Net worth is the honest scoreboard: cash, investments, property and other assets, minus mortgages, loans and card balances.
Income is not wealth — a high salary with matching spending builds nothing. Tracking net worth quarterly shows whether your financial decisions actually compound.
Count realistic resale values, not purchase prices, and remember pension assets often dwarf what people expect.
The figure is a snapshot and the trend is the signal. A single quarter moves with markets and says very little; four quarters pointing the same way says whether income is actually turning into assets. Measuring on the same date each quarter matters more than measuring precisely, because consistency is what makes the series comparable with itself.
Two entries are routinely mis-stated. A car belongs at what it would sell for today, not what it cost — it depreciates, and carrying it at purchase price flatters the total for years. And a mortgage belongs on the debt side at its outstanding balance while the property sits on the asset side at market value; collapsing the two into one equity line hides both numbers.
It is also worth separating liquid from illiquid before drawing conclusions. A net worth that is 90% home equity and pension is a real number and not one you can spend, which is the distinction an emergency fund exists to cover and the reason two people with identical totals can be in very different positions.
Frequently asked questions
What counts toward my net worth?
Everything you own at realistic resale value — cash, investments, property, pensions — minus everything you owe: mortgage, loans, card balances.
Should I include my home and pension?
Yes, both: your home at market value (minus the mortgage on the debt side) and private pension pots at current value. A state pension is income, not an asset — leave it out.
What is a good net worth for my age?
Benchmarks vary too much by country and income to be useful. The trend is what matters: tracked quarterly, a rising net worth is proof your decisions compound.