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How to Calculate Your Net Worth

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Your net worth is a measure of your financial stability, and knowing your net worth gives you a handle on how healthy you are economically. The way to determine your net worth is simply adding up what you own – your assets, such as account balances and real estate – and subtracting what you owe – your liabilities like your mortgage and credit card debt.

Creating a detailed net worth statement gives you a good idea of where you can do better moving forward. It’s advisable to do this once a year. Our net worth calculator will get you going.

And just in case you need additional help, here are details on how to work your way through the process:

Start with Cash: what you have on hand, what’s in your checking accounts and what’s in your savings accounts. Include any savings bonds and certificates of deposit along with money you’ve squirreled away under the mattress (that’s a bad idea, by the way.)

For Retirement Savings, the value of your 401(k), IRA or other defined-contribution plan will be available in your latest statement or online. If you have a pension and or profit-sharing plans, valuing these can be tricky. A program that will provide you with retirement income is surely an important asset, but it’s difficult (although by no means impossible) to put a current dollar value on income you’re supposed to receive in the future. This will require a spreadsheet, knowing what your pension promises you at........

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