Whats your net worth

What’s your Net Worth?

What’s your net worth? Knowing your net worth can be both exciting and scary. Exciting if you’re doing well and your finances are looking good, but scary if not. Either way though it’s good to know what your current situation is as it’s impossible to improve what you don’t measure. If you’re wondering where that great saying comes from then take a listen to Tebogo talking about why he decided to fix his finances.

What is your Net Worth?

Before we delve into calculating your net worth, what is it? This is really simple to understand! It’s all your assets (things that you own which have value) along with all your investments, bank accounts & cash. And then you subtract all your debts.

Your net worth is your overall financial status – how well (or not so well) are you really doing once you take what you have less what you owe.

Imagine fictional character Nandi who own’s a fancy flat in Sandton, drives a nice car and forever posts amazing pics on Instagram. It could be that it’s all bought on debt and that her net worth is negative. Perhaps – R1 million. She has nice things that are worth a lot of money, but she has more debt!

Then compare her to another character, Ari. Ari lives with his parents, has some investments and drives a fully paid for skedonk (a really old car that is obviously not so great). After calculating his net worth you may find that he has a positive R250,000.

So Nandi may be living the high life and be the envy of her friends when in reality she is living off tons of debt. It’s fine while you’re earning a decent salary, but what if the job situation changes? In our examples Ari is in a far better financial position and he is miles ahead of Nandi!

Outward appearances can very easily hide the true state of finances; even from ourselves as we’re often too scared to really look. 

Start with your Assets

Take a piece of paper (or a spreadsheet) and note down everything that you own that has value. Generally speaking you would include the following items listed. Write down how much it is worth now if you sold it (not what you paid for it). Also don’t worry if it is not yet paid off, right now we’re interested in how much it is currently worth.

  • Your house and any investment properties
  • Cars / Motorbikes / Scooters or bicycles
  • Big furniture
  • Jewelry
  • Gold / precious metals
  • Investments (RA’s, pension/provident funds, TFSA’s, shares, Unit Trusts, etc)
  • Cash in the bank
  • Livestock (I invested in a cow)
  • Designer shoes or handbags that have resale value
  • Collectable / antiques that have resale value

Electronics and clothing are generally not worth adding to the calculation. These items depreciate far too quickly. You may buy a laptop for R10,000 but you’ll struggle to sell it for R5,000 – no-one wants a second-hand laptop. Same for cellphones, cameras and clothing.

If you’re feeling stuck making up this list, go through each room of your house and see what you have. And then go through all your investment accounts and log in to see the current values.

Liabilities (Debt)

Next up, note down all your debts. It’s important to note down absolutely every debt that you have, even if it’s just a few hundred rand. Think of the following:

  • Home loan
  • Car finance
  • Personal loans
  • Credit cards
  • Store accounts
  • Family loans
  • Etc

It’s important to know how much you own on each debt and you can also start looking at unwinding the debt spiral that is so easy to get trapped into.

How to calculate your net worth

Once you know your assets and liabilities you can simply do the following:

Total value of Assets – Total value of Liabilities = Net Worth

Voila, it’s that simple!

This figure is good to know as it helps you understand your overall financial situation. Sometimes you may be feeling stressed or overwhelmed about some aspect of your finances but when looking at the bigger picture you may see that you’re actually in a good overall financial health. Or perhaps not but that can be a motivating factor.

Track your Net Worth using my free personal finance spreadsheet

My personal finance spreadsheet

Is net worth the same as cash flow?

No! They are very different!

You can have a great Net Worth but no actually cash on hand. What I mean is that you may have a R2 million house that is paid-off, but you have no money in your bank account. No cash flow.

It’s really important to understand both your Net Worth and your Cash Flow.

Here’s a 2-part series on what is cash flow.


  1. Btw I thoroughly enjoy reading your blog. Fantastic content!

    I have recently created a new Investment Blog (theinvestorworld.com) and I am trying to build up my followers.

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