Why You Should Use A Net Worth Calculator


Most people hardly know what they are actually worth but when asked about their net worth, they might think this only accounts for what they have in a bank. For the vast majority of people, their savings and checking account amounts to less $20,000 for an individual and is not triple their salary by the time they are in their middle age. To calculate the average net worth, it is a simple formula of what you own that has value to it minus what you owe. Anything that is considered to have a value and can be sold is part of your net worth. In other words: assets - liabilities = net worth. [ Source: https://www.cnbc.com/select/average-net-worth-by-age/ ]

If you aren't worth much, don't worry too much. If you are young, you have your life ahead of you and time to obtain and grow your assets. Just remember that those with the most still die with nothing. However, while you are alive, it makes sense to acquire some assets in your name, and even use those assets to borrow equity or sell off for cash or something else of value. Many people use their assets to add more assets into their net worth, such as acquiring new property with downpayment by refinancing or using another asset as collateral.

There are times where your assets may be used by the bank or government as collateral or to put a lien against you. For example, at 53 years old, my mother had a stroke, and required a lot of long-term healthcare. My mom was unable to afford this through her general health insurance, so as a result, she signed over her house that was in her name at the time. The mortgage to the house was eventually paid off, but when the house is sold, the state will reap the benefits.

Is it unfair? Of course, it seems that way for her children, who will not get a dime from the proceeds of the sale of her house when she is leaves this Earth. For the time being while my mother is alive, however, combined with my mother's current Blue Cross Blue Shield health insurance along with Medicare and Medicare and Social Security, for which she pays $200 a month, her hospital and ambulance bills come due and they send her a statement in the mail for the amounts. For the amounts due, however, she actually owes nothing. These healthcare costs can yield up to $100,000 due, but my mom nor her children are responsible for any of the costs. Instead, her New Jersey home located on the Bay, which has a Zillow estimated value of around a half a million dollars, will be in the hands of the government.

Lucky for me and my siblings, we all are working adults, two of whom currently own homes and another working to save for her first downpayment on a house. Instead of being upset about what we aren't getting when my mother passes, we focus on the fact that my mom is still with us and has the best healthcare she can receive when she needs it. There could be times where your assets are used as a liability against you in exchange for something else. Is there a way to protect your assets so they go to your children instead of the government? Absolutely. While we won't get into the full details here, there are two ways to do it: putting your assets into a Trust with your children as the beneficiaries, or putting the Title of the house in your children's names.

So how do you exactly calculate what your net worth is and ultimately how much you are worth? Many people who acquire at least one house in their lifetime are worth well over $100,000. Add in cash from all of your bank accounts and investments such as a stock portfolio or other real estate or even a car and you know your value. There are dozens of calculator platforms out there and even some that will remember who you are so that you can add to it over time. These platforms may come in handy in the event of your death or in the event that you want to exchange assets, sell off assets, or buy more assets in order to keep track of everything.

These calculators are:

There are tons of calculators out there. Of course, it does make it easier to keep track of everything which, of course, if you have anything that you are trying to hide, could work against you. However, for the most part, these tools will likely only be seen by your own eyes and anyone you grant access to view. It helps you organize your life and know what you actually have as no one but you can really ever keep track of all that you own. No matter what age you are, it is always good to see how much you are worth and design your wishes according to your life. You may even design your Will according to your net worth, including what you want done with your assets while you are living, incapacitated, or no longer alive.

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