Understanding Net Worth
Your Net Worth is the most accurate measure of financial wealth. It represents what you would have left in cash if you sold everything you own (Assets) and paid off all your debts (Liabilities).
Frequently Asked Questions
What is a good Net Worth by age? +
A common formula is: (Age x Annual Pre-Tax Income) / 10.
Do I include my car? +
Yes, but use the current resale value (Kelley Blue Book), not what you paid.
Do I include my primary home? +
Yes! Your home is an asset. The mortgage balance is a liability.
Should I include jewelry? +
Only if it has significant resale value (gold, diamonds, high-end watches).