If you want to find out your net worth and wealth add up your liabilities and assets in the calculator.
What is net worth?
An individual’s net worth is equal to the total value of all assets which he/she owns or possesses. Quite simply, subtract all your liabilities (including obligations, debts) from all your assets then the net worth is the difference between what is own and what is owed. By using the net worth calculator, you can find whether your net worth declines or inclines in the coming years. But before calculating your net worth, you need to understand the following terms given below;
Positive Net Worth:
If your liabilities or debts are less than your wealth, your net worth will be positive.
Negative Net worth:
On the opposite side, you will have a negative net worth if your liabilities will exceed assets.
What are liabilities?
Any amount of money, cash, or wealth which a person owes to some other person falls under the category of liabilities. The case is the same when a person has a debt in banks. For example, loan balances, autos, home mortgage, as well as jewelry which are owed in banks, etc.
What are assets?
Assets include all your money, cash, or wealth that you owned yourself personally. Assets include all your things which you can sell when required to, for example, all your cash amount, credit cards, debit cards, vehicles, personal balance, jewelry, your home, property, personal buildings, investments, home, etc.
Assets have further two more types; liquid assets and solid assets.
Liquid assets are those which you could sell in return for cash. On the other hand, all kinds of assets which you could sell also fall under the category of fixed or solid assets.
For example, if you are willing to take out a home equity loan or want to sell your home. Your home, therefore, counts as your net worth.
Some definitions related to your Net worth:
Understand the terms given below before calculating your net worth. These values help you to find your net worth easily.
Life Insurance:
Life insurance has various forms. More specifically, it is in the form of cash. So, if you have life insurance in the form of cash value, you can calculate your net worth by simply putting your total value here which you owe. But make sure this is not the amount you would get if you were paid out by the policy.
Annual growth of Liabilities:
Enter your annual asset values in the calculator which you expect in the whole year whether it would be increased or decreased and find out what will be the value of your annual assets.
Annual growth of Liabilities:
Similarly, to find out the annual growth of liabilities, enter your annual expenditures or liabilities values in the calculator which you expect in the whole year whether it would be increased or decreased, and find out what will be the worth of your annual liabilities.
Home:
If you own a personal home, you can find out the net worth of it. Before calculating your net worth, make sure to find out what is the current value or worth of your home in the market. Sometimes, the current market value of your home would be significantly higher than the original amount which you purchased so, this can be a great asset for you.
Related Properties:
You can also determine the net worth of your related properties which you own yourself, like your personal commercial properties including shops, buildings, commercial lands, undeveloped lands, as well as rental houses.
Just like homes, put your current market price of any one of these properties and subtract it from the original price at which you bought them. Not surprisingly, it would be much higher than the original purchase.
Investment in jewelry:
If you have any kind of jewelry item, like gold, diamond, silver, any precious gems, stones, or metals for a couple of years in your possession, you can find out its current worth. All these kinds of things are very beneficial for us in the future because we all know this kind of thing is becoming increasingly valuable as time goes by. So, you can find the current worth of these investments by subtracting it from the amount which you purchased.
Autos:
You are valuing all of the automobiles that you own. The increased value of your motos is highly appreciated in the future as their amount increases as time goes by. Remember one thing, only include your owned cars or automobiles. Leased vehicles or cars do not come under this category.
Bonds and treasures:
Any kind of bonds or treasures in your possession come under the category of your assets. Put the current worth of bonds (it may include any commercial, municipal, or treasures) and find out the net with. Furthermore, if you have money in other currencies you can also calculate in your currency by simply converting it. The number would be high in an appreciable way.
Household Items:
Add your household items and goods and find out your net worth. Household items include electronics (like Fridge, Tv, oven, cooking range, air conditioner, machines, etc), Household furniture, precious household crockery items, etc.
Pensions and retirement accounts:
If you are a pensioner or a retired person, the current total money in your retirement account would be your savings worth and you can find out easily and add up in your net worth.
Bank account savings:
All your saving accounts, cheques balances would be calculated by simply putting in the calculated after adding up all. You can also add any form of cash which you have.
House mortgage or lender:
Your mortgage balance as of today is represented by this number. If you wanted to own your home free and clear, this is how much you would have to pay.
Other kinds of mortgage:
If you have other mortgages on property, this would be an indication of the current principal balance. In this category, you will find mortgages on rental properties, undeveloped land, commercial properties, and other forms of real estate.
Vehicle’s loan:
You currently owe the following amount on your auto loans.
Credit card debts:
The total amount owed on your credit cards. Add your credit card debt values and find out the net with value.
How to calculate your Net worth:
You can easily calculate your net worth by simply following this formula: anything which you owned minus anything which you owe. So, it is the bond between owned and owed. Let’s suppose if I have a mortgage on a personal building having a market value of $300,00. And the total loan balance on it was worth $250,000. So, your total net worth will be $50,000. Do remember, you cannot count your monthly income in net worth. As people spend their monthly income to fulfill their requirements. But, if they could save from their monthly income, that would be included in their net. Some people make a big net worth after saving their money in a manageable way.
The formula for calculating your net worth:
Net worth= Assets – Liabilities
Tangible net worth:
In some conditions, the above formula of basic net worth is not sufficient. The people who own intellectual property, some kind of patents or copyrights, need to find out the tangible net worth. Tangible net worth is subtracting the total amount of all of your liabilities from all of your tangible assets.
What is the meaning of the key term “tangible”:
The key term “tangible” means anything which is kept by yourself and can be converted into cash when required. So, tangible net worth is subtracting one’s total debts from the total of all tangible assets which a person possesses like money, investments, all kinds of cash, and debts.
Below is a formula to calculate the tangible net worth of a person:
Tangible net worth= net worth of liabilities – total debts
Or
Tangible net worth= Tangible liabilities – intangible assets
What is the difference between Tangible Assets and Intangible Assets?
As described earlier, assets are anything that you hold, can touch physically, and sell them in return for cash. Assets also include cash, property, jewelry, homes, vehicles, furniture, bonds, credits, etc. So, the difference between tangible assets and intangible assets is that the former includes all those things in your property which you can physically touch, and the latter includes all those things which you cannot physically touch. Intangible assets include copyrights, goodwill, trademarks, patents, and intellectual properties.
Net worth calculator:
The formula for calculating tangible net worth is as simple as basic net worth:
Tangible Net Worth =Total Assets-Intangible Assets-Liabilities
It is important to first determine your net worth of intangible assets as well as your assets and liabilities.
The process of calculating your net worth involves several steps. Before calculating the intangible net worth, keep in mind that if you want to calculate your net worth individually or you want to calculate joint net (with your wife, spouse, or parents) gather all your assets, bank investments, bank statements in one place to minimize the burden. The procedure may take a while when you calculate your net worth for the first time but when you follow the steps again and again and understand the procedure, you will calculate in less than an hour.
Here are the steps you must take:
| Total liabilities | Total Assets | Intangible Assets |
| – | Money or cash investments | Patents, trademarks, copyrights, goodwill |
| Student loans, personal loans, taxes, medical loans, credit card loans, etc | Personal property | Intellectual properties |
| Auto mortgage, home mortgage, loans | Real property | Other IPs |
How to calculate Liabilities?
Calculating all your liabilities is as simple as compared to calculating your assets. The reason is that you receive and note down all your monthly liabilities and expenditures in one place. Moreover, the liabilities are not just random estimates, they are in actual numbers, which are easier to calculate:
Liabilities include all things which you own (secured) including:
- Mortgage
- Car loan(s)
- Home loan
- Rental real estate mortgage
- Vacation mortgage
Now, let’s look at the amount you owe in unsecured debt, including:
- Student loans
- Medical bills
- Personal loan
- Credit card debt
- Taxes due
- Other debt bills
How to Calculate Assets?
Finding the assets is somehow a difficult step to calculate your intangible net worth. So, to avoid any hurdle, start with liquid assets (any kind of cash amount)
- Saving accounts
- Cash
- Treasures
- Deposit accounts
- Marketing accounts
- Bonds
- Mutual funds
- Pensions
- Retirement finds
- Household furniture
- Jewelry
- Rental properties
- Vehicles, cars, etc.
- Second-home
- Home appliances
The sum of all assets makes the total assets that you own.
Total assets= Total Liabilities + Total Intangible Assets + Total Net Worth
In a Nutshell:
In conclusion, the total net is the total of all your possessions, minus your liabilities, intangible assets, like goodwill, copyrights, patents, trademarks, etc. You can calculate your net worth by simply using a paper, a pencil, and a calculator. If you know the right formula, this is the simplest method above all. You can also find out your net worth by using excel spreadsheet programs like MS Excel, Google spreadsheets. But before using any app or calculator to find out your net worth, do it yourself at least one time. Accurately valuing assets is essential to any net worth calculation. The majority of companies and individuals seek professional advice on the valuation of intangible assets.
