Doing a calculation of your net worth can serve as a checkup on your financial health, so that you can make any necessary changes.

Don't worry if you've got math anxiety! Really, the formula is pretty straightforward, and you'll get the most accurate results by figuring it out yourself.

How to find your net worth

Here's how to find out what you're worth in five simple steps.

1. Get an understanding of net worth

Mostly, your net worth is simple subtraction: your assets minus your liabilities.

Assets are all of your stuff that has value, such as savings, investments, your home and vehicles. If you're Nicki Minaj, it's probably your jewelry, too.

Liabilities are your debts, including mortgages, credit card balances and loans of any kind.

To determine your net worth, you'll need to start by coming up with lists of your assets and liabilities.

2. Cover your assets

To take a little inventory of your assets, think hard and make sure you include everything in your portfolio that has value. Don't forget about retirement savings acounts (like Roth IRAs or 401(k)s) and investments.

You can include physical items like your car, although you may to leave off other things unless they have substantial value.

For example, your $5,000 comic book collection would be worth adding to the roster of assets!

3. List your liabilities

After sorting out all of your assets, it's time to move on to liabilities.

Start writing down everything you owe money on, from credit card balances to loans.

Don't include routine monthly expenses, but do factor in any debt that is currently outstanding.

If you have a lot of different debt sources, consider taking out a debt consolidation loan to simplify your payments — and save big on interest.

4. Do the math

Now that you've taken stock of your assets and liabilities, add up each category. Then, subtract the total liabilities from the total assets.

This will leave you with your current net worth. It's that simple.

Here's an example: Tom has savings of $25,000, investments of $50,000 and a vehicle worth $10,000. That means he has $85,000 in assets.

He also has a credit card balance of $5,000 and a student loan of $20,000 — liabilities totaling $25,000.

So, Tom's net worth is $85,000 (assets) minus $25,000 (liabilities), which equals $60,000. So, he has net worth of $60,000.

5. Think about how to increase your net worth

Once you determine your net worth, you may wonder how you can improve it and your overall financial health. It's all a matter of decreasing your liabilities and increasing your assets.

Start thinking about how to get rid of obligations, such as by consolidating or paying debts. Bolster your assets by investing in real estate, stocks and so on.

Maybe one day your net worth will be up there with Minaj — or Bezos!

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Doug Whiteman

Doug Whiteman

Former Editor-in-Chief

Doug Whiteman was formerly the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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