Net Worth: The One Number That Actually Tells You Where You Stand
Income tells you how much comes in. Net worth tells you how much you've kept. It's the clearest picture of your financial position — and it's simpler to calculate than you think.
Most people think about their finances in terms of monthly income. How much they earn, how much they spend, whether they're getting by. Income matters — but it tells you surprisingly little about where you actually stand financially.
Net worth tells you far more.
The Formula
Net Worth = Total Assets − Total Liabilities
That's it. Add up everything you own. Subtract everything you owe. What's left is your net worth.
What Counts as an Asset
- Cash and savings accounts
- Investment accounts (stocks, ETFs, index funds)
- Pension or retirement accounts
- Property (current market value, not purchase price)
- Vehicles (realistic resale value)
What Counts as a Liability
- Mortgage balance outstanding
- Student loan balance
- Car finance balance
- Credit card balances
- Personal loans
Why It Matters More Than Income
A person earning £80,000 a year with £120,000 in debt and no savings has a lower net worth than someone earning £35,000 who's been saving steadily for five years. Income is a flow. Net worth is the result.
High earners with no assets are financially fragile. Modest earners who save consistently build real security over time.
How to Use It
Calculate your net worth today. Don't worry about the number — just establish the baseline. Then track it monthly or quarterly. The trend matters more than the absolute figure.
You can log your assets and liabilities in the dashboard and watch your net worth update automatically.
Plan to Compound
Put this into action
Use the Wealth Simulator to see what your savings look like in 5, 10, or 20 years — with real numbers.