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Understanding Net Worth: How to Calculate Total Assets

While some assets may seem insignificant, they all add up to your total assets, which directly impacts your net worth.

Justin Cupler

Contributing Writer at Tally

April 1, 2022

This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.

Throughout life, we collect a lot of stuff. And a lot of this stuff is clutter  – things that we’ll eventually sell at a garage sale or donate to charity. However, many of the items we interact with every day significantly impact our financial well-being. This is because they're all assets. 

But how much of an impact does that television or video game console have on our financial health? To understand their role in your finances, you must know how to calculate total assets. 

Below, we'll cover calculating total assets and how this calculation works into your greater net worth

What are assets? 

An asset is any resource that has economic value to a person, company or country. It's held with the expectation that it'll provide future benefits to its owner. This benefit can be cash flow, reduced expenses, increased sales or other financial gains. 

Examples of personal assets can include:

  • Automobiles

  • Real estate

  • Total equity in a home

  • Bank accounts

  • Retirement accounts

  • Equipment

  • Appliances

  • Electronics

  • Collectibles

  • Company assets (in a sole proprietorship with the business assets listed under your personal name)

There four main categories of assets: current assets, fixed assets, financial assets and intangible assets. 

Current assets

Current assets include anything of value an individual plans to convert into cash within one year. This would normally be liquid assets, like cash or cash equivalent, but it can also include stocks and bonds the owner plans to cash out within the next year. If you're a freelancer with clients who pay after you complete services, your accounts receivable — the cash these clients owe you — is also a current asset.

Fixed assets

Fixed assets or noncurrent assets are long-term assets that hold value that the owner plans to retain for a period of time of more than one year. A house is a great example of a fixed asset, as most people remain in their home for many years before selling it. However, a home that someone purchased to rehabilitate and sell for a profit in a few months would be a current asset. 

Financial assets 

Financial assets are any cash or cash equivalent a person holds without intent to liquidate. These can include cash, stocks, bonds, mutual funds and bank deposits. Financial assets don't always have a physical form, as their value is often determined by the supply and demand in their respective trading space. 

Intangible asset

Intangible assets are those that lack a physical presence but hold value. For example, if you invented a new gadget and got a patent, it would be an intangible asset. Or if you’re a stockholder with equity shares in a company, the shareholders' equity would be the intangible asset. 

How to Calculate Total Assets

Calculating total assets sounds like a massive undertaking but it's actually relatively simple. 


Step 1: Collect the market value of all your assets

Start by listing out all your assets — everything of value that you own, such as televisions, collectibles, cash, houses, etc. — and determine each item's approximate market value. You can write this out on paper or use an Excel spreadsheet — or an equivalent software — to make it easier. 

You can determine the market value in several ways. For collectibles, you can get them appraised or simply look online to see what price similar items are being sold for. 

For houses, you can look at either the appraised value on your property tax documents or have an appraiser perform a valuation to determine the actual market value. The latter will give you a more realistic market value, but it may cost several hundred dollars. 

For vehicles, you can use sites like Kelley Blue Book to determine the private party value of your car. 

For bank accounts and other financials, simply pull the latest financial statements and use those balances as their value. 

Make sure to subtract any improvements your assets require and to calculate any depreciation if you are forecasting the future value of the assets you own. 

Step 2: Add up the market value of all your assets

Take all the market values you've collected and add them up. The resulting number is your gross total assets. 

Step 3: Add up your total liabilities associated with the assets

Next, you must determine how much in liabilities are attached to the assets. A liability is any money owed, such as a loan or other lien. For example, this could be a mortgage on your home or a home equity loan you took out to rehab your kitchen. This could also be a mechanic's lien  — a lien placed on a vehicle for an unpaid repair bill — on your car. 

Take all these liabilities — only those associated with your assets — and add them together. 

Step 4: Subtract total liabilities from your gross total assets

The final total assets formula is your gross total assets minus your calculated liabilities. The result will be your final net total assets. This is the number you'd use when a financial institution asks for your total assets. 

What's the difference between total assets and net worth?

Total assets and net worth are related, but total assets are a part of your net worth. Net worth requires a little more calculation. 

To calculate your net worth, take your total assets, then subtract all your liabilities not associated with the assets, such as credit cards, personal loans, other fees owed to lenders, judgments and more. 

The result of this subtraction will give you your total net worth.

Why would I need an assets calculator? 

Whether you use pen and paper or an Excel template as an assets calculator, there are several reasons you'd need to know your total assets. 

Applying for a large loan, such as a mortgage or a small business loan is a common reason you’d need to calculate your assets. The lender will want to know your total assets to understand your liquidity — your ability to come up with cash by selling assets — should you default on the loan. 

Another time you might calculate them is in a legal proceeding, such as a divorce or a personal injury case. The court will want to know your liquidity to determine how to divide the assets or how much you can afford to pay in a settlement. 

Other times, it may be just for your own reference. It's always good to keep tabs on your net worth and total assets, as these are key metrics in your overall financial health. You may want to keep an ongoing list of your assets along with a personal balance sheet and personal income statement as part of your financial planning and tracking.

Check your financial health by calculating your total assets 

Your total assets play a critical role in your overall financial health. While they're not always liquid assets you can easily access, your total assets show you have untapped resources (unless your overall net worth is in the negative). This also helps banks and other lenders feel more secure in lending you money. 

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