How to calculate your net worth

Are you interested in finding out how to calculate your net worth? Personally as someone who strives to achieve financial freedom from the daily grind of 9-5 I love working out my net worth. I also like to find ways to increase it. 

So how do you calculate your net worth? In simple terms your net worth is the total of all your assets minus all your liabilities.  By assets I mean money you have in savings accounts, equity on property, value of any stocks and shares, value of any bonds and other investments. Some people like to include their pension plan as an asset too but I did not as it only becomes available when I am 68. By liabilities I mean any debts you may have such as mortgages, credit card debt, personal loans, car loans, student loans and other money owing. Basically you want to have more assets than liabilities.

I manually calculated my own net worth but there are numerous calculators online to do the calculation for you.  They have a defined list of assets and liabilities for you to fill in but you can add your own at the end. I did a search online and liked the one provided by Moneysmart. It says it takes around 5 minutes to fill in. 

I have studied other financial bloggers net worths and am surprised at how quickly their’s have grown.  Their secret is not necessary earning lots of money but saving lots and investing in dividend stocks. Some of those with a large net worth have as high as a 50% saving rate. They invest any spare cash on high paying dividend stocks with yields of 5% or greater. They follow the stock market and buy more shares when they are cheap.  They also reinvest all their dividend income or else use it for another investment to help them to increase their net worth further. 

Some of the top finance websites publish a list of financial bloggers net worths. I was particularly impressed by the one shown on the Rockstar finance. website. Some of the top bloggers had net worths over one million dollars. Quite often I read their posts to try and acquire more knowledge in the investment field.  

Have you calculated your net worth? Are you working to increase it or are you not bothered by it? I have freely expressed my net worth.

Image credit is Pixabay.


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