How is net worth different from a bank balance?
Net worth is the total value of the assets you own, minus the debts you still owe. Your bank balance is just one asset. If you also hold stocks, property or loans, looking at a bank account alone will not show your overall financial position.
Net worth = Total assets − Total debts
This number can be positive or negative. A negative figure means your recorded debts exceed your recorded assets. Net worth is not your income, your credit score or the cash available to spend each month.
What should count as an asset?
Start with the assets you actually own and want to include. Use valuations from the same date, or dates as close together as possible.
- Bank savings and cash: use the current balance.
- Stocks, funds and crypto: use the current or most recent available estimated market value, rather than the purchase price.
- Property: use a reasonable estimated market value and record the valuation date.
- Other assets: decide what to include for your record-keeping needs, without counting an asset twice.
For example, if an investment account's total already includes its stocks and cash, do not add those stocks again. Estimated values may differ from what you would receive after a sale. Use a consistent approach when comparing dates.
What should count as a debt?
Record the outstanding amount, rather than the monthly payment.
- Credit cards: record the unpaid balance, not just the minimum payment.
- Personal loans and instalments: record the amount still owed. Do not add it twice if it is already included in a credit card balance.
- Mortgages: record the remaining principal, rather than the original loan or the monthly payment.
If a repayment has left your bank account but the loan balance has not been updated, the two records will reflect different dates. Check related debts when you update your assets.
A worked example
All amounts below are examples, not real user data. Suppose your savings and investments total HK$180,000, and you owe HK$60,000 on credit cards and loans:
| Item | Amount |
|---|---|
| Total assets | HK$180,000 |
| Less total debts | HK$60,000 |
| Net worth | HK$120,000 |
If you own the home you live in, include its estimated value as an asset and the outstanding mortgage as a debt. A property valued at HK$5,000,000 with HK$3,000,000 of mortgage principal remaining has HK$2,000,000 of equity. This is also an illustrative calculation.
Property equity is not immediately available cash. You may want to look at both overall net worth and cash balances, rather than treating them as the same thing.
How often should you update your records?
Choose a regular date, such as once a month after receiving bank and loan statements. Consistent dates, valuations and currencies are more useful than trying to make every figure exact each day.
Check account balances, investment values, credit card debts and outstanding loan principal. Convert foreign-currency accounts to one currency before adding them together. For a detailed guide, read How to track net worth across multiple currencies.
How do you record this in WorthBook?
Create separate asset and debt accounts in WorthBook, then enter their balances and currencies to see your net worth and charts. Update accounts at your own pace; you do not have to record every daily transaction.
WorthBook does not connect to banks or automatically update investment prices or exchange rates. You update balances, valuations and rates yourself, and data stays on your device. Before changing devices, export a backup for each book. See Privacy and support for more information.