What is my net worth?

Determining Your Net Worth: Calculating Your Total Assets

Your Net Worth is simply the value of what you own (total assets) less what you owe (total liabilities).

The first step in calculating your net worth is to estimate the value of your total assets. You can do this in the forms below. Next you have to estimate the value of your liabilities - which you can do in the second part of this how-to guide here.

Your liquidity is your financial ability to respond swiftly to emergencies or investment opportunities. Liquidity consists of your cash accounts and short-term investments such as Fixed Deposits, Savings account, Company Deposits, KVP (Kisan Vikas Patra), NSC (National Savings Certificate), Post Office deposits etc. Your need for liquidity is influenced by the predictability of your cash income and expenses, by your employment security, and by your investment strategy.

It is generally held that your liquid assets should roughly equal employment income of four to six months. If you are in an unstable employment situation or about to make a large investment, the amount should probably be greater. If your employment is relatively secure and you anticipate no major cash expenditures in the near future, the amount should be smaller.

Investment Assets

Investment assets are defined as long-term investments, and are intended to store value for major future needs like education expenses and retirement. Stocks, bonds, Insurance Policies, Mutual Funds and real estate  (other than personal residence and vacation property) are typical investment assets. So are investments in alternative assets, such as hedge funds and commodity funds. Retirement funds, too, are classified as investment assets. These may include Provident Fund, PPF, Pension Plans etc.

Personal Assets

Items you acquire for your own or your family's long-term use or enjoyment form part of your personal assets. Typically, they include your private residence and vacation home as well as any cars, art, antiques, and furnishings that you own.

Congratulations! You have now calculated your total assets. This is the combined sum of your total liquid assets, total investment assets, and total personal assets. Next proceed to the second part of this How-To Guide which will help you estimate your liabilities.