How to figure out your real net worth

Whenever you read a story about Amazon founder Jeff Bezos, there’s always a quick mention of just how powerful and wealthy the boss of the e-commerce giant is: his net worth.

Bezos, the world’s richest person, has a net worth of $177 billion. He sits alone at the top of the world’s wealthiest with Tesla CEO and co-founder Elon Musk in second at $151 billion.

While reaching those monetary numbers are literally one in a billion, there’s some value in knowing your own net worth — if you know how to do it.

What is net worth?

You probably learned about net worth in high school but don’t remember. Don’t worry, we’re here to help.

Net worth is simply assists minus liabilities, or really — what you own minus what you don’t, or rather, what is owed.

Okay, but what are assets and liabilities?

It’s a good question.

Assets are anything in possession. Checking accounts, savings accounts, retirement savings, a home, cars, and more can be considered assets. Art, a unique baseball card collection; you own them, therefore they are an asset.

Liabilities is anything owed. Student loan debt, personal loans, credit card debt are all liabilities. Mortgages and auto loans, too.

Does net worth matter?

It sure does. According to Investopedia, knowing your net worth is important for a number of reasons.

Reviewing your net worth can help you determine where you are currently, and most of all, help shape where you want to be. It can be the kick-in-the-butt to readjust spending habits (stop eating so much takeout food) and take on more important tasks like paying down an old credit card.

Learning how to save and invest can also help put you in the direction you want to be in the future.

So, what’s my net worth?

There are a few tools that people can use to calculate their net worth. For starters, these only give people a snap shot but it’s possible to go deeper to understand your true net worth.

The basic formula is: Assets – Liabilities = Net Worth. Seems easy enough but not everyone keeps their finances organized on a spreadsheet. For others, there are free tools online that can help tell you your net worth.

• Kiplinger has a net worth calculator that will let you document many different assets and liabilities.
• Nerd Wallet provides a simpler calculator but can give you an idea of what ballpark your net worth is compared to others.

Who are the wealthiest people in the world?

These are the people with the largest net worth in the world, according to Forbes.

1. Jeff Bezos, Amazon
Net worth: $186 billion

2. Bernard Arnault & family, LVMH
Net worth: $182 billion

3. Elon Musk, Tesla & Space X
Net worth: $158 billion

4. Bill Gates, Microsoft
Net worth: $129 billion

5. Warren Buffett, Berkshire Hathaway
Net worth: $110 billion

6. Mark Zuckerberg, Facebook
Net worth: $110 billion

7. Larry Ellison, Software
Net worth: $104. billion

8. Larry Page, Google
Net worth: $100 billion

9. Sergey Brin, Google
Net worth: $97 billion

10. Amancio Ortega, Zara
Net worth: $86 billion