What is My Net Worth?

You probably know what net worth means, but do you know what your net worth is? Knowing this number can help you get a better picture of your financial situation. Remember: this number represents one moment in time, as your financial health is always changing.

Simply stated, your net worth is the total of assets minus debts or liabilities. To find this number, use one of the countless online calculators or spreadsheets available. The downside of this method is you need to manually update the values. There are also apps for your phone or tablet, or software for your computer, that can track your net worth. You may even be able to link your accounts so the values are updated automatically.

To begin the process, you will need to gather information on all of your assets and liabilities. Generally speaking, you would not include recurring monthly income or recurring monthly payments, such as utility bills.

Here are some examples of common assets and liabilities.



  • Retirement accounts
  • Brokerage accounts
  • 529 accounts
  • Bank accounts
  • Life insurance cash values
  • Business interests
  • Personal property
  • Real estate (including farmland and rental properties)
  • Mortgages
  • Personal loans
  • Student loans
  • Credit card and other short term liability accounts



After everything is accounted for, add the totals for each column and then subtract the liabilities from the assets. This number isn’t useful on its own, but it can be helpful to track over time. A positive or increasing number can signify good financial health, while a negative or decreasing number could be a sign of trouble. 

Gathering this information can help you in other ways, as well. Many people simply leave their retirement account balance in their previous employers’ plans, leaving multiple accounts to track. Consolidating accounts can relieve some of that burden. When it’s time to take required minimum distributions, having these accounts in one place could help make sure you have taken the required annual withdrawals. In addition, it is much simpler to invest according to your desired risk tolerance with fewer accounts.

On the liabilities side, you may be able to consolidate some of your outstanding debt at a better overall interest rate. This is especially true if you have credit card debt.

The division of assets and liabilities is also important, even for happily married partners. Balancing out the assets owned by each partner may be beneficial from an estate-tax viewpoint. Also remember to regularly check the beneficiaries of all accounts and update as needed.

Even if your net worth is high, beware of liquidity issues. Bank account balances are easy to access when needed, and, generally, so are holdings in brokerage accounts. However, most retirement accounts don’t allow distributions until you obtain a certain age, or there are substantial penalties for doing so. Other assets like antiques and collections may be difficult to turn into cash if needed, especially at the appraised value. Make sure these assets are securely stored and itemized for appraised value on your homeowners insurance. Real estate sales also can take time, and that usually accounts for one of the larger percentages of net worth.

Calculating your net worth is a great start to analyzing your overall financial situation and identifying areas to focus on. As always, we at Heartland Trust are willing to help you put those details together and come up with a financial plan that works for you. 


Jan Nelson, Trust OfficerWhat is My Net Worth?

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