Net worth

For individuals, net worth is simply the amount by which assets exceed liabilities. Net worth is usually tracked with a net worth statement. Individuals may also want to prepare statements which measure the value of an estate for estate tax evaluation as well as a statement showing the amount of the estate subject to probate.

Net worth statements
Reasons for creating a net worth statement include:
 * To check your progress towards financial goals;
 * To plan for changes in assets or liabilities;
 * To keep tax liability to a minimum;
 * To estimate how well dependent survivors would be able to live off their current inheritance if you were to die in the near future;
 * To determine the need for life and property insurance;
 * To serve as a reminder to make adjustments in insurance coverage or assets held;
 * To give an estimate of retirement savings progress;

Assets
For U.S. citizens, general asset categories included in the net worth statement include :
 * Bank accounts: commonly the value of checking and savings accounts; certificates of deposit.
 * Investment accounts: commonly the market value of stocks, bonds, mutual funds.
 * Retirement accounts: commonly the market value of employer-provided contribution plans and personal retirement plans.
 * Residential and other real-estate: the market value of property
 * Cash value of insurance or pensions
 * Market value of personal property: commonly autos, furnishings, and jewelry.
 * Other assets: often this will include business related assets (business value, notes receivable,etc.)

Liabilities
Liabilities include:
 * Credit card balances
 * Lines of credit balances
 * Car loan balances
 * Mortgage balances
 * Student loan balances
 * Other debts
 * Taxes due

The following table provides a sample net worth statement. The net worth is calculated as:


 * Net worth = (Total assets) - (Total liabilities)
 * $170,000 = $397,000 - $227,000

Net worth calculators

 * Bankrate.com
 * Smartmoney.com