Assets are cash, investments, and personal property that could you could sell for cash. Assets come in two forms, Liquid and Fixed. 

Liquid Assets can be easily converted into cash in a short amount of time. These include cash accounts (checking, savings, money market), investments accounts (retirement, general investment, cryptocurrencies), and some personal property (furniture, electronics, jewelry). These assets should be valued at their current or market value.

Fixed Asset takes a bit longer to sell. These include real estate (primary home, vacation/investment property), vehicles (cars, truck, boats), and businesses (partnerships, sole proprietorships, corporations). Fixed assets should be valued based on their market value. If the market value isn’t available, you can use the appraisal value or an estimated value based on the recent sale of similar items. You should aim to be conservative in these estimates so you don’t over state your net worth.

Liabilities  is debt taken on to purchase assets, attend higher education programs, or fund your lifestyle. Liabilities can be classified as either Current or Long-Term. Liabilities are valued as the principal amount outstanding (or due) as of the date of your Net Worth calculation.

Current Liabilities are debt that is usually paid off in one year or less, and typically include credit card debt, unpaid bills, payday loans, and taxes. 

Long-Term Liabilities take longer than one year to pay off, and typically include mortgages, personal loans or lines of credit, auto loans, student loans, and any other loans.

Your net worth (in its simplest form) is the value in cash you would have remaining if you were to sell everything you own and paid off all of your debts. The remainder (your net worth) can be positive or negative.

Negative Net Worth

Having a negative net worth is more common than most people think. Negative net worth usually occurs when someone is starting their career, graduating from college, or has high debt. The remaining negative amount (net worth) is technically what you would still owe to pay off your debt. To improve your negative net worth, consider reviewing or creating a budget so you can focus on paying down debt and saving more. 

Positive Net Worth

Having a positive net worth is one factor of being financially healthy (there are other factors). Positive net worth usually occurs when someone is debt-free or has accumulated significant assets. The remaining positive amount (net worth) is technically the amount of cash you would have remaining after all of your debt is paid. 

Your net worth should increase over time, so check it periodically to see how you’re progressing.

If your net worth isn’t increasing over time, than you may want to review your finances to find out why. Your net worth could be decreasing because of many factors, including not saving enough, living beyond your means, taking on additional debt, or buying assets that decrease (instead of increase) in value. To correct these issues, review your budget to make sure you’re not overspending, you’re saving enough to reach your goals, and you’re not taking additional credit card debt that could be avoided.

The Federal Reserve releases its Survey of Consumer Finances every three years, with the most recent report issued in September 2017 (based on data from a survey fielded in 2016). The median (middle) net worth of the 2016 Survey was $97,300.

Below, you can compare your net worth to the survey’s median net worth by income, age, family size, education and race/ethnicity.