Calculating your net worth

What is your net worth?
What is your net worth?

Knowing your net worth can be both exciting and scary. Exciting if you’re doing well and your finances are looking good, but scary if not. Either way though it’s good to know what your current situation is as it’s impossible to improve anything that you don’t measure.


Your net worth is the value of all your assets – physical things that you own – and your investments, bank accounts and cash, less all your debt. It’s your overall financial status – how well (or not so well) you are really doing once you take what you have less what you owe.

Think of Nandi who owns a fancy flat in Sandton, drives a nice car and forever posts amazing pics on Instagram. It could be that it’s all bought on debt and that her net worth is very low, perhaps only R100 000. She has nice things that are worth a lot of money, but also has a ton of debt.

Compare her with Ari who lives with his parents, has some investments and drives a cheap but fully paid-up car. He doesn’t have any debt and invests his money wisely. His net worth may be about R350 000 which is a far better position than Nandi.

Outward appearances can easily hide the true state of our finances; even from ourselves as we’re often too scared to really look. And buying things on debt is particularly dangerous as one’s circumstances can easily change and you can quickly find yourself in a desperate situation.

Read: How much does your boss earn? Do you really want to know?


Take a piece of paper (or a spreadsheet) and note down everything that you own that has value. Generally speaking, you would include the following items and write down how much each is worth now if you sold it (not what you paid for it). Also don’t worry if it is not yet paid off, right now we’re interested in how much it is now worth.

  • Your house and any investment properties;
  • Cars / motorbikes / scooters or bicycles;
  • Big furniture;
  • Jewellery;
  • Gold / precious metals;
  • Investments (retirement annuities, pension/provident funds, tax-free saving or investment accounts, shares, unit trusts, etc);
  • Cash in the bank; and
  • Collectables or antiques that have resale value.

Electronics and clothing are generally not worth adding to the calculation. These items depreciate far too quickly.

You may buy a laptop for R10 000 but you’ll struggle to sell it for R5 000 – no one wants a second-hand laptop. Same for cellphones, cameras and clothing.

If you’re feeling stuck making up this list, go through each room of your house and see what you have. And then go through all your investment accounts and log in to see the current values.


Next up, note down all your debts. It’s important to note down every debt that you have, even if it’s just a few hundred rand. Think of the following:

  • Home loan;
  • Car finance;
  • Personal loans;
  • Credit cards;
  • Store accounts; and
  • Family loans.

It’s important to know how much you owe on each debt so that you can start looking at unwinding the debt spiral that is so easy to get trapped into.


Once you know your assets and liabilities you can do the following:

Total value of assets – total value of liabilities = net worth.

It’s really that simple.

This figure is good to know as it helps you understand your overall financial situation.

Sometimes you might feel stressed or overwhelmed about some aspect of your finances but when looking at the bigger picture you might see that you’re actually in a good overall financial health. Or perhaps not, but that can be a motivating factor.

Your net worth is very different to your month-to-month cash flow and you need to employ different strategies to ensure that both aspects of your finances are in a healthy state.

Understanding your net worth is a great place to start and tracking the figure annually can help you asses your ongoing financial health as you should ultimately grow your net worth over time.

Brendan is a personal finance blogger at

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August 2020

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