What counts toward your net worth?

One rule settles most cases: count what you could turn into money, at what you’d get for it today, and every debt you’d have to repay. The rest of this guide applies that rule to the things people most often ask about.

Your home

Count it, at what it would sell for now. Put the mortgage on the other side at its outstanding balance. The difference between the two is your home equity, and it’s often the largest part of someone’s net worth. Don’t deduct selling costs unless you’re actually planning to sell.

Home values are estimates, so they’re the easiest place to fool yourself. Pick a sensible figure, update it once or twice a year, and don’t chase every swing in the market.

Retirement accounts and pensions

Accounts with a balance in your name, such as a 401(k), an IRA or a personal pension pot, belong in your net worth. The money is yours, even if you can’t touch it without penalty yet. Some people subtract the tax they’d owe on withdrawal to be precise. Either way is fine, as long as you stick with it.

Promises of future income, like Social Security, a state pension or a traditional defined-benefit pension, don’t have a balance you own, so leave them out. That’s how the Federal Reserve’s Survey of Consumer Finances treats them too. They matter a great deal for your retirement, just not for this number.

Your car

Count it at what you could sell it for, and expect that number to drop every year. If you have a car loan, put the loan under what you owe. A new car bought with a loan often lowers your net worth for a few years, because it loses value faster than you pay the loan off.

Student loans

Count them, at the current balance. They’re a debt like any other, even if repayments depend on your income or part of the loan may be forgiven later. If forgiveness happens, your net worth goes up that day.

Stocks, funds and crypto

At today’s market value. Crypto can move a lot within a week, so don’t read too much into a single update. For stock options and RSUs from your employer, count only what has vested. Unvested shares aren’t yours yet.

A business you own

If you own a business, its value counts, but it’s hard to pin down. A cautious approach is to count the money in the business account minus its debts, and leave out goodwill unless you have a real offer or valuation.

Money others owe you

A loan to a friend or a deposit you’ll get back counts, if you expect to see the money. If you’re not so sure, leave it out.

What to leave out

• Everyday belongings, like furniture, clothes, electronics and appliances. They’d fetch little second-hand.
• Your income. Next month’s salary isn’t yours until it’s paid.
• An expected inheritance or bonus. Count it when it arrives.
• Insurance without a cash value, such as term life insurance.

Be consistent

There’s no single correct way to value a house or a pension. What matters more is that you value things the same way each time, so that changes in your net worth come from what you did, not from a change in method. Once you’ve decided, add it all up or use the calculator.