How to Create a Personal Statement of Net Worth

A personal statement of net worth reveals the total value of everything valuable that you own after deducting the aggregate sum of everything that you owe. Preparing a reasonably accurate statement of net worth requires an inventory of all your assets with their estimated fair market value and the list of all liabilities, debts and loans with precise specifications of the actual amounts owed.

Many people use statements of net worth to assess and track their personal wealth to help them meet their long-term financial goals. Sometimes a statement of net worth is prepared for a specific purpose, such as in preparation for a divorce settlement, a loan application or an investment opportunity. Depending on the use, the valuation of assets and liabilities is expected to be more or less precise and up-to-date.

The mechanics and the math for preparing the statement are very simple and straightforward. The biggest challenge is to make sure that you include all applicable assets and liabilities, overlook no significant item and reflect them at appropriate values. Sometimes, however, you may find that appraising the worth of some of your assets, especially real estate and certain types of investments is not an easy task. Miss-estimating your net worth can lead to unpleasant surprises and potentially bad financial decisions, so it is worth spending some time on getting the numbers right.


Most people own a combination of financial assets, properties and other high-value tangibles. Some have more ‘exotic’ types of assets: a business, or participation in a firm or stock options.

Financial assets

Most financial assets such as cash, checking and savings accounts, CDs, 401K and brokerage accounts, mutual fund investments, college savings funds are easy to tally and quantify. Most have well-defined values, readily available on account statements, paper or online. The cash value of life insurance should also be included here.

Some people own individual stocks and bonds. Finding the prevailing market value of securities of public companies – whether equity or debt – should be relatively straightforward, but for bonds, especially for those with close enough maturities, using the face value can work, too.

Real estate

Estimating the value of real estate properties can be tricky these days, given the continuing uncertainty and upheaval in the real estate market. Using the purchase price of a property purchased within the last 1 or 2 years is reasonable. With real estate acquired more than a few years ago, the old purchase price will probably not provide a good estimate for its current value. Realty websites such as Trulia provide information on recent home sales in your neighborhood that can be used as proxies or benchmarks. Some sites like Zillow calculate estimates for the prevailing value of your specific property, if you are willing to provide information on your house to them, based on sales of comparable properties. If you need a very accurate estimate, you can hire a professional appraiser to prepare a detailed estimate for a fee of a few hundred dollars.

Assessing the value of more illiquid or unique properties, such as land, commercial real estate or properties in foreign countries can be even more challenging and costly. If a new appraisal is not feasible or affordable, you can apply to the original purchase price a general appreciation and depreciation rate indicated for the region or property type.

Non-property tangible assets

Tangible assets of value can include vehicles, special equipment, furniture, valuable household items, art and jewelry. Vehicles can be easily valued using one of the available online appraisal resources such as Kelly Blue Book  or Edmunds.

Commonly used household appliances and equipment can be valued relatively easily, too, as physical and online secondary market places exist for many or they can be depreciated reasonably well using simple straight-line depreciation.

Estimating the worth of unique and special items such as designer furniture, art or collectibles is harder. Increasingly, there are online resources available for estimating the value of certain types of art or collectibles. However, if you need reliable estimates for high value items in your possession, you should hire a specialized professional appraiser for the job.

Business interests and investments

The final group of assets includes more complex investments and business interests. The value of a business owner’s firm can make up a significant portion of his net worth. A limited liability business should be appraised for the value of its equity: i.e. after deducting the business’s obligations from the total value of the firm. Depending on the complexity of their company, an accounting or valuation firm or a more general accountant can provide an assessment of its value.

Employees of start-up firms may have restricted private stock or stock option holdings. These securities are especially hard to value even for finance professionals and a more conservative valuation may be the prudent approach for including them in the statement of net worth.


Compiling a list of debts and liabilities should be relatively straightforward. The outstanding balances are readily available for the most common types of debt: car loans, mortgages, bank credit lines, credit card debts, home equity lines, leasing contracts for cars or other equipment, installment plans. If you have non-traditional obligations, such as peer-to-peer loans, special payment arrangements, loans from relatives and friends, you should make sure to include all of these debts’ outstanding amounts in your liabilities, as well. The items to focus on are the outstanding balances, the total amount owed for each type of obligation.

Business owners should not include the liabilities of their limited liability company as the calculation of the firm’s equity value included under the owner’s assets has already deducted the obligations from the firm’s total value.

Net worth

Once you have listed and valued all assets and liabilities, you can calculate your net worth as the difference between everything owned and the amounts owed. If the value of total assets exceeds the total amount of debts and obligations, you have a positive net worth, if more is owed than owned, net worth will be negative.

Net worth is rarely static, even without significant additions to either assets or liabilities it can fluctuate. Typically, asset values are more volatile in the short run, too, especially stocks, 401(k), mutual fund and other non-fixed income type investments. Real estate property can lose or gain significantly in value over longer periods. Other assets, such as equipment or vehicles, depreciate over time as they are being used up. While short-term fluctuation in the value of your assets is not worth tracking in detail, unless you are in a situation where you can make a decision to easily and quickly ‘get out’ of certain assets, following the longer-term trends is recommended for everyone.


You can compile a statement of net worth on a sheet of paper, especially if you have few assets and liabilities of straightforward valuation. The Internet offers many simple wealth calculators for ad- hock, one-time uses.

However if you have a more diversified portfolio of investments and debts, you may consider a spreadsheet application for setting up a more dynamic statement that can be rolled forward to reflect changes in your wealth.

Individuals with more complex finances and a wider range of investments and liabilities can leverage one of the many different desktop or online personal software applications. Most of these programs allow or even require users to import detailed information about their accounts and wealth. Some like Mint can be configured to automatically collect and refresh most information about the value of your assets and liabilities, including options to incorporate free estimates from online resources for real estate properties.

While there are many tools and applications available for calculating and monitoring your net worth, some of the most important inputs into its calculation, the value of real estate properties and other investments, are not easy to quantify. Certainly, no available system or calculator will be able to predict the value of your assets a few months or years from now. In the absence of such intelligence, the best approach is to periodically refresh and reassess your statement of net worth with fresh estimates to ensure that you have the right information to see whether you are on the right path to achieve your personal financial goals.