~15 min · You'll leave with your actual number ·
Glossary
Why this is the first thing to learn
Before you can improve your financial life, you need a baseline. Net worth is that baseline. It's the single number that captures where you stand right now — and it's the number you'll track month after month to prove you're moving forward.
Most people avoid calculating it because they're afraid of what they'll find. That's exactly why it's first. A bad number is just data. You can't fix what you haven't measured.
Key insight
Net worth can be negative when you start. That's normal — especially if you have student loans or a car loan. The goal right now is to know the number, not to have a good number.
The formula
Net Worth = Total Assets − Total Liabilities
Assets (what you own)
Liabilities (what you owe)
Savings account balance
Credit card debt
Investments (stocks, mutual funds, EPF, PPF)
Student loans
Cash on hand
Car loan
Value of car (current resale)
Personal loans
Value of property you own
Home loan (mortgage)
Gold / jewelry
Any other debt
Common mistake
Don't include income. Net worth is a stock (a snapshot at a moment in time), not a flow (income/expenses). Your salary is not an asset.
Calculate yours right now
Open your bank app, investment app, and any loan statements. Fill in approximate numbers — round to the nearest thousand. The point is directional accuracy, not perfection.
Assets
0
Liabilities
0
0
What to do with your number
Your net worth number is not a verdict. It's a starting line. Here's what it tells you:
Negative net worth — your debts exceed your assets. Your first priority is stopping the bleeding: no new debt, and start a debt payoff plan. Lesson 3 covers this.
Zero to low positive — you're stable but not growing yet. Your next step is building a 3-month emergency fund. Lesson 2 covers this.
Meaningful positive — you've built a cushion. Time to start putting money to work. Investing lessons come after the foundation is solid.
Check your understanding
Q1 — You have ₹2,00,000 in savings, a car worth ₹5,00,000, and a car loan with ₹3,50,000 outstanding. What is your net worth?
Q2 — Which of the following is a liability?
Your one action this week
Record your net worth in a spreadsheet or notes app. Date it: July 2026. You'll recalculate it every month. Watching it move — even by ₹1,000 — is one of the most motivating things in personal finance.
Go deeper
Recommended reading: Chapter 1 of I Will Teach You To Be Rich by Ramit Sethi. It covers why most people avoid looking at their finances — and why the simple act of measuring everything changes behaviour. Library copy or ebook.
Ask your teacher
Anything in this lesson unclear? Surprised by your number? Not sure what category an asset belongs in? Ask me — I'm here to help you work through it. Just describe what you're unsure about.