How to Determine Your Net Worth: Is it High, Low or Average?

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Real estate investors, like everyone else, should be aware of their net worth. This value is extremly important because it allows us to gauge if our complete financial value is increasing or not. The average American doesn’t know how to save money, and typically has a very low net worth; many people even have a negative net worth! While it may seem obvious to many of us, the average guy simply can’t put a cap on wasteful spending (going out for drinks, buying cars that lose value, etc.) in order to buy assets that actually go up in value (like real estate, securities, etc.), and thus increase their net worth.

Simply put, net worth is your total assets minus your total liabilities

How to Determine Your Net Worth

Your Assets

The first step in calculating your net worth is to determine the total value of all of your assets. Add the value of the following:

  • Liquid Assets: cash, checking & savings accounts, money market accounts, CDs, savings bonds, cash value of insurance policies
  • Securities: (use current market values) stocks, bonds, mutual funds
  • Non-Marketable Investments: annuities, IRAs, tax shelters, pension plan equity
  • Hard Goods / Durables: cars, bikes, motorcycles, mobile homes, furnishings, furniture, electronic and other equipment, collectables, jewelry, furs
  • Loans Receivable: money owed you
  • Real Property: house, condo, rental property, commercial property, land, other real estate

Your Liabilities

Tally all of your liabilities . . . I know this part is much scarier for many of us!

    Mortgages & Home Loans: Determine the balances owed on these loans

  • Credit Cards: Determine the balance due on all of your cards
  • Credit Installment Plans: Determine the remaining balance on payment plans for vehicles, furniture, equipment, mobile homes, home improvement loans
  • Cash Loans: the value of any cash loans outstanding
  • Insurance Policy Loans: any loans against your insurance policy
  • Any Notes Payable
  • Taxes Due: on income & property

Now, just subtract the liabilities from the assets and you’ve got your net worth.

You can use our net worth worksheet to help organize your work.

Compare Your Net Worth to that of Others

Note: By using computer software like Quicken or Microsoft money, you can make this task much easier. You can even watch your net worth on a month to month or week to week basis with very little work. I highly suggest using one of these to do your bills and calculate your assets and liabilities!

About Author

Joshua Dorkin

Joshua Dorkin is a serial entrepreneur, investor, podcaster, publisher, educator, and co-author of How to Invest in Real Estate. He started BiggerPockets to help democratize the real estate investing landscape for himself and others, aiming to make it accessible for everyone, regardless of income or education. Today, BiggerPockets is the premier real estate investing website online with over one million members and reaching over 70 million people with the message of financial freedom through real estate investing. Joshua, along with his wife and three daughters, make their home in Denver, Colorado, and spend any time they can traveling, exploring, and adventuring. Read more about Joshua’s story in 5280 and


  1. Caitlynn Cheery on

    Thank you so much for all these information. I’ve wondered for quite a few times about my net worth, but never really knew how to determine it. Now that I know, I’m going to have to compute and see. 😉

  2. The one thing I hate about real estate net worth is if you have $100k in equity in a $500k house, it costs you $30k to sell it. So 30% of its net worth is really unusable or doesn’t count.

  3. There is an excellent book: “The Millionaire Next Door”.
    You should read it to understand your net worth, if you are an under wealth accumulator or a prodigious wealth accumulator.
    There is also amazing information about the lifestyle of a millionaire . They are very frugal and spend much less money than people with bigger income.
    No big cars no big house no expenses for status for the millionaire…

  4. Kraig Grayson on

    Knowing one’s net worth is a good thing because you may find yourself in an embarassing position one day if you guess wrong. There is a rule of thumb however: Always ensure that your assets are more than your liabilities.

  5. lol at the “assets more than liab.” comment above. It would be interesting to see the data in the link provided applied to individuals in other counties. I’ve heard the Japanese have much higher per-capita net worths than Americans. Any info on that or other countries would also be beneficial to comparing your net worth to others.

  6. “Personal Real Estate Investor” magazine just looked at a variety of mortgage acceleration programs designed to increase your net worth more rapidly (and pay less interest on your mortgage and other debts) and gave…

    to a company called United First Financial.

    Email me, or call, and I’ll send you the article.

    This is a program that not only tracks your expenses, but will also tell you when, and how much money to move to where it will work most efficiently for you. It will tell you the exact day, and date, you will be debt free based on your current cash flow and spending habits. Most clients are on track to pay off their mortgage and other debts in 1/3 to 1/2 the time without refinancing their current mortgage, without their mortgage payment changing, and without them changing their household budget, or lifestyle, in any significant way. I had 13 years left on my mortgage, but using this program I am going to be paid off in just a little over 5.

    Also… “Outstanding Company of the Month”
    by Broker Banker magazine

    Sue 🙂

  7. Handsome B. Wonderful on

    Why don’t you just use instead of buying a program? It’s a free online Quicken that makes it’s money off of analyzing your stats and gearing savings deals and advertisements towards you. Get over the “I’m afraid to have my info on the internet” feeling and give it a try.

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