How to calculate your net worth: the five-line method

What's your net worth, right now, without looking? The question sounds simple. Try answering it off the top of your head: almost nobody can, and it has nothing to do with the amount. It's about how scattered everything is — a current account here, savings there, a workplace pension somewhere, a loan whose outstanding balance you no longer know.

The calculation itself takes five minutes once a month. Here are the five lines you need, and the mistakes that distort the result.

What net worth means exactly

Net worth is the difference between what you own and what you owe. Nothing more, nothing less.

Net worth = total assets − total liabilities

It isn't your savings, your income or the value of your home. A homeowner with a €300,000 property and a €280,000 mortgage has a lower net worth than a renter with €40,000 set aside. That's precisely what this number is there to reveal.

The five lines of the calculation

Add lines 1 to 4, subtract line 5. That's it. A five-line table is enough — the forty-row templates get filled in once and then abandoned.

Valuing each item correctly

• Property: use a cautious estimate based on comparable homes that actually sold, not on online listings — asking prices are higher than sale prices.
• Loans: record the outstanding principal, not the sum of the remaining payments, which includes future interest.
• Investment and pension accounts: the current value on your latest statement, not the total you paid in.
• Car: its real resale value, which drops quickly.
• Possessions: only the ones you would really sell. A sentimental collection isn't an asset.

The four most common mistakes

1. Forgetting workplace savings. Pensions, employee share plans, profit-sharing: often several thousand that nobody looks at between annual statements.
2. Counting gross value instead of value after tax. An investment account with large unrealised gains isn't worth its displayed value if you have to cash it out.
3. Confusing wealth with cash flow. A comfortable net worth that's entirely locked up won't pay an unexpected bill. That's why an emergency fund is worth tracking separately.
4. Changing method from month to month. What matters isn't absolute precision but comparability over time. Keep the same method, even if it's imperfect.

How often to update it

Once a month is enough, and it's actually better. Tracking daily turns a long-term indicator into a source of anxiety, especially if part of your wealth is invested in the markets.

The ideal check-in lasts ten minutes, on a fixed date — the first Saturday of the month, for example. You note five numbers and close the file. The value comes from the series, not from any single snapshot.

After a year, the curve tells you something no bank statement shows: the real speed at which your situation is changing.

What to do with it next

Net worth on its own doesn't say much. Three companion indicators are enough to make it actionable:

• Savings rate — what you set aside relative to what you earn. It's the lever you have the most control over.
• Emergency fund — measured in months of regular expenses, not in euros.
• Allocation — how much is liquid, invested or locked up.

These four numbers fit in a single dashboard. That's what the Wealth Command Center template offers: net worth, budget, allocation and projections on one Notion page, updated in ten minutes a month.