How to Calculate Your Networth

How to Calculate Your Networth

October 1, 2020

Every day, we get to see or hear stories of how some individuals are worth a particular amount and based on this considered the world’s richest people. Have you for once thought to yourself what or how much you are actually worth?  Well, if you haven’t,  you probably will at some point in your life.

The term ‘Net Worth’ means the total sum of all your possessions from your cash to your home value, and then deducted from your debts, i.e. mortgage, car or credit card. In simpler terms, your net worth is what you have left after subtracting your liabilities from your assets. To calculate your net worth, you must first understand what your assets and liabilities are. 

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. In simple terms, an asset is anything of value or a resource of value that can be converted into cash. Now you might be asking again what then are my assets? I have a car now so that should be an asset. Well, you are absolutely correct in fact, your house, car, jewellry, clothing, computers, equipments, books, software, cash, stocks, bonds etc. are all assets but as you know, some of these assets might not be valuable anymore. For example, if your computer is one that isn’t working anymore and it cannot be used, you cannot add that as an asset because it has lost its value.

Now, you will have to estimate the value of these assets to be able to know your net worth

The best way of doing this is to start with the most liquid ones, i.e. the amount you have in cash and cash equivalents, which includes current and savings accounts, money market accounts, physical cash, treasury bills, money you have loaned out to people etc. 

Next, you can then move on to your investments, but remember you’ll be estimating based on their current market value. Some of these includes bonds, life insurance cash value, mutual funds, pensions, stocks and other investments.

Now that we are progressing, your real and personal property is next. Your houses, lands, shop, warehouses, etc. fall into this category. Remember they are the ones you own and have bought not the one you rented from someone or was leased out to you. The value of your property should be the amount people are willing to buy it for when you are desperate. This is the more conservative way of valuing real estate and one we recommend.

More so, you can now estimate the value of your cars, jewellry, equipments, computers etc. It is however important to accurately estimate the values of these assets rather than base your estimates based on perceived market price. A market value of these assets is a better method of estimating them.

Now that we have all these, add them all up and the amount you get represents the sum of your total assets. 


A liability is a debt owed that requires you to give up an economic benefit (cash, assets, etc.) to settle past transactions or events. Basically, a liability is something you owe and will need to be paid back. Your liabilities include mostly bank loans, taxes, bills (e.g. electricity, medical, phone, rent, school fees, etc.) , money you borrowed from friends, family members (IOU), etc. After listing out all these, you add them up then the total sum represents the sum of your total liabilities.

Now that you have estimated the total value of your assets and liabilities, you can now calculate your net worth.


Total Assets – Total Liabilities = Net Worth

For example, 

Let’s say these are your assets and their valued estimates

House : ₦5,000,000 

Car: ₦8,500,000 

Bank account balance: ₦2,000,000 

Value of stocks: ₦8,000,000

Equipment and Gadgets: ₦1,200,000

Now your liabilities and their valued estimates

Bank loan: ₦5,000,000

Bills (Annual Estimate): ₦2,000,000

Tax (Annual Estimate): ₦500,000

IOU: ₦200,000

Here’s how you will calculate your net worth in this scenario: 

Sum of total assets: ₦(5,000,000+8,500,000+2,000,000+8,000,000+1,500,000) = ₦25,000,000

Sum of total liabilities: ₦(5,000,000+2,000,000+500,000+200,000) = ₦7,700,000

Net Worth: ₦25,000,000 – ₦7,700,000 = ₦17,300,000 

This means in this case, your net worth would be ₦17.3 million (Seventeen point three million naira).

Finally, remember that knowing your net worth will help keep in check goals you have set to achieve and how can you work towards them if you’re falling short in achieving them. Would you like to calculate your net-worth ? Download the form attached and use it as a guide.

Use our chat bubble on the right to request for help!

Sharing this article!

Get Our Latest Research Updates

Sign up for updates on our research, news and opportunities

Select list(s) to subscribe to

By submitting this form, you are consenting to receive marketing emails from: Associated Asset Managers Limited, 20 Marina Street, Lagos, +23401, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact


© 2019 SAMTL Ltd. All Rights Reserved