What actually counts as net worth
Net worth is assets minus debts — but the details decide whether your number is honest. Here's what to include, what to leave out, and how to compare it to your age group.
Net worth is the simplest number in personal finance and the easiest to fudge. The formula is just everything you own minus everything you owe — but two people can compute it very differently.
What to include
- Liquid assets: cash, chequing/savings, non-registered investments.
- Registered accounts: RRSP, TFSA, RESP, pensions (use the current value).
- Real estate: your home and any rentals, at a realistic market value.
- Vehicles and valuables: only if you'd actually sell them — be conservative.
Then subtract all debts: mortgage, line of credit, car loan, student loans, credit-card balances.
What trips people up
Use today's honest market value, not what you paid and not what you hope to get. A number you've talked yourself into isn't a benchmark — it's a wish.
Two common distortions:
- Counting a pension you can't value. Defined-benefit pensions are real wealth but hard to price; note them separately rather than guessing.
- Ignoring the mortgage. Home equity (value minus what you owe) is the part that's yours — not the full sale price.
Comparing to your peers
A raw net-worth figure means little without context. Statistics Canada publishes net worth by age band, which is the fair comparison: a 30-year-old and a 55-year-old are on very different parts of the curve.
See where your number lands with net worth by age — and if the gap looks large, remember that median wealth climbs steeply with age and home equity. The point isn't to win; it's to know.