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. Conversely, if your liabilities are greater than your assets, you have a negative ꦯnet 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官方开奖结果体彩网:intellectual property (IP).

What Is Tangible Net Worth?

Your 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网: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官方开奖结果体彩网: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官方开奖结果体彩网: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官方开奖结果体彩网:real property such as land and homes and 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网: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

Calculating y🌳our net worth is a multi-step process.

First, gather all of your 澳洲幸运5官方开奖结果体彩网:financial statements in one place with documents like bank and 澳洲幸运5官方开奖结果体彩网:credit card statements.

Then, create a separate file for your net worth. Keep it in a filing cabinet or on youℱr computer 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 m💖ost liquid assets—that is, the amount you have in cash and cash equivalents, including:

• 澳洲幸运5官方开奖结果体彩网:Certificates of deposit (CDs)
• Checking and savings accounts
• 澳洲幸运5官方开奖结果体彩网:Money market accounts
• Physical cash
• 澳洲幸运5官方开奖结果体彩网:Treasury bills

Next, determine and include the current market value of investmen🍌ts such as:

• 澳洲幸运5官方开奖结果体彩网:Annuities
• Bonds
• 澳洲幸运5官方开奖结果体彩网:Life insurance cash value
• Mutual funds
• Pensions
• 澳洲幸运5官方开奖结果体彩网:Retirement plans, such as an 澳洲幸运5官方开奖结果体彩网🦩:individual retirement account (IRA), 401(k), or 403(b)
• Stocks
• Other investments

Next, obtain the values for real and personal property. Remember, real property includes land and anything th🍒at’s permanently attached to it, such as a house. Person🐎al property is almost everything else, including:

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

Calculating Liabilities

Next, calculate your liabilities. Your liabilities represen🏅t all of your outstanding debts. Start with the amount you owe in secured debts, including:

• Vehicle loan(s)
• 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:Personal loans
• 澳洲幸运5官方开奖结果体彩网:Student loans
• Other debt and outstanding bills

Putting It All Together

Once you determine the value of your assets and the value of your liabilities, you can use thiꦬs formula to determine your tangible net w☂orth:

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

The Bottom Line

Your tangible net w🔥orth is equal to the value of all of your assets, minus any liabilities and intangible assets. Intangible assets include copyrights, goodwill, intellect🐟ual 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.