Calculating your net worth

Your net worth is the amount by which your assets (what you own) exceed your liabilities (what you owe). In simple terms, assets minus liabilities equal net worth.

Keep in mind that your net worth isn’t a lifetime scorecard. It’s simply one way to measure your financial health.

How it's used

Net worth determines how much you can borrow and how you’ll pay for it.

What’s an asset?

An asset is the possessions of an individual or corporation that can be used as a potential source of collateral for a loan. Assets can include cash, life insurance, investments, automobiles, recreational vehicles, residences and furnishings.

What’s a liability?

A liability is any amount an individual or corporation owes to a creditor. Liabilities can include amounts owing on credit cards, loans, borrowings on life insurance, mortgages and other liabilities.

Sample net worth calculation

Asset Amount
Car $5,000
Home $100,000
RRSP $5,000
Total assets $110,000
Liability Amount
Credit cards $2,000
Personal loan $80,000
Total liabilities $82,000
Net worth $28,000