Net worth is one subtraction: everything you own on a given day, minus everything you owe that day. Here is how to calculate net worth in a sentence: add up your assets at what they would fetch today, add up your debts at the balances needed to clear them, and take the second total from the first. In order, the steps are:

1. Pick a date and gather your statements
2. List what you own at today’s value
3. List every debt at its current balance
4. Subtract, and read the sign
5. Write down your rules, and repeat on the same date

The answer can be positive, zero or negative, and it describes where you stand rather than how well you are doing. Investor.gov, the US Securities and Exchange Commission’s site for investors, calls the finished list a net worth statement and suggests updating it every year.¹

What net worth measures, and what it leaves out

Net worth measures a stock, not a flow. The Federal Reserve’s report on its 2022 Survey of Consumer Finances puts the difference plainly: income tracks what came in over the previous year, while net worth is a snapshot on the day of the interview that reflects the cumulative result of economic activity over a much longer period.²

That is why equal pay can sit alongside very different figures. Picture two colleagues on identical salaries: one has paid into a retirement account for a decade and cleared a student loan, while the other started later and still owes most of the loan. Their pay slips match; their balance sheets do not.

What goes into “what you own” is a choice, and official statisticians make it differently. Britain’s Office for National Statistics (ONS), in its 2025 wealth bulletin, counts private pensions already built up, including defined-benefit (final-salary) pensions, in household wealth, while the Federal Reserve’s 2022 survey leaves out defined-benefit pensions and Social Security because there are no widely agreed standards for valuing them.³²

Net worth also says nothing, on its own, about income. A household can have a large figure locked in a home that pays nothing, which is why what passive income really takes starts from the capital behind each stream rather than from the total.

So treat net worth as a photograph of one day, and decide before you start which items belong in the frame.

How to calculate net worth from the statements you already have

The method rests on one rule shared by US university extension guides: count assets at what they would sell for today and debts at what it would take to pay them off today. Ohio State University Extension’s 2016 fact sheet describes the result as the money you would have if you sold everything at current market value and paid every debt in full.⁴

1. Pick a date and gather your statements

Choose one date and use balances from that day or the nearest statement. Ohio State’s guide suggests year-end statements from banks, card companies and retirement accounts.⁴ A fixed date matters because balances move as pay lands, bills are paid and markets shift.

2. List what you own at today’s value

Assets go in at what a willing buyer would pay now, not at what you paid. New Mexico State University’s extension guide (revised 2018) lists the usual entries: bank and savings accounts, a home and other property, retirement plans, investments, vehicles, and the cash value of life insurance. It singles out a few that need care:⁵

• Your home: estimate its sale value from similar homes nearby or an agent’s estimate, and enter the full value here. The mortgage goes on the debt list rather than being subtracted first. (Whether a home deserves to count as an asset at all is a debate of its own.)
• Cars and furniture: usually worth less than you paid, so the guide advises realism, and suggests listing only personal possessions with real resale value, such as valuable jewelry, art or collections.
• Workplace retirement plans: the guide suggests using the amount that would be available to you if you left your job.

The Fed’s survey works the same way on the biggest item: it asks respondents to report the value of their own home.² So a careful estimate of your own is the same kind of figure the survey relies on.

3. List every debt at its current balance

Debts go in at the amount needed to clear them today. Ohio State’s guide lists the mortgage balance, car and education loans, every credit card balance, and bills or taxes you currently owe.⁴ Use the outstanding balance, not the monthly payment: writing down a payment instead of a balance would make a large loan look small.

4. Subtract, and read the sign

Total assets minus total debts is your net worth. If the debts are larger, the result is negative, and Investor.gov tells readers in that position not to be discouraged.¹ New Mexico State’s guide notes that young couples who are setting up a home sometimes find their debts exceed their assets.⁵ A negative figure marks where you begin; it is not a judgment of you.

5. Write down your rules, and repeat on the same date

At the top of the page, note what you included and how you valued it: where the home estimate came from, whether pensions are in, and anything you left out. Then repeat the calculation. In the US, the Financial Industry Regulatory Authority (FINRA) suggests an assessment about once a year as a measurable way to see progress.⁶ For why a regular look helps, the research is summarized in our guide to checking your progress when you track spending.

Here is the arithmetic for a hypothetical US household, in round US dollars. The figures are illustrative, not typical or a target, and every asset value is an estimate.

1. What it owns: US$380,000 in all, of which the home at its estimated sale value is US$300,000
2. What it owes: US$268,000 in all, of which the mortgage balance is US$240,000
3. Net worth: the gap between the two, US$112,000 (hypothetical example, round US dollars)

Two things stand out. More than half of this household’s net worth is the gap between the home’s value and the mortgage, which it could not spend without selling or borrowing against the house; Ohio State’s guide warns that assets which are hard to turn into cash may leave too little money on hand if income falls.⁴ And the rules shape the answer: leave the home and its mortgage out, and the same household’s figure falls to US$52,000.

WiserHours

Your first net worth statement

• Pick one date and gather the statements nearest to it
• List each asset at what it would sell for today
• Enter the home at full value and the mortgage as a debt
• List every debt at its current balance, not its payment
• Subtract total debts from total assets
• Note what you included and how you valued it
• Put the same date in next year's calendar

Find this checklist online:
https://wiserhours.com/passive-income/how-to-calculate-net-worth/#checklist-how-to-calculate-net-worth-first-statement

Why the typical family’s figure sits far below the average

In official US statistics, the mean family’s net worth is several times the median family’s, because a small number of very wealthy households pull the mean up. The Federal Reserve’s 2022 Survey of Consumer Finances shows the gap clearly, and it is why a median, the family in the middle, is the fairer yardstick for comparing your own figure.

The study

Moderate evidence

Median or mean? What the Fed's 2022 family survey found

The Fed interviewed a sample of US families and weighted the answers to represent all US families. Median net worth was US$192,900 and mean net worth was US$1,063,700, both in 2022 dollars. The survey measures net worth as families’ assets minus their liabilities, the same subtraction as the steps above.²

The mean is more than five times the median, and that gap is the lesson: an average pulled up by the richest households describes few real families. A made-up street shows the effect. Nine households are worth about US$100,000 each and a tenth is worth US$10 million: the average comes to more than US$1 million, yet nine of the ten are nowhere near it. The survey is cross-sectionalcross-sectional: Describes a study that measures everyone in its sample at a single point in time. Because the possible cause and the outcome are recorded together, it can show that two things occur together but not which of them came first.Full entry in the glossary, a fresh snapshot of different families each round, so it shows where US families stood in 2022, not how any one family’s wealth changed. As of September 2026 it is still the most recent round with published results.⁷

Charts that rank net worth by age raise the same problem. If you do compare, compare with a median, from a named survey, for your own country and year, and check that it counts the same items you do.

Pensions split the official definitions

The biggest single difference between the US and British official measures is pensions. The ONS counts the value of occupational and personal pensions already built up as one of four parts of household wealth in Great Britain, alongside property, financial wealth and physical wealth such as vehicles and household contents.³

Take pensions out and the British median falls by more than a third.³ The Fed’s survey does count retirement accounts, such as individual retirement accounts and certain employer plans, but it leaves out defined-benefit pensions and Social Security. Its reasoning: future income from them cannot be turned directly into a value today without assumptions about future pay, inflation, interest rates and lifespan, and no widely agreed standards exist for those assumptions.²

The ONS story shows why method notes matter. For this release it changed how it values pension wealth, so its totals including pensions cannot be compared with earlier releases; it also suspended the survey’s accredited status from this round over concerns about quality and falling response rates.³

Consider a teacher with a final-salary pension and modest savings. Counted the ONS way, her pension may be her largest asset; counted the way the Fed’s survey does, it does not appear at all. Neither is wrong. For your own statement, one workable approach is to list pension pots that have a balance, note any defined-benefit promise on a separate line, and keep whichever rule you pick.

What the guidance and the surveys support

The guidance agrees on the core steps, but none of it rests on studies comparing methods, and the two official surveys disagree on pensions.

In practice, the steps are conventions rather than tested rules, so their value lies in applying them the same way each time.

If the result worries you, where help comes from

You can work out the figure on your own. Help makes sense in three situations, listed from most to least urgent (our ordering; each route is attributed to the body that gives it).

• Today, if money stress brings thoughts of suicide or of harming yourself. In the US, the route the National Institute of Mental Health gives is the 988 Suicide & Crisis Lifeline (call or text 988), with 911 for life-threatening emergencies.⁸ In the UK, the NHS’s urgent-help page for England gives 999 or A&E for anyone whose life is at risk, Samaritans on 116 123, and NHS 111 for mental health help that cannot wait.⁹ In other countries, call the local emergency number.
• In the coming weeks, if the debt side is more than you can keep up with. In the US, the Consumer Financial Protection Bureau explains that credit counseling organizations tend to be non-profits, and their advice can cost little or nothing.¹⁰ In the UK, GOV.UK directs people to MoneyHelper, which has information on free debt advice services.¹¹ In other countries, seek out a government-run or charity debt adviser.
• Before a big decision that rests on the figure, such as borrowing, saving or investing, when a regulated adviser can review your particular situation. Investor.gov recommends checking a financial professional’s background first, noting that much US investment fraud is committed by people who are not licensed or registered.¹² In the UK, two tools from the Financial Conduct Authority (FCA), the Firm Checker and the Financial Services Register, confirm whether a firm or person is authorised.¹³ In other countries, ask your national financial regulator.

The bottom line

Net worth is simple arithmetic resting on a few judgment calls: what each asset would sell for, whether pensions count, and what date you measure. Make those calls once, write them down and keep them, so next year’s figure tells you something real. And if you compare, compare with a median for your own country and year, never with an average.