Money Management

How to Calculate Your Net Worth (Free Editable Template)

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Money is a made-up concept humanity created to assign (approximate and false) value so that trades are easy to conduct, but why not, today let’s learn how to calculate your net worth.

Before we start, a quick one: your net worth is in no way is indicative of your worth as a human being (you’re special, just like everyone else bb). Whether your net worth is high or low, at the end of the day, we will all be buried in the same soil buddy. So it’s like, important, but also, not really.

Cheery intro, isn’t it?

How to calculate your net worth

Net worth calculation follows a very basic formula: Total ASSETS minus total LIABILITIES equals NET WORTH. That’s it.

To illustrate:

  • Total Assets: RM500,000
  • Total Liabilities: RM100,000
  • Therefore, Net Worth: RM400,000

Simple. But of course, there are different types of assets, and different types of liabilities, so that’s the devil in the details that we’re tackling today.

Types of Assets and Liabilities

There are two types of Assets and two types of Liabilities

  • Liquid Assets – Cash, investments and items of value that can be easily converted to cash
  • Illiquid Assets – Investments and items of value that are harder to convert to cash
  • Short-term liabilities – Debts to pay off in the immediate future (~a few months up to a few years)
  • Long-term Liabilities – Debts to pay off over a long period of time

Now, what kinds of assets are liquid and illiquid, and what are regarded as short-term and long-term liabilities, you ask? And how do you calculate them in one table?

Net Worth Table (+ Editable Version)

Here you go: an example of a Net Worth Table. See the types of assets that fall into Liquid and Illiquid Assets, and what are considered short and long-term liabilities.

You can find the editable version here – simply make a copy into your own GDrive and add your own numbers.

As a general rule of thumb,

  • More Liquid Assets = better for weathering financial emergencies (ie No point if you have RM1,000,010 in assets if RM10 is in your bank and RM1 million is the value of the house you’re staying in)
  • Some Illiquid Assets are hard to appraise, and may be liquidated for significantly less if the owners are desperate for cash
  • (This is also why I believe in Liquid Investments >>> Other Investments and included it as one of my Money Rules)

Note: The calculation of Mortgage and Hire Purchase (under Liabilities) is actually complex and not that straightforward. It is enough that you know the approximate amount you have to pay back. If you really want to know the exact figure, you can hire a financial planner.

(This goes without saying, but worth mentioning: you don’t have to do ALL the investments and collect ALL the assets. Just the ones that makes sense and suitable to your knowledge and interest. More info: 3 Best Investments in Malaysia (+ The Best Way to Invest Your Money)

Why calculate your net worth

So what do you even do with this information?

The way I see it, the process of calculating your net worth is good for 3 things:

  • Good for giving yourself an ego boost (provided you have a positive net worth),
  • A way to track your wealth-building progress, and
  • A way to compile all your assets and liabilities in one table, so you don’t miss any

The first one feels hella good, but the second and third one are practical – as mentioned in my 13 Types of Financial Tools I Personally Use article, the average person living in the modern world uses more accounts and tools than what they sometimes can track.

I mean, I personally use multiple bank accounts, e-wallets, credit cards, investment platforms, etc. So doing the net worth table is a good exercise so you can list and keep track of everything in one table, while also reviewing your wealth-building progress.

I would suggest you to do and keep your own Net Worth Table, updated every year or so. As they say, what gets measured gets managed.

Net worth calculators in Malaysia

There are two net worth calculators in Malaysia that you can use to estimate your net worth:

What’s the difference between these and the table version I gave above? Mine are taken straight from my CFP Module 4 textbook and classes, with more emphasis on Liquid and Illiquid Assets.

As a final note, know that it is very common to have negative net worth if one has a lot of liabilities. So don’t be too impressed with people flexing their property or cars or whatever. If they took on debt to finance those items, their net worth might actually be lower than yours.

Alright, I’ll end here. Have fun calculating and tracking your Net Worth from here on. Any questions, can ask in the comments section 🙂

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  1. Thanks for sharing the template! Should a property that still has a mortgage be considered as an asset? If yes, how to estimate the “asset value”?

    1. Hi Eivonne,
      Yes, property with mortgage is an asset. The most ‘accurate’ estimate is from a professional appraisal, but you can just guesstimate and use listing price of similar properties in your area.

  2. “…don’t be too impressed with people flexing their property or cars or whatever. If they took on debt to finance those items, their net worth might actually be lower than yours.” Indeed! 😀

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