What should you include in your net worth?

Investor.gov defines a net worth statement as what you own minus what you owe. The Federal Reserve likewise describes household net worth as total assets less total liabilities. The hard part is not the formula; it is applying one consistent scope and valuation method.

Choose a calculation date and reporting currency. Include the same categories from one period to the next unless a real financial event or a documented methodology change explains the difference.

Use the current balance of cash, checking, savings, money-market, and similar accounts. Include money held in payment wallets when the balance is meaningful and belongs to you.

Avoid counting cash twice when an app balance is already included inside a broader account total. Keep restricted or unavailable cash labeled so it is not mistaken for money that can be used immediately.

Include brokerage accounts, stocks, funds, bonds, retirement accounts, and other investments at a reasonable current value. Public investments normally use a current market value; private holdings may need a conservative estimate and a visible valuation date.

For a defined-benefit pension without a current transferable balance, avoid inventing a lump-sum value. Track the expected future benefit separately unless a statement provides a present cash or transfer value that fits the chosen method.

The Federal Reserve household balance sheet includes financial and nonfinancial assets such as owner-occupied real estate. For a personal statement, use a reasonable current market estimate for a home, other property, land, vehicles, and other items with meaningful resale value.

Do not automatically list the purchase price. Vehicles and many personal items depreciate, while property estimates can be uncertain. Use conservative, reproducible sources and avoid updating an illiquid asset merely to make the total look more precise.

Include only the ownership share that belongs to the person or household being measured. A recent transaction, formal valuation, cap-table statement, or documented method is stronger than an optimistic guess.

If a private asset cannot be valued credibly, keep it in a separate record with the last supportable value or mark it as unvalued. A visible limitation is more useful than false precision.

List the amount currently owed, not the original amount borrowed and not all future interest. Include debt even when it financed an asset already listed on the other side of the statement.

Informal or disputed obligations may need a note, but omitting a real debt overstates net worth. Use the balance as of the same calculation date where practical.

Salary, expected bonuses, future business earnings, and possible inheritances are not current assets. They may affect future cash flow, but net worth is a dated stock measure rather than a forecast of lifetime earning power.

Do not count a rented home, leased vehicle, borrowed item, or employer-owned equipment as an asset. Everyday clothing, furniture, and electronics can also be left out when resale value is small, uncertain, or too costly to maintain consistently.

For a home, use either full current value as an asset plus the mortgage as a liability, or use home equity alone. Do not record full home value, subtract the mortgage, and then add home equity again.

Apply the same rule to brokerage accounts and holdings, businesses and underlying assets, and jointly owned property. Include the whole asset and whole liability or a consistent ownership share of both.

Suppose a household has USD 20,000 in cash and bank accounts, USD 200,000 in investments and retirement accounts, a USD 400,000 home, and a USD 20,000 vehicle. Total assets are USD 640,000.

If the household owes USD 250,000 on the mortgage, USD 8,000 on the vehicle, and USD 2,000 on credit cards, total liabilities are USD 260,000. Net worth is USD 380,000. The example uses full asset values and lists related debts separately.

Total net worth can include a home, retirement assets, private investments, and other holdings that are expensive, slow, or restricted to sell. Liquid net worth narrows the view to assets that can be converted to usable cash under the chosen definition, less relevant liabilities.

Do not silently remove illiquid assets from total net worth. Label the second measure and document which assets, selling costs, taxes, or debts it includes. Different definitions can be useful for different decisions.

A person can have substantial property and still lack emergency cash, or have a modest net worth while building income and paying down education debt. The Consumer Financial Protection Bureau emphasizes control over day-to-day finances, shock capacity, progress toward goals, and freedom of choice as parts of financial well-being.

Use net worth to understand the balance sheet. Use cash flow, liquidity, insurance, goals, and personal circumstances to answer other financial questions.