In this article
Your net worth is everything you own minus everything you owe. It is a snapshot, like a personal balance sheet, and it is a better measure of financial health than salary because it shows what you have actually kept. A high income with large debts can leave a low net worth, and a modest income saved steadily can build a high one.
The formula and a worked example
Add up every asset, add up every debt, then subtract. The calculator groups assets into four buckets and debts into two, which is enough for a clear picture without needing a long spreadsheet.
- 1Add the assets₹1,50,000 cash + ₹4,00,000 investments + ₹25,00,000 property and vehicles + ₹50,000 other = **₹31,00,000**.
- 2Add the debts₹15,00,000 loans + ₹30,000 card dues = **₹15,30,000**.
- 3Subtract₹31,00,000 − ₹15,30,000 = **₹15,70,000** net worth.
- 4Work out the ratio₹15,30,000 ÷ ₹31,00,000 = **49.4%** debt-to-asset.
The tool returns four numbers: net worth, total assets, total debts and the debt-to-asset ratio.
What counts as an asset
| Asset | How to value it | Common mistake |
|---|---|---|
| Cash and bank balances | Today's balance across savings and current accounts | Forgetting accounts you rarely use |
| Investments | Current market value of stocks, mutual funds, FDs, bonds and retirement accounts | Using the amount you invested, not today's value |
| Property and vehicles | A realistic selling price today, not the purchase price or a wish | Valuing a car at its showroom price |
| Other assets | Gold, business stake, money lent out that you expect back | Counting sentimental items you would never sell |
Use what you would get if you sold the item today. Be a little conservative for items that are hard to sell.
- Cash and bank₹1.5 L (4.8%)
- Investments₹4 L (12.9%)
- Property and vehicles₹25 L (80.6%)
- Other assets₹0.5 L (1.6%)
Property and vehicles are over 80% of the assets. That is typical, and it explains why net worth can feel high while cash feels tight.
What counts as a debt
- Loans: home loan, car loan, education loan, personal loan, loans from family that you must repay. Use the outstanding principal, not the original amount.
- Credit card and other dues: the full unpaid balance, plus any bills you owe such as tax or rent arrears.
- Not a debt: next month's regular bills that you pay out of salary, unless they are overdue.
Reading the debt-to-asset ratio
The ratio shows how much of what you own is financed by borrowing. At 49.4% in the example, about half the assets are covered by debt. A ratio under 100% means net worth is positive. A ratio above 100% means you owe more than you own.
These bands are a rule of thumb, not an official standard. A home loan early in life often puts people in the moderate band, and the ratio usually falls as loans are repaid.
Net worth is not the same as spendable money
Most of the example net worth sits in a house. You cannot spend a house on a bad month. A second figure, liquid net worth, counts only cash and investments and subtracts short-term dues.
- All assets minus all debts
- Includes the house and the car
- The long-term picture
- Cash and investments (₹5,50,000) minus card dues (₹30,000)
- What you could use within days
- The safety-net picture
Both numbers are useful. The first shows long-term wealth, the second shows how well you could handle a job loss or a medical bill.
How net worth grows over time
Net worth grows from two sources: new savings and the returns on what you already own. Suppose you start with the example net worth, save ₹2 lakh a year and earn 7% a year on your net worth. These are assumptions for illustration, not a forecast.
Net worth rises from ₹15.7 L to about ₹58.54 L in ten years. Real returns vary year to year and are never guaranteed.
Tracking it once a year
- Pick a date and do the calculation on the same date each year, such as 1 April or 31 December.
- Collect statements for every bank account, investment and loan.
- Value property and vehicles conservatively and keep the same method each year.
- Enter the totals in the calculator and save the four result numbers.
- Compare with last year. Look at net worth, the debt-to-asset ratio and liquid net worth separately.
Questions people ask
What is net worth?
Net worth is the total value of everything you own (assets) minus everything you owe (debts). It shows what you would be left with if you sold all your assets and paid off every debt.
How do I calculate my net worth?
List all your assets at today's value, list all your debts at the outstanding balance, then subtract the debts from the assets. The Net Worth Calculator does the addition and subtraction for you.
Should I include the house I live in?
Many people do, because it is a real asset that you could sell. Others leave it out to see the money that works for them. The best approach is to calculate both: total net worth with the house and liquid net worth without it.
Can net worth be negative?
Yes. If your debts are larger than your assets, net worth is negative. This is common for people with student loans or a fresh home loan, and it usually improves as loans are repaid.
What is a good debt-to-asset ratio?
There is no official standard, but lower is safer. A ratio under about 30% means little of what you own is financed by debt, and a ratio above 100% means you owe more than you own.
How often should I check my net worth?
Once or twice a year is enough for most people. Checking too often makes you react to normal market ups and downs. The Net Worth Calculator takes a minute with your latest statements.