Determine Your Net Worth

Your net worth is a snapshot of your financial health—it shows what you own minus what you owe. By tracking your net worth, you’ll have a clear picture of your financial progress and a benchmark for reaching FIRE. One of the best ways to do this is by using an app that consolidates all your financial accounts in one place. I personally recommend Empower, as it does a great job of showing your net worth when you link all your accounts. It automatically updates your balances, categorizes assets and liabilities, and provides a clear picture of your financial progress over time. If you would prefer to do this by hand, the below can be used to calculate it.

How to calculate your Net Worth Manually

1. List Your Assets

Add up everything you own that has financial value, including:

• Cash (checking/savings accounts)
• Investments (401(k), IRAs, brokerage accounts)
• Real Estate (home, rental properties)
• Other Valuable Assets (vehicles, collectibles, businesses)

2. List Your Liabilities

Add up everything you owe:

• Mortgage
• Car Loans
• Student Loans
• Credit Card Debt
• Personal Loans

3. Use the Net Worth Formula

Net Worth= Total Assets − Total Liabilities

Example Calculation:

Assets

• Home: $500,000
• Investments: $200,000
• Cash: $50,000
• Total Assets: $750,000

Liabilities

• Mortgage: $300,000
• Car Loan: $20,000
• Credit Card Debt: $10,000
• Total Liabilities: $330,000

Net Worth Calculation

$750,000 - $330,000 = $420,000

By calculating your net worth regularly, you can track your financial progress and make informed decisions to reach FIRE faster.