The basic calculation
Net worth is calculated with a simple formula:
Assets − liabilities = net worth
Assets are things you own that have financial value.
Liabilities are debts and balances you owe.
For example:
- Total assets: $185,000
- Total liabilities: $42,000
- Net worth: $143,000
A positive net worth means your assets are worth more than your debts.
A negative net worth means you owe more than the value of what you own.
What counts as an asset?
Assets are anything you own that has measurable financial value. Common examples include:
- Cash in checking and savings
- Brokerage and investment accounts
- Retirement accounts such as 401(k)s and IRAs
- Cryptocurrency and other digital assets
- Home equity and other real estate
- Vehicles
- Business ownership interests, when valued
- Other personal property that has a clear market value
For example:
- Cash and bank balances: $30,000
- Investments and retirement accounts: $120,000
- Home equity: $90,000
- Car value: $12,000
- Total assets: $252,000
Not every item people own should be stretched into an asset for a useful net worth picture. A worn pair of shoes rarely belongs in the total. A house, car, or investment account usually does.
What counts as a liability?
Liabilities are what you owe. Common examples include:
- Credit card balances
- Personal loans
- Auto loans
- Student loans
- Mortgages and home equity loans
- Medical debt
- Other installment or revolving debt
For example:
- Credit cards: $4,000
- Auto loan: $18,000
- Student loans: $25,000
- Mortgage: $210,000
- Total liabilities: $257,000
If an asset is financed, both sides usually matter. A $40,000 car with a $28,000 loan adds $40,000 to assets and $28,000 to liabilities, for $12,000 of equity in that vehicle.
A full example
Imagine a household with this mix:
Assets
- Checking and savings: $35,000
- Investments: $65,000
- Retirement accounts: $110,000
- Home equity: $180,000
- Car value: $18,000
Total assets: $408,000
Liabilities
- Credit cards: $5,000
- Auto loan: $12,000
- Student loans: $24,000
- Mortgage: $220,000
Total liabilities: $261,000
Net worth
$408,000 − $261,000 = $147,000
That $147,000 is the household’s net worth on that snapshot. It includes cash, investments, home equity, and debts together, not just money sitting in a checking account.
Net worth is not the same as cash
Net worth is not the amount of money you can spend today.
It often includes value locked in:
- Retirement accounts
- Brokerage investments
- Home equity
- Vehicles and other less liquid assets
Someone can have a net worth of $250,000 and only $4,000 available in checking. That is common. Net worth measures the overall balance sheet. Cash measures spending power right now.
Net worth is not the same as income
Income is money you receive over a period of time.
Net worth is the value of what you own after subtracting what you owe.
Someone can earn a high income and still have a low net worth if spending and debt stay high.
Someone with a lower income can build a higher net worth by saving, investing, and paying down debt over time.
Why net worth changes
Net worth changes whenever the value of your assets or liabilities changes.
It may rise when:
- You save more than you spend
- You invest more
- Investments or crypto gain value
- Your home or other assets increase in value
- You pay down debt
It may fall when:
- You spend down savings
- Investments lose value
- You take on new debt
- Credit card or loan balances grow
- An asset loses value
Paying $1,000 toward a loan usually raises net worth because the amount you owe shrinks.
Moving $1,000 from checking to savings does not change net worth by itself. The money is still yours. It only changed accounts.
How Rankk calculates net worth
Rankk uses the same formula: assets minus liabilities.
In the product, those totals usually come from the financial accounts and balances connected to Rankk. The more complete that picture is, the closer your Rankk net worth will be to your full household balance sheet.
If an important account is missing, the total can look too low or too high. A missing savings account leaves assets incomplete. A missing credit card leaves debts incomplete.
Learn how to connect a financial account.
Why your Rankk total may look different
Your Rankk net worth may differ from a number you calculated yourself when:
- An account or asset is not connected
- A balance has not updated
- Investment or crypto values changed
- A debt still shows an older balance
- You included something Rankk does not currently have, such as a car value or private asset
Compare the accounts and balances included in Rankk with the ones you used in your own math.
Learn more about missing or outdated account information.
What if my Rankk net worth looks wrong?
Review:
- Which assets are included
- Which debts are included
- Whether any account needs to be refreshed or reconnected
- When each account last updated
- Whether market values recently moved
- Whether the balances match your financial institutions
Do not remove an account as your first troubleshooting step. Try refreshing or reconnecting it first.
If the total still appears incorrect, contact Rankk support.
Include:
- The account or balance that appears incorrect
- The amount shown in Rankk
- The amount you expected
- When the account last updated
- A screenshot, if helpful
Do not include your password, verification code, or full account number.