Net Worth Calculator in Excel

Why should you calculate your net worth?
An individual’s net worth is defined as the difference between the assets he owns and the liabilities he owes. Thus, it lets you know if he is building on assets and if his financial health is in good shape. It also tells you how much liquidity or cash you have. Finally, it indicates if you are controlling the interest rate of your assets and liabilities.

That is your assets?
Assets can include land and houses, cash, stocks, vehicles, mutual funds, provident funds, artwork, gold, jewelry, electronics, or other consumer durables. You must account for depreciation when calculating the market value of your electronics, automobiles, or other consumer durables.

Tea passive It will include any outstanding balance on mortgage loans, cars, and other consumer durables. It will also include outstanding credit cards and other loans you might have taken from friends and family. The difference between assets and liabilities gives you net worth. Does it grow every year? A growth in your net worth indicates that you are financially sound. Therefore, net worth is a useful tool in determining whether or not you are making financial progress.

You also need to make sure you have enough cash to cover sudden expenses like an emergency and expensive hospitalization. The general rule of thumb for asset management is that around 25% of your income should be used to build assets and approximately 20% should be liquid assets.

Another important aspect that a net worth calculation provides is the interest rate mismatch of your assets and liabilities. If you’re paying a higher interest rate on your liabilities, then you’re better off paying down the debts by breaking up your assets.

You should check your net worth each year and compare it to last year’s performance. That way, you have control over the management of your net worth. Your asset details and corresponding values ​​can be entered into an Excel spreadsheet and the total asset value can be calculated using a ‘sum’ formula. Similarly, the descriptions and values ​​of the liabilities can be entered in parallel columns and the total of the liabilities can be calculated again using the ‘sum’ formula. Then using the formula ‘=total_assets-total_liability’ you can easily find your net worth. With the formula ‘=today()’ you can display the date of your net worth calculation. At the top of the worksheet, you can merge and wrap some cells to give your worksheet a title called ‘NET WORTH CALCULATOR’. Of course, the worksheet tab can also be renamed to ‘networth’.