What is Your Net Worth?

April 21, 2022 | Posted by: Sherry Corbitt

Many Canadians today do not know what their net worth is. This could be from not staying up to date with their assets and liabilities, or it could even be from not knowing how to calculate your net worth. When you see your net worth, you can establish how you are doing financially.

What is Net Worth?

Your net worth is the financial asset amount, excluding any debts. There are two sides of the net worth scheme that you may be on; A positive net worth or a negative net worth. A positive net worth is where you have more assets than liabilities. This can be more tricky to reach since having the amount to pay off large debts can take years to attain. On the other hand, a negative net worth is where you have more liabilities than assets. Many people can have a negative net worth, especially if they are young adults.

Calculating Your Assets

Your assets can include any money and financial investments. This could consist of any of the following:
-Savings and Checking accounts
-Owned properties (main residence and investments)
-Other non-registered investments

When you establish what items you have that contribute to your assets, you should separate them and calculate each item. Once you have calculated each amount, you can add your assets together to get your grand assets total. You now know what your net worth is before deducting the liabilities.

Calculating Your Liabilities

Next, it is time to establish what liabilities you have. Depending on your situation, you may have a large or small debt. Some liabilities that many people have to include the following:
-Student loans
-Credit Card Debt
-Medical Bills

Like your assets, you want to separate all of your debts and calculate each amount. Then once you have added them all together, you have your total liabilities amount.

Calculating Your Net Worth

Once you have determined what all of your assets and liabilities are, you can discover your net worth amount. Next, you need to take your liabilities amount and subtract it from your assets amount. After this last calculation, you should have your net worth amount. You will find out if you have a positive or negative net worth at this stage.

How to Get From a Negative to a Positive Net Worth

If you happen to have a negative net worth, your debts outweigh the assets you own. Although this can make you feel distressed, many people have a negative net worth. Costs of schooling, transportation, and properties are going up today, making it extremely difficult to stay out of a negative net worth. If your goal is to get to a positive net worth, the primary step is to get out of your debts. Start by working on one debt at a time and staying out of new debt. You can also increase your assets by increasing your income amount, whether you gain more hours at work or start a temporary second job.

How Often Should You Review Your Net Worth?

There is no specific timeline that you should be checking your net worth. Yet to ensure the safety of your net worth, you should check it every two to four weeks. This will ensure that everything is correct and that there are no errors made.

If you are not sure what your current net worth is, it would be wise to check now. You may be shocked at the amount of assets or liabilities you have.

Please reach out to me if you have any questions about your net worth and how to calculate it accurately.


-Folger, Jean (2022). How to Calculate Your Tangible Net Worth. Investopedia. Retrieved from https://www.investopedia.com/articles/pf/13/calculating-your-tangible-net-worth.asp#:~:text=Your%20net%20worth%2C%20quite%20simply,have%20a%20positive%20net%20worth.

-Geny Money (2019). Step-By-Step Guide On How to Calculate Net Worth. Retrieved from https://www.genymoney.ca/how-to-calculate-net-worth/

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