Your Financial Net Worth: What is it and How To Find Yours?

The net worth is like a photograph of your financial health. It is basically calculated by subtracting the value of everything you owe to all your assets. Your net worth can vary wildly if you know where to put the efforts on.

I was shocked to read that according to the Deloitte millennial survey 2019, the net worth of the generation Y is $8,000 on average. This is a decline of about 34% of the average net worth of the previous generation’s average.

But wait, there is more …

Within the last 10 years :

      • School tuition has actually increased by 65%
      • Food expenses have risen 26%
      • Medical care costs went up 21%
      • Housing costs increased by 16%
      • Transport expenses grew 11%.

Added to that, our generation is growing up to live with newer “commodities” which are data plans for home and mobile and are buying expensive devices (smartphones, tablets, smartwatches) that didn’t exist twenty years ago.


Yep I know, We, millennials, are certainly not on the same playing fields…


As an early millennial, I understood fairly late that in order to reach any kind of financial goals (or any goal as a matter of fact),  you first need to know where you are beginning with.

Doing this step is important in my point of view. It enables you to start with clarity. Most of the time, people underestimate how they are doing financially.

Knowing where you are now will make you extra effective in the following steps and eventually get you to your goals much faster.

Here at Millennial Bread, we aim at focusing on guiding Millennials And Gen Zs to improve your saving rate and generating income capacity.

Knowing where you are is key if you want to know where to go.

But do not fail to remember that at the end of the day, money is a tool.

A tool that enables you to enjoy more options in your lifestyle. This is necessary to understand early on.

Now that this is stated. Let get onto the topic: Your net worth.


After reading this, you should know how to find what you own, owe and calculating the difference which will result in your net worth.



Determining Your Financial Worth


Having an idea of what you possess (your assets) and what you owe (your liabilities) is very important since it offers an overview of your financial health and your capacity to accomplish monetary goals such as acquiring a house, starting a business, or retiring at some point.

In the rest of this blog post, I will define what is the net worth and then explain how to determine your own individual net worth.


What Is The Net Worth?


Your net worth is quite simply your monetary assets, for example, the money in your bank as well as all the investment you may have, minus you Monetary liabilities such as your student loans and credit card debt. Here are a few examples of what is considered an asset and a liability.:



      • Money in your bank account
      • Money that people owe you
      • Any stocks or bonds you own
      • Your 401k and Roth IRA
      • The paid portion of the real estate that you own
      • The value of your business


      • Your credit card debt
      • The money you owe to your relatives
      • Your student loans
      • Your mortgage
      • Any remaining balance to pay on items bought through financing (car, furniture, etc.)


Are you a collector?

comic books collection

There is one exception to something that isn’t usually thought of as a monetary asset, which you may or not include in the assets column. Some people are collectors of items that have some decent resell value. Are you one of them?

Here are some collectibles that may be relevant to add to your net worth calculation:

      • Comic books
      • Coins
      • Stamps
      • Antiques
      • Wine
      • Trading cards
      • Video games

You can count such collections as assets, yet keep in mind that there are only genuine assets if you agree to liquidate them and make use of the returns to the direction of your financial objectives.


Finding Out What You Have -Your Assets-


To calculate your financial assets, look at your bank statements as well as investment account statements, including retirement accounts and any other places you may have money at — like your piggy bank.

You may have just one or many accounts, and that’s fine. Add all the totals of these accounts to discover what you own.

It’s common for many young adults in their 20s to be in the early stages of accumulating assets. Have no worries, it’s normal.


What about what you already own?

Let’s say, you have a car that is paid, this could be considered as an asset.

As a rule of thumb, if you own something and that you are willing to sell to attain your financial goals, its market value can be added in the assets column.

But generally speaking, an asset is something that either increases in value or generates income over time. For example, if your car is needed to get you to work or is used to get income like a taxi, it is an asset.

Otherwise, it’s rarely the case, so it should be skipped in your net worth calculation.


Identifying What You Owe -Your Liabilities-


The majority of people gather debt and loans throughout life when their everyday expenses surpass their income.

I did that when I went to college.

You may have student loans and various other credit card debt. Gather all statements that document your loans and financial obligation and find out the grand total of what you owe.

This is pretty straightforward because in general, when you owe money to a company or a financial institution they make sure you do know how much and when it’s due.

They may sometimes fail at the service they provide, but rarely fail at that! Sigh.


Calculating The Difference


After you tally your monetary assets and your liabilities, you can subtract the latter from the former to get to your net worth.


Assets – liabilities = net worth


The result is positive? Congratulations! You are on the right path.

If you have a low or a negative net worth, Do not fret. This is only your starting point, not where you will end up.

I was 30 years old when I first calculated my net worth …

I had a car loan, credit card balance that I didn’t pay paid in full every month and I used financing to furnish my whole apartment.

Let me inform you, I was quite in shock when I saw the number.

When I recall that moment, my net worth was stressing me out. But looking back, there was no point sobbing over the results. What is done is done.  To each their own path.


You Know Your Net Worth. What Now?


Knowing your net worth is the first step in changing your financial destiny. Now that you know where you are, you can decide where you want to be. You will notice that when you start tracking it, it can move up real fast. It is all about your ability to increase your income and reduce your expenses in order to save more.


In the next article of this series, we will look at an important key financial metric: the saving rate. This is instrumental to predict the speed at which you will be able to reach your financial target. Make sure to read this next.


And remember: Where you start is not important, it’s where you end up that matters!


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