PakFinanceGuidesAssets minus liabilities
Net worth is brutally simple: everything you own minus everything you owe. It cuts through income bragging — a high earner drowning in debt can be worth less than a modest saver with no liabilities. Track it yearly and the trend tells you if you are actually getting richer.
Worked example
Home 300,000, investments 50,000, cash 20,000 and other assets 15,000 give 385,000 in assets. Mortgage 220,000 plus 25,000 other debts give 245,000 in liabilities. Net worth: 140,000.
What to include (and what not to)
Include market values, not purchase prices — your home is worth what it would sell for today, minus selling costs if you want precision. Leave out pensions you cannot touch for decades if you want a liquid picture, or include them for the full one. Be honest about debts; the calculator cannot help if the inputs lie.
Frequently asked questions
What is a good net worth for my age?
Rules of thumb exist (e.g. net worth roughly equal to your age times income divided by 10), but the trend matters more than any single number.
Does my home count in net worth?
Yes, at market value minus the mortgage. Just remember it is illiquid — you cannot spend bricks without selling or borrowing.
How often should I check?
Yearly is plenty. Monthly checking turns a useful metric into anxiety.
My net worth is negative — now what?
It is a starting point. Every debt payment and every saved dollar moves it up. Track it and watch the line climb.