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## Net Worth Calculator in Excel

**Why should you calculate your net worth?**

An individual’s net worth is defined as the difference between the assets they own and the liabilities they owe. Thus, it lets you know if he is building on assets and if his financial health is in good shape. It also tells you how much liquidity or cash you have. Lastly, it indicates whether you are controlling the interest rate on your assets and liabilities.

That is your **active**?

Assets can include land and houses, cash, stocks, vehicles, mutual funds, provident funds, art, gold, jewelry, electronics, or other consumer durables. You must take depreciation into account when calculating the market value of your electronics, automobiles, or other consumer durables.

The **passive** It will include any outstanding balances on mortgages, automobiles, and other consumer durables. It will also include outstanding credit cards and other loans you may have taken from friends and family. The difference between the assets and liabilities gives you the net worth. Does it grow every year? A growth in your net worth indicates that you are financially sound. Therefore, net worth is a useful tool to determine whether or not you are progressing financially.

You should also make sure you have enough cash to cover sudden expenses like an emergency and expensive hospitalization. The general rule of thumb for asset management is that about 25% of your income should be used to build assets and about 20% should be liquid assets.

Another important aspect that a net worth calculation provides is the interest rate mismatch on your assets and liabilities. If you’re paying a higher interest rate on your liabilities, then you’re better off paying off the debts by breaking down your assets.

You should check your net worth each year and compare it to last year’s performance. That way, you have control over managing your net worth. Details of your assets and corresponding values can be entered into an Excel spreadsheet and the value of total assets can be calculated using a ‘sum’ formula. Similarly, the descriptions and values of the liabilities can be entered in parallel columns and the total of the liabilities can be recalculated using the ‘sum’ formula. Then using the formula ‘=total_assets-total_libilites’ you can easily find your net worth. With the formula ‘=today()’ you can display the date of your net worth calculation. At the top of the worksheet, you can merge and wrap some cells to give your worksheet a title called ‘NET WORTH CALCULATOR’. Of course, the worksheet tab can also be renamed to ‘networth’.

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