When people hear personal net worth they are already thinking of the cash in their bank account. No dear, it’s not just the zeroes on there. There is so much more to personal worth than just your account balance. Are you ready? Get a pen and paper and take down this tea.

Your personal worth is basically an evaluation of what you own and owe. It is a combination of what you own (Your assets) and what you owe (your Liabilities). You may ask why this is important, it is for a couple of reasons, I will name 2:

  • It lets you understand your current financial situation.
  • It gives you a reference point for measuring progress toward your goals.

As you continue to earn and save, your net worth will grow. If your personal net worth is low or in the red, after measuring, you’ll need to work on saving more and spending less. To watch your progress, calculate your personal net worth now and recalculate it once or twice a year.

So, now to the actual reason we are here, calculating/measuring our personal net worth. This is a very simple process, it is more like having a checklist and doing some basic arithmetic.

  1. List your assets (what you own), estimate the value of each, and add up the total. Include items such as:
  • Money in your bank accounts
  • Value of your investment accounts
  • Your car (if you have one)
  • Personal property, such as jewelry, art, and furniture
  • Your house/ piece of land
  • Your business (if you are a business owner and it is a sole proprietary business/ shares from your limited liability business)
  • Cash value of any insurance policies (if you have one) and any other item that belongs to you.
  1. List your liabilities (what you owe) and add up the outstanding balances. Include items such as:
  • Mortgage (if you have one)
  • Cash loan (money borrowed from friends, family, colleagues etc.)
  • Bank loan (money borrowed from the bank if any)
  • Student loans (if any)
  • Rent
  • School fees
  • Credit on your card or goods purchased and any other item you have to pay for or money borrowed


After you have determined all of those items listed above, you can then subtract your liabilities from your assets to determine your personal net worth. As I mentioned earlier, this is not hard, I think the challenge maybe identifying items that are assets and those that are liabilities. If you get stuck, google is your friend to help you know the difference or shoot me an email at info@glaziang.com and it will get to me.




About The Writer

Benedicta Omoruyi is a professional security and investment officer(CIS), marketer and technical evangelist for InfoWARE Limited. She is a fierce writer, content creator, investment enthusiast and advocate, and an all round creative female.

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