Net Worth
Personal FinanceNet worth is total assets minus total liabilities. The single most important financial health metric beyond income or savings rate. Tracks actual wealth accumulation over time.
In detail
Assets: real estate (market value), equity MF, EPF, PPF, gold, FDs, savings, car (depreciated), business. Liabilities: all outstanding loans, credit card dues. Milestones (rough): age 30 = 1x salary, age 40 = 5x, age 50 = 10x.
Formula
Net Worth = Total Assets - Total Liabilities
Real-life example
🇮🇳 India example
Meera, 35: Flat worth Rs 70L (loan Rs 35L), equity MF Rs 25L, PPF Rs 8L, EPF Rs 12L, FD Rs 5L, gold Rs 4L, car Rs 3L (loan Rs 1L), savings Rs 2L. Assets Rs 1.29 Cr - Liabilities Rs 36L = Net worth Rs 93L.
Frequently asked questions
Include primary home in net worth? ▼
Yes, at market value minus outstanding loan. But also track investable net worth (excluding primary home) separately since home is illiquid.