Net worth sounds like something for wealthy people. It isn’t. It’s just what you own minus what you owe.
Knowing it is one of the fastest ways to turn financial worry into something concrete.
What to count
Assets (what you own):
- Cash and savings accounts
- Investments
- The cash or surrender value of insurance policies (not the death benefit)
- Property (at a realistic market value)
- Vehicles (at current value, not purchase price)
- Business ownership, if you can value it reasonably
Liabilities (what you owe):
- Credit card balances
- Personal and salary loans
- Housing loan balance
- Car loan balance
- Informal loans you’ve promised to repay
The calculation
Total assets minus total liabilities equals net worth. It may be a negative number. That’s common, particularly early in a career or after a major purchase, and it isn’t a verdict. It’s a starting point.
The thirty-minute process
- Ten minutes: gather balances from your banking apps and statements.
- Ten minutes: list debts and current balances.
- Five minutes: estimate property and vehicle values.
- Five minutes: calculate and write the number down with the date.
What to look at beyond the number
- Liquid assets vs total. How much could you reach within a week?
- Debt share. What percentage of your assets is offset by debts?
- Concentration. Is most of your wealth in one thing?
- Trend. Is the number rising or falling?
Make it a habit
Do it twice a year, say in June and December. Keep the figures in one note. After two or three rounds you’ll see direction, which matters more than any single result.
What to do with it
Pick one lever: pay down the most expensive debt, increase savings by a small fixed amount, or fill a protection gap. One lever, six months.
Clarity isn’t comfortable at first. It is, however, the only place decisions can start. If your estimate looks wrong, check it against what life insurance actually is to see what counts and what doesn’t.