Your net worth is the dollar amount of all of your assets minus your debts. If your assets exceed your liabilities, you have a positive net worth. 𒆙Conversely, if your liabilities are greater than your assets, you have a negative net worth.

Tangible net worth represents your actual net worth without any estimations or assumptions, removing the value of intangible assets such as copyrights, patents, or other 澳洲幸运5开奖号码历史查询:intellectual property (IP).

What Is Tangible Net Worth?

Your 澳洲幸运5开奖号码历史查询:tangible net worth is similar to your net worth: to calculate it, you subtract your liabilities from your assets. With tangible net worth, though, you go one step further: you also subtract the value of any 澳洲幸运5开奖号码历史查询:intangible assets, including goodwill, copyrights, patents, and other intellectual property (IP).

Tangible net worth is important for corporations because it helps determine what they are actually worth, using physical assets. Businesses calculate their tangible net worth to determine their 澳洲幸运5开奖号码历史查询:liquidation value if they were to cease operations or sell.

Tangible net worth is also important for individuals who apply for personal or small business loans with lenders who require a "real" net worth figure before making a decision. Your tangible net worth provides a more accurate view of your finances and how much the lender could recoup if it had to 澳洲幸运5开奖号码历史查询:liquidate your assets if you default on the loan.

Tangible vs. Intangible Assets

Your tangible assets are everything you can touch.

Though investments are intangible assets, they're often included in the tangible category because they can be quickly converted to cash. Other assets may include 澳洲幸运5开奖号码历史查询:real property such as land and homes and 澳洲幸运5开奖号码历史查询:personal property such as cars, furniture, and jewelry.

Intangible assets are assets you cannot touch. Goodwill, copyrights, patents, trademarks, and intellectual property are all considered intangible assets. If you want to 澳洲幸运5开奖号码历史查询:sell your small business, you may be able to argue that these intangible assets add value to the business. However, when it considers your loan application, a bank may only include assets that are tangible because they are more easily liquidated.

Tangible Net Worth Formula

Cal🔜culating your net worth is a multi-step process.

First, gather all of your 澳洲幸运5开奖号码历史查询:financial statements in one place with documents like bank and 澳洲幸运5开奖号码历史查询:credit card statements.

Then, create a separate file for your net worth. Keep it in a filing cabinet or on your comp🍎uter where you can keep all of your statements for comparison.

In the file, calculate your tangible net worth. The formula for calculating your tangible net worth is:

$\begin{aligned}&\text{Tangible Net Worth} = \text{TA} - \text{Liabilities} - \text{IA} \\&\textbf{where:} \\&\text{TA} = \text{Total assets} \\&\text{IA} = \text{Intangible assets} \\\end{aligned}$​Tangible Net Worth=TA−Liabilities−IAwhere:TA=Total assetsIA=Intangible assets​

Calculating Assets

To calculate your tangible net worth, you will need to determine the value of your assets. Start with your most liquid assets—th꧂at is, the amount you have in cash and cash equivalents, including:

• 澳洲幸运5开奖号码历史查询:Certificates of deposit (CDs)
• Checking and savings accounts
• 澳洲幸运5开奖号码历史查询:Money market accounts
• Physical cash
• 澳洲幸运5开奖号码历史查询:Treasury bills

Next, d♍etermine and include the current market value of investments such as:

• 澳洲幸运5开奖号码历史查询:Annuities
• Bonds
• 澳洲幸运5开奖号码历史查询:Life insurance cash value
• Mutual funds
• Pensions
• 澳洲幸运5开奖号码历史查询:Retirement plans, such as an 澳洲幸运5开奖号码历史查询:individual retirement account (IRA), 401(k), or 403(b)
• Stocks
• Other investments

Next, obtain the values for real and personal property. Rಌemember, real property includes land and anything that’s permanently attached to it, such as a house. Personal property is almost everything else, including:

• Collectibles like antiques, art, and coins
• Household furnishings
• Electronics
• Jewelry
• Vehicles

Calculating Liabilities

Next, calculate your li෴abilities. Your liabilities represent all of your outsꦐtanding debts. Start with the amount you owe in secured debts, including:

• Vehicle loan(s)
• 澳洲幸运5开奖号码历史查询:Home equity loan
• Margin loans
• Mortgage
• Rental real estate mortgage
• Second mortgage
• Vacation or second home mortgage

Then move on to include the amount you owe in 🦋unsecured debts, including:

• Credit card debt
• Medical bills 
• 澳洲幸运5开奖号码历史查询:Personal loans
• 澳洲幸运5开奖号码历史查询:Student loans
• Other debt and outstanding bills

Putting It All Together

O🔯nce you determine the value of your assets and the valu🍃e of your liabilities, you can use this formula to determine your tangible net worth:

Tangible Net Worth = Total Assets - Total Liabilities - Intangible Assets.

The Bottom Line

Your tangible net worth is equal to the value of all of your assets, minus any liabilities and intangible assets. Intangible assetsౠ include copyrights, go🅺odwill, intellectual property, patents, and trademarks.

While a standard net worth calculation of assets minus liabilities suffices for most individuals, those who hold intangible assets may be required to calculate their tangible net worth to satisfy a lender's requirements for a personal or small business loan.