Net Worth Calculator

Net worth is calculated using a straightforward formula that takes into account the total value of an individual's or company's assets and liabilities.

Net Worth Formula:

Net Worth = (Asset 1 + Asset 2 + ... + Asset N) – (Liability 1 + Liability 2 + ... + Liability N)

Let's break it down:

• Assets: These are income-generating or financially beneficial resources—such as owned property, rental income, shares, or savings.
• Liabilities: These represent financial obligations or outflows, including loans, taxes, fees, and other expenses.

By adding up all assets and subtracting the total liabilities, you arrive at the net worth figure.

When calculating net worth, assets are defined as anything an individual owns that has monetary value, including cash, investments, real estate, and personal property. Essentially, it's anything you could potentially sell for cash.

Here's a more detailed breakdown of what counts as an asset:

• Cash: Money in checking and savings accounts, as well as cash on hand.
• Investments: Stocks, bonds, mutual funds, and other investment vehicles.
• Real Estate: Property ownership, such as homes, land, and rental properties.
• Personal Property: Vehicles, jewelry, art, and collectibles.
• Financial Assets: Claims on someone else's money or property, like loans you've made to others.

A liability is a financial obligation or debt that a person, organisation, or business owes to another party. It represents a claim against an entity's assets and is typically settled through the transfer of economic benefits like money, goods, or services.

Liabilities are of two types:

• Current liabilities: Obligations that are due within one year (or the operating cycle, if longer). Examples include accounts payable, accrued expenses, and short-term debt.
• Non-current liabilities: Obligations due in more than one year. Examples include long-term debt, deferred revenue, and lease obligations.
• Contingent Liabilities: Potential obligations that may arise if a future event occurs or doesn't occur.

Some examples of liabilities include:

• Loans from banks or other lenders
• Accounts payable to suppliers
• Salaries payable to employees
• Taxes owed to the government
• Deferred revenue
• Bonds and mortgages
• Warranties
• Accrued expenses like utilities or interest

It's recommended to calculate your net worth at least once a year, or more frequently if you're making significant financial changes, such as buying a house or a car.

Tracking your net worth regularly helps you:

• Understand your financial progress
• Identify areas for improvement
• Make informed decisions about your finances

Typically, a positive net worth is seen as a healthy financial indicator. It means your assets outweigh your liabilities.

Moreover, a steadily increasing net worth—especially when accompanied by strategic allocations like emergency savings and debt repayment funds—is considered a sign of strong financial well-being.

Yes, it is possible to have a negative net worth. Net worth is calculated by subtracting your liabilities (what you owe) from your assets (what you own). If your liabilities exceed your assets, the result will be a negative net worth.

Example of Negative Net Worth:

Assets:

• Home: ₹160,000
• Money Market Account: ₹25,000
• Car: ₹10,000
• Other Personal Assets: ₹15,000

Total Assets: ₹210,000

Liabilities:

• Mortgage: ₹220,000
• Credit Card Debt: ₹30,000
• Student Loan: ₹15,000

Total Liabilities: ₹265,000

Net Worth: ₹210,000 (Assets) - ₹265,000 (Liabilities) = –₹55,000 (Negative Net Worth)

In this example, the person owes more than what they own. The total liabilities outweigh the assets, resulting in a negative net worth. This can happen when debt—such as a large mortgage, student loans, or high-interest credit card balances—accumulates faster than asset growth.

Yes, net worth calculators are well-suited for users in India. They serve as valuable tools to evaluate financial health by calculating the difference between total assets and liabilities.

By offering a clear picture of one's financial standing, these calculators help individuals set goals and make informed choices around spending, saving, and investing.

Income refers to the money you regularly earn—from your job, business, investments, rental properties, or government benefits. It comes in two forms:

• Gross income (before taxes and deductions)
• Net income (your actual take-home pay)

Net worth, on the other hand, is a measure of your total financial health—it's the value of your assets minus your liabilities.

While income shows how much money you're making, net worth reflects how much wealth you're actually building. Earning more doesn't always mean increased wealth, especially if your spending or debts grow alongside it.

That's why focusing on both income and net worth is key to long-term financial stability.

When people search for the Net Worth of India, they're typically referring to the country's national wealth or the average wealth per citizen—a measure of the nation's overall economic strength, including assets held by the government, businesses, and individuals.

However, this net worth calculator is meant for personal financial use. It helps individuals calculate their own net worth by assessing their assets and liabilities—not the net worth of an entire country.