Selurio · Blog
How to Calculate Your Net Worth (and Why It Is Worth It)
How much are you "worth" financially? Not how much you earn a month — but how much you actually own once you subtract your debts. This is your net worth, and it is perhaps the most honest single number for your financial health. Income shows the flow; net worth shows the accumulated result.
This article explains how to calculate it in five minutes, what the debt-to-assets ratio means, and why you should track it once every few months.
The formula
Net worth is the difference between assets and liabilities:
Net worth = total assets − total liabilities
Assets are everything you own that has value:
- Cash and deposits (accounts, savings)
- Investments (stocks, ETFs, bonds, crypto, pension accounts)
- Property (at current market value)
- Other (a car, valuables, a stake in a business)
Liabilities are everything you owe:
- Loans (mortgage, consumer, car)
- Other obligations (credit cards, loans from family and friends)
Example
| Assets | Value | Liabilities | Value |
|---|---|---|---|
| Cash and deposits | €10,000 | Mortgage | €120,000 |
| Investments | €25,000 | Consumer loan | €5,000 |
| Property | €200,000 | ||
| Total assets | €235,000 | Total liabilities | €125,000 |
Net worth: €235,000 − €125,000 = €110,000. That is what you actually own today, if everything were cashed in and all debts paid off.
Calculate your own in the net-worth calculator — fill in the categories and see the result right away.
The debt-to-assets ratio
Besides net worth itself, a second metric is useful — debt to assets:
Debt to assets = total liabilities / total assets × 100%
For the example above: 125,000 / 235,000 ≈ 53%. This percentage shows how much of your assets is "borrowed." A lower ratio means less indebtedness and more resilience if your income falls. Young people with a fresh mortgage naturally have a high ratio, which falls over the years.
Net worth can also be negative — for example a student with loans, or someone with a fresh mortgage and few assets. This is not a verdict; what matters is the direction over time, not the snapshot.
Why you should track it
A single measurement is a snapshot. The value comes from the trend: you calculate your net worth every 3–6 months and watch the direction.
- Is it rising? Your plan is working.
- Standing still despite your income? You are spending as much as you earn.
- Falling? It is time to review your expenses and debts.
It is also an objective corrective against illusions: a high income does not mean wealth if it all drains away. Net worth does not lie.
How to improve it
Two levers move the number up: growing assets and shrinking liabilities.
- Build assets through regular investing — compound interest does the heavy lifting over time.
- Keep your assets working and sensibly allocated — see asset allocation and diversification.
- Pay off expensive debts before you invest aggressively — the interest on a consumer loan often exceeds a reasonable market return.
- Keep an emergency fund so you do not have to take on new debt in a crisis.
What this does NOT mean
- It is a snapshot. The market values of investments and property change; so does the number.
- It is not a competition. It is useful against your own past, not against someone else's.
- The estimate is a guide. Its accuracy depends on how realistically you value your assets.
Continue reading
- Asset allocation — how to arrange the asset side.
- Diversification — so you do not bet everything on one thing.
- Emergency fund — the buffer that protects your net worth.
- Investing for beginners — the full plan.
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