How To Calculate Wealth

Wealth measures the value of all the assets of worth owned by a person, community, company or country. Wealth is determined by taking the total market value of all physical and intangible assets owned, then subtracting all debts.

How to Calculate Your Net Worth:

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Make a list of all of your assets:

This includes retirement savings, your current checking and savings account balances, any bonds you might have, the total value of any stock holdings you might have, your home, and your automobiles. Do not include any physical assets less valuable than the car, but you can do this if you wish.

Usually make a list that says ASSETS in big letters at the top. Underneath that, on the left, list what the asset is and on the far right, the value of that asset so that the decimal points of all of the assets line up. This makes the calculation of your total value much easier.

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Once you’ve listed every asset you can think of, write TOTAL in big letters over on the left, then add up the numbers. Once you have this total, you’ve got the total value of your assets.

Make a list of all of your debts:

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You should list all of your credit card balances, personal loans, student loans, auto loans, home loans, and so forth. Much like with the assets list, it is recommended a big header that says DEBTS, with each debt listed below that on the left side and the amount of the debt over on the right, with the decimals lined up for easy figuring.

Once you’ve listed all of your debts, write TOTAL in big letters on the left, then add up all of the debt numbers. This total is the total amount of all of your debts.

Subtract:

Take your total assets and subtract from that your total debt. The resulting number is your net worth.

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Post Author: Muraya Muya