Net Worth Calculator

What Is Net Worth and Why It Matters

Net worth is the single most important number in personal finance. It represents the difference between everything you own (your assets) and everything you owe (your liabilities). Unlike income, which is a flow of money, net worth is a snapshot of your total financial health at a point in time.

Tracking your net worth over time gives you a clear picture of whether you are building wealth or falling behind. A rising net worth means your financial decisions are working. A declining net worth signals that spending, debt, or asset depreciation need attention.

Average Canadian Household Net Worth

According to Statistics Canada's Survey of Financial Security, the median household net worth in Canada is approximately $400,000, though this varies significantly by age and region. Real estate is typically the largest component, accounting for roughly half of total household assets. Here are approximate benchmarks by age group:

• Under 35: Median net worth around $48,000. Building savings, paying student debt, and starting to invest are priorities.
• 35 to 44: Median net worth around $234,000. Home ownership and growing investments are common at this stage.
• 45 to 54: Median net worth around $521,000. Peak earning years with higher savings rates and reduced debt.
• 55 to 64: Median net worth around $690,000. Pre-retirement accumulation phase with mortgages often paid off.
• 65 and older: Median net worth around $543,000. Drawdown phase begins as retirement income replaces employment income.

How to Improve Your Net Worth

There are only two ways to increase your net worth: grow your assets or reduce your liabilities. Here are practical strategies:

• Pay down high-interest debt first. Credit card interest rates of 19-22% erode wealth faster than most investments can build it.
• Maximize registered accounts. RRSP and TFSA contribution room provides tax-sheltered growth that compounds over decades.
• Build an emergency fund. Three to six months of expenses prevents debt accumulation during unexpected events.
• Invest consistently. Regular contributions to a diversified portfolio harness the power of compound growth.
• Avoid depreciating assets on credit. Financing vehicles and consumer goods simultaneously reduces assets and increases liabilities.
• Increase your income. Career development, side businesses, and skill building create more capital to allocate toward assets.

Assets vs Liquid Assets

Not all assets are equally useful. Liquid assets (cash, savings accounts, publicly traded investments) can be converted to cash quickly without significant loss of value. Illiquid assets (real estate, business equity, pensions) may take weeks or months to sell and may incur costs or penalties.

While your home may be your largest asset, you cannot easily access that value for everyday expenses. A healthy financial position includes both a strong overall net worth and sufficient liquid assets to cover near-term needs.

Common Mistakes in Calculating Net Worth

• Overvaluing your home. Use a realistic current market value, not what you hope it might sell for. Check recent comparable sales in your area.
• Forgetting vehicle depreciation. Cars lose value rapidly. Use current resale value, not what you paid.
• Ignoring small debts. Buy-now-pay-later balances, outstanding utility bills, and amounts owed to friends all count as liabilities.
• Double-counting joint assets. If you share assets with a spouse, decide whether to calculate individual or household net worth and be consistent.
• Including personal possessions at purchase price. Furniture, electronics, and clothing have minimal resale value and are generally excluded.

When to Recalculate Your Net Worth

Financial advisors recommend calculating your net worth at least quarterly. Monthly tracking is ideal if you are actively paying down debt or building investments. Key times to update include:

• At the start of each quarter (January, April, July, October)
• After major purchases or sales (home, vehicle)
• When you receive annual investment statements
• After significant life changes (marriage, inheritance, job change)
• During annual tax preparation when financial records are already gathered