can see year-over-year progress.