Understanding your net worth projection
What net worth measures
Net worth is total assets minus total liabilities. It is a balance-sheet measure, not income, spending capacity, or monthly cash surplus. A negative result means included liabilities exceed included asset values.
Which assets to include
Cash, investments, retirement accounts, real estate, vehicles, business interests, and personal property can be included when you can make a supportable value estimate. Avoid counting the same economic value twice.
Which liabilities to include
Include balances you remain responsible for, such as mortgages, auto and student loans, credit cards, personal loans, medical debt, and tax debt. A $0 row is treated as already paid off.
Value is not accessibility
A house, retirement account, business interest, or collectible may increase net worth while remaining difficult, costly, or restricted to convert into spendable cash. Net worth does not measure liquidity by itself.
Choosing a growth rate
Use a nominal annual assumption that reflects the asset and already includes its expected overall price change. Do not add dividends separately: the entered growth rate is the model's total change in value.
Depreciation and contributions
Negative growth reduces an asset without allowing its value to fall below $0. Contributions are tracked separately, added at month end, and begin receiving growth in the next modeled month.
Interest, payments, and growing debt
Liability interest is charged before each payment. When payment is below interest, principal paid is negative and the balance grows through negative amortization. Final payments are limited to the amount actually due.
Nominal vs today's dollars
Nominal net worth uses future dollar amounts. Today's-dollars net worth divides that result by cumulative inflation to express estimated purchasing power; inflation is not subtracted directly from asset growth.
Using scenarios responsibly
Conservative and optimistic cases adjust growth in percentage points and contributions by a percentage. They expose sensitivity to assumptions; optimistic is not a promise and conservative is not a guaranteed safe result.
Model limitations
The model holds rates, contributions, and payments constant. It does not model taxes, fees, market volatility, changing income, irregular transactions, asset sales, defaults, or real-world appraisal changes.