Methodology
Net Worth Calculator Methodology
How the calculator aggregates assets and liabilities to compute net worth.
By Yadav PatleLast updated:
Formula
Net Worth = Σ Assets − Σ Liabilities
Variables
| Symbol | Name | Description |
|---|---|---|
| Assets | Total assets | Sum of all entries on the assets side, valued at current market value (not purchase price). |
| Liabilities | Total liabilities | Sum of all outstanding principals on loans, credit cards, BNPL, taxes owed. |
Worked example
Assets ₹1.24 cr (savings 6L, MFs 18L, EPF 9L, apartment 85L, car 6L) − Liabilities ₹65.4L (home loan 62L, car loan 3L, credit card 0.4L) = Net Worth ₹58.6 lakh.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- Asset values are user-entered and assumed mark-to-market. Outdated valuations distort the snapshot.
- Loan balances are outstanding principal, not original loan amount or remaining EMI total.
- Illiquid assets (real estate, EPF) are included at full value; consider tracking a separate 'liquid net worth' that excludes them.
Authoritative sources
Where the formula, rates, or framework come from:
Try it now
Plug in your own numbers in the Net Worth Calculator and see the formula applied in real time.
This methodology page is for educational purposes only. Calculations are estimates; real-world results vary with taxes, fees, expense ratios, and market conditions. Yadav Patle is not a SEBI-registered investment adviser. For personalised advice, consult a registered adviser.