The determination of a person’s net worth is from calculating the total amount of property they own and then subtracting any liabilities or debts. Property calculations for one’s net worth include any real estate, vehicles, jewelry, stocks, bonds and anything in a savings or retirement account. When calculating net worth, one does not include less valuable items, such as furniture or clothing, unless they have significant value as antiques or collectible items.
For example, if a person owns a home worth $100,000, a car worth $7,000, and has $65,000 saved for retirement in an IRA, the total amount of property they own can be said to be $172,000. If they owe $20,000 in student loans and $3,000 in credit card debt, their total liabilities add up to $23,000. Thus, their net worth would be $172,000 - $23,000, which equals $149,000.