Calculating Your Net Worth for Real Estate Investing

Calculating your net worth is so important. We recommend doing so regularly in order to reach your financial goals. You might think that calculating your net worth seems daunting, but the process is quite simple.

Finding your exact net worth is as simple as addition and subtraction. To us, it’s motivating to track our net worth and determine if we are on track to reaching our financial goals. Here’s how you can calculate your net worth:

You’ll begin by making a list of everything you own that is of value. Include your real estate investments, cash accounts, stocks, and 401k. Other assets could be college savings accounts, vehicles you own, and art. Include anything that is cash, or could be sold for cash.

You should also assess all of your liabilities. This includes all of your debts. Include the remaining balance on your mortgage and car loans, any credit card debt, a HELOC, etc.

Then you subtract your liabilities from your assets to determine your total net worth. Another way to think of this is if you were to sell everything you own and pay off all of your debts, your net worth is what you would have left. If you want an exact template to use, there’s a freebie on Natali’s website.

How would your net worth change by purchasing one more rental property? Or two? It's fun to imagine. Remember Kiyosaki's advice: rich people buy assets! 

It’s motivating to track our net worth and determine if we are on track to reaching our financial goals. Here’s how you can calculate your net worth