Income tells you how much you earn. Net worth tells you how much of it you have kept. It is the single best number for checking whether your finances are moving in the right direction.
The formula
Net worth
Everything you own (at today’s value) − everything you owe (outstanding principal).
What counts as an asset
- Bank balances, FDs, RDs and liquid funds.
- Mutual funds and shares at current market value.
- EPF, PPF, NPS and VPF balances.
- Gold and sovereign gold bonds at today’s price.
- Property at a realistic resale value, not the builder’s latest price list.
- Surrender value of traditional insurance policies (not the sum assured).
Leave out your car and gadgets, or count them at a heavily depreciated value. They lose value every year and you will not sell them to fund a goal. Term insurance has no asset value.
What counts as a liability
- Outstanding principal on home, car, personal, education and gold loans.
- Credit card balance, including unbilled EMIs.
- Money borrowed from family or friends that you intend to repay.
Worked example
| Assets | Value | Liabilities | Owed |
|---|---|---|---|
| Savings + FD | ₹4,00,000 | Home loan | ₹38,00,000 |
| Mutual funds | ₹9,50,000 | Car loan | ₹3,20,000 |
| EPF + PPF | ₹12,00,000 | Credit card | ₹45,000 |
| Flat (resale) | ₹65,00,000 | ||
| Gold | ₹3,00,000 | ||
| Total | ₹93,50,000 | Total | ₹41,65,000 |
Net worth = ₹93.5 lakh − ₹41.65 lakh ≈ ₹51.9 lakh. Excluding the house you live in, the ‘liquid’ net worth that can fund goals is about ₹28.5 lakh minus the non-home loans: roughly ₹24.9 lakh.
Track the trend
Update it once a month or once a quarter on the same date. A rising line means you are saving and investing more than you borrow and spend. Market dips will cause wobbles; look at the 12-month direction, not one month.
Calculators for this guide
Finkoin tip
Add your assets and loans on your Finkoin profile to see your net worth with a tap-to-expand breakup.
Try it on Finkoin →FAQs
Clear answers in plain language. Educational guidance only.