Skip to content

Demo environment. Sample data and demo handoffs only — no real accounts or transactions.

GlossaryPlanning

Net worth

Everything you own minus everything you owe — a snapshot of your financial position at a point in time.

Net worth is the value of all your assets — bank balances, investments, retirement accounts, gold, property and anything else of value — minus all your liabilities, such as home loans, vehicle loans, personal loans and credit card balances. It is one number that summarises where you stand financially today.

Why it matters

Income shows what flows in; net worth shows what you have built. Tracking it once or twice a year reveals whether your position is genuinely improving — whether savings and investments are outpacing debt — in a way monthly budgets cannot.

How to read it

  • Direction over level. A net worth that rises over time matters more than the number at any one moment.
  • Liquid vs illiquid. A net worth dominated by the home you live in is very different from one built on liquid investments. Separate what you could actually use for goals.
  • Value assets realistically. Use current market values, not purchase prices, and be conservative with property.
  • Include every debt, including small ones that are easy to forget.

Common misconceptions

  • “High income means high net worth.” Spending and debt can absorb any income. Net worth reflects what is kept.
  • “Negative net worth means failure.” Early in a career, with a new home loan or education loan, it can be normal. The trajectory matters more.

Note: The Wealth Lab calculates your net worth and breaks it down by asset class from the figures you enter.

Formula

Net worth = Total assets − Total liabilities

Worked example

For illustration, assume ₹12,00,000 in mutual funds, ₹3,00,000 in FDs, ₹2,00,000 in savings and a home valued at ₹80,00,000, against a home loan of ₹55,00,000 and a car loan of ₹4,00,000. Net worth = ₹97,00,000 − ₹59,00,000 = ₹38,00,000.

Figures are for illustration only — not a forecast or a recommendation.

Related terms

  • Savings rate

    The share of your income you save or invest each month — one of the strongest levers on how quickly you can reach your goals.

  • Debt-to-income ratio

    The share of your monthly income that goes to loan repayments — a measure lenders use, and a useful check on financial strain.

  • Asset allocation

    How you divide money across asset classes such as equity, debt, gold and cash — the biggest single driver of a portfolio’s risk and behaviour.

  • Emergency fund

    Money kept safe and easy to reach to cover several months of essential expenses if income stops or an unexpected cost arrives.