Net worth basics
Liquid net worth vs net worth
Net worth is everything you own minus everything you owe. Liquid net worth counts only what you could turn into cash within days without a penalty: bank accounts, and usually shares and funds outside a pension. Your home, car and retirement accounts count toward net worth but not toward liquid net worth. Guides disagree on which debts to subtract, and the choice can swing the answer by hundreds of thousands, so this page shows both ways on one example.
What counts, and where
| Item | Net worth | Liquid net worth | Federal Reserve survey |
|---|---|---|---|
| Bank, savings, cash | Yes | Yes | Yes |
| Shares, funds, crypto (outside a pension) | Yes | Usually yes | Yes |
| Your home | Yes, at market value | No | Yes |
| Mortgage | Yes, subtracted | Depends on method (below) | Yes, subtracted |
| Car | Yes, at resale value | No | Yes |
| 401(k), IRA, SIPP, workplace pension pot | Yes | No, before access age | Yes |
| Final-salary (defined benefit) pension | Optional, hard to value | No | No |
| Social Security or State Pension | No | No | No |
| Unvested stock (RSUs, options) | No, until it vests | No | Mostly no |
| Furniture, clothes, electronics | Usually no | No | No |
| Money someone owes you | Yes, if you expect it back | Only if due soon | Yes |
| Your salary | No, it is income | No | No |
The last column is how the Federal Reserve counts net worth in its Survey of Consumer Finances (definition), the source behind most “net worth by age” figures. It includes your home, cars and retirement accounts, and leaves out final-salary pensions and Social Security because no agreed way exists to value a future income as a lump sum today. If you compare yourself with net worth by age, count the same things.
Two ways to subtract debts, and why it matters
Every guide agrees on the liquid assets. They split on the debts. Some subtract every debt you have, mortgage included. Others leave out debts tied to an asset you have also left out: if the house is not counted, neither is the mortgage, because selling the house pays the mortgage off. Take one household:
| Amount | Net worth | Liquid: all debts | Liquid: matched debts | |
|---|---|---|---|---|
| Home | $350,000 | + | ||
| Car | $18,000 | + | ||
| 401(k) | $90,000 | + | ||
| Brokerage account | $40,000 | + | + | + |
| Savings and checking | $18,000 | + | + | + |
| Mortgage | $220,000 | − | − | |
| Car loan | $6,000 | − | − | |
| Student loan | $12,000 | − | − | − |
| Credit card | $2,000 | − | − | − |
| Result | $276,000 | −$182,000 | $44,000 |
Both are honest numbers answering different questions. “All debts” asks what is left if every loan were called in tomorrow and you could only use cash. “Matched debts” asks how much you could actually reach in a hurry. For an emergency fund or a job loss, the second is the useful one. Whichever you pick, say which, and use the same one every month, or the trend means nothing.
The home, the car and the pension, one at a time
Your home. Count its market value, what it would sell for now, not what you paid, and subtract the mortgage. The difference is your home equity. It belongs in net worth even though you cannot spend it, because it is wealth you own. Selling costs (agent fees, taxes) are real, and some people knock 5 to 10% off the value to allow for them; that figure is a rule of thumb, not a standard.
Your car. Count what a buyer would pay today, minus any loan. Many guides say to leave cars out because they only lose value. Including them is more accurate; just update the value once or twice a year so a car bought for $40,000 is not still counted at $40,000 five years later.
Pension pots. A 401(k), IRA, SIPP or workplace pension you can see a balance for counts toward net worth. It is not liquid: in the US most withdrawals before 59½ carry a 10% additional tax, with exceptions such as leaving your job in or after the year you turn 55 (IRS). In the UK you cannot normally touch a private pension until 55, rising to 57 from 6 April 2028 (GOV.UK). Long-term schemes elsewhere, like India's EPF and PPF, have their own lock-in rules.
Final-salary pensions and state pensions pay an income, not a pot. Most people leave them out of net worth, as the Federal Reserve does. If you want to include a final-salary pension, use the transfer value your scheme quotes, and note that you did.
Which number to watch
Net worth tells you whether you are building wealth over years. Liquid net worth tells you how long you could last if your income stopped. A household can look rich on the first and fragile on the second, which is common for people whose wealth is mostly a house and a pension. To turn liquid savings into months of runway, try the emergency fund calculator.
In NetWorthTrackr, every account has an Include in net worthswitch, so you decide what your headline number counts, and Analytics > Categories shows how much of it sits in Real Estate, Retirement and Vehicle. Start with the net worth calculator if you just want the number once.
Common questions
Your cash and the assets you could turn into cash within days without a penalty, such as bank balances and shares or funds outside a pension, minus your debts. It leaves out your home, car and retirement accounts.
Not if you subtract the same debts from both. It can look higher if you leave the mortgage out of liquid net worth but your home is worth less than the mortgage, so check you are comparing like with like.
Yes. Count the home at what it would sell for today and subtract the mortgage. The Federal Reserve does the same in its net worth figures. Home equity does not count toward liquid net worth.
A pension with a balance (401(k), IRA, SIPP, workplace pot) counts toward net worth but not liquid net worth, because withdrawing early is penalised or not allowed. Final-salary pensions and Social Security or the State Pension are usually left out, as the Federal Reserve does.
You can, at what a buyer would pay today minus any loan. The Federal Reserve includes vehicles. Update the value at least once a year, because cars lose value steadily.