How do you calculate net worth?

Net worth is calculated by adding up all your assets (cash, investments, real estate, vehicles, retirement accounts) and subtracting all your liabilities (mortgages, loans, credit card debt). The result is your net worth.

What is a good net worth?

A good net worth varies by age and income. The median net worth in the U.S. is approximately $192,900 according to the Federal Reserve. For loan applications, lenders typically want to see positive net worth and sufficient liquidity to cover loan payments.

What is a Net Worth Statement?

A Net Worth Statement is a financial document that calculates your net worth by subtracting your total liabilities from your total assets. It provides a snapshot of your financial health at a specific point in time. Lenders use net worth statements to evaluate your ability to repay loans and assess overall financial stability.

Net Worth Formula

Assets - Liabilities = Net Worth

Example Net Worth Calculation

Assets

Checking/Savings$25,000
Investments$85,000
Retirement (401k)$120,000
Home Value$450,000
Vehicles$35,000
Total Assets$715,000

Liabilities

Mortgage$320,000
Auto Loan$18,000
Student Loans$42,000
Credit Cards$8,000
Total Liabilities$388,000

Net Worth: $327,000 ($715,000 - $388,000)

U.S. Net Worth Statistics

$192,900

Median U.S. household net worth

Source: Federal Reserve Survey of Consumer Finances

$1.06M

Mean U.S. household net worth

Source: Federal Reserve Survey of Consumer Finances

When Do You Need a Net Worth Statement?

Applying for a business loan or SBA loan
Applying for a mortgage (especially jumbo loans)
Providing a personal guarantee for business debt
Financial planning and tracking progress
Estate planning and wealth management

Net Worth Statement vs. Personal Financial Statement

A Net Worth Statement can be informal - just a calculation of assets minus liabilities. A Personal Financial Statement is the formal, structured document that banks and lenders require.

For loan applications, you'll need a formal Personal Financial Statement (also called SBA Form 413 for SBA loans), not just a simple net worth calculation.

Create Your Net Worth Statement

BankReadyDocs calculates your net worth automatically and generates a bank-ready PDF.

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