How to Calculate Your Net Worth — and Why It's the Most Useful Financial Number

Salary, savings balance, and monthly budget are all useful financial metrics — but none of them tell you as much as your net worth. Net worth is the sum of everything you own minus everything you owe. It's the clearest single snapshot of your financial position.

The Simple Formula

Net Worth = Total Assets − Total Liabilities

If you own €350,000 in assets and owe €120,000 in debt, your net worth is €230,000.

What to Include as Assets

• Cash and deposits: current accounts, savings accounts, term deposits
• Investments: stocks, ETFs, bonds, investment funds, crypto (at current value)
• Property: market value of your home or investment properties
• Pension entitlements: present value of future CNAP pension, 2nd pillar occupational pension, 3rd pillar savings
• Business interests: value of any business ownership stakes
• Vehicles: current market value (depreciated)
• Other valuables: art, jewellery, collectibles (at realistic resale value)

For Luxembourg residents, pension entitlements are often underestimated. Years of CNAP contributions translate into a significant income stream — a pension of €2,000/month at 65 is economically equivalent to having roughly €400,000 in a 4%-yielding annuity.

What to Include as Liabilities

• Mortgage outstanding balance
• Personal loans
• Car loans
• Credit card balances
• Student loans
• Any other debt

What Does Your Net Worth Tell You?

A positive and growing net worth means you're building financial security. Common benchmarks (not rules):

• Age 30: aim for 1× your annual salary
• Age 40: aim for 3× your annual salary
• Age 50: aim for 5× your annual salary

In Luxembourg, where salaries are high but property costs are enormous, these benchmarks are harder to hit — but the principle of consistent growth matters more than the absolute figure.

Track It, Don't Just Calculate It Once

The real value of net worth tracking is momentum. Checking it quarterly shows whether your trajectory is positive. Most people find that simply tracking net worth improves financial behaviour — it creates accountability.

Calculate Yours Right Now

[👉 Use the Net Worth Calculator](/calculators/net-worth)

Enter your assets and liabilities to get an instant net worth figure — plus suggestions on how to improve your financial position.