Your Net Worth Is the Score That Actually Matters
What net worth actually means, how to calculate yours, what counts as an asset vs a liability, and why it beats income as a measure of financial progress.
By Timothy Hirou GaschereauPublished 10 min read
Try it yourself
Income is a tap. Net worth is the tank. Your salary tells you how fast water flows in, your net worth tells you how much is actually sitting in the tank after everything that's flowed back out. Once you've calculated yours, our free Net Worth Tracker can log it and track the trend for you.
Quick answer
Net worth is everything you own minus everything you owe. It's the single best measure of where you actually stand financially, because income tells you what comes in, but net worth tells you what you've kept. To calculate yours, add up your assets (savings, super, property, investments), subtract your liabilities (mortgage, loans, credit cards, HECS), and that's your number.
In this guide
- →The simple formula, and why a negative number isn't a life sentence
- →What actually counts as an asset vs a liability for an everyday Australian
- →A full worked example from real numbers
- →Why net worth beats income as a measure of financial progress
- →How Australians actually compare, and why the averages are misleading
- →The common mistakes people make calculating their own number
🧮 What net worth actually means
🎯 The essential: Two people can earn identical salaries and have completely different financial positions. Net worth is the number that shows the difference.
One person has $200,000 in savings, no debt, and a growing share portfolio. The other has a nice car, a wardrobe full of stuff, and $40,000 in personal loans. Same income, wildly different net worths. Net worth is a snapshot of your real financial position at a point in time, not a measure of how much you earn or how busy your bank account looks.
➗ The formula
One of the simplest formulas in personal finance:
Net Worth = Total Assets − Total Liabilities
Add up everything you own that has value, subtract everything you owe. It can be positive or negative, both are useful information. A negative net worth isn't a life sentence, it's a starting point.
💰 What counts as an asset
An asset is anything you own that has monetary value. For most Australians in their 20s to 40s:
- Cash and savings: everyday account, savings account, term deposits, offset account balance. Use the actual balance.
- Superannuation: yes, it's an asset. Important caveat: for most Australians born after 1 July 1964, the preservation age is around 60, so it's yours, but it's locked. See how much super you should have for real benchmarks by age. More on why this matters below.
- Property: if you own a home or investment property, use the current market value, not what you paid, not what you hope it's worth.
- Shares, ETFs and managed funds: the current market value of your investment portfolio.
- Your car: use the realistic resale value today, not the purchase price. Cars depreciate fast.
- Other valuables: jewellery, art, or collectibles with genuine resale value. Don't inflate these.
📉 What counts as a liability
A liability is any debt or financial obligation you owe. Common ones:
- Mortgage balance: the remaining principal, not the original loan amount.
- Investment property loans: same deal, the outstanding balance.
- Personal loans and car loans: the current outstanding balance.
- Credit card balances: what you currently owe, not your credit limit.
- HECS-HELP debt: this one catches people out. It's a real debt, indexed to CPI each year, that reduces your take-home pay through compulsory repayments once you earn above the threshold. Income-contingent doesn't mean it's not a debt. Find your balance through myGov.
- Buy Now Pay Later balances: Afterpay, Zip, whatever you're using. If you owe money on it, it's a liability, even though it doesn't feel like "real" debt. Our BNPL guide covers why that matters more than people assume.
📊 Worked example: Priya, age 32
Priya is a project manager in Melbourne earning $95,000 a year. She owns a one-bedroom apartment and has been building a small share portfolio for two years.
| Assets | Value |
|---|---|
| Savings account | $14,200 |
| Offset account | $22,800 |
| Superannuation | $51,300 |
| Apartment (market value) | $610,000 |
| Share portfolio (ETFs) | $18,400 |
| Car (resale value) | $16,500 |
| Total assets | $733,200 |
| Liabilities | Balance |
|---|---|
| Mortgage (remaining principal) | $412,000 |
| HECS-HELP debt | $19,400 |
| Credit card | $1,100 |
| Total liabilities | $432,500 |
Priya's net worth: $733,200 − $432,500 = $300,700. A solid position for a 32-year-old, with her property equity doing most of the heavy lifting. One thing worth noting: $51,300 of that is locked in super until around age 60. Her accessible net worth, what she could actually use today, is closer to $249,400. Both numbers are useful to know.
🆚 Why net worth beats income as a progress measure
Say two friends, Tom and Jess, both earn $110,000 a year, same industry, same five years in the workforce. Tom upgrades his car regularly, moves into a nicer apartment each lease renewal, and travels twice a year. He has $8,000 in savings and $34,000 in personal loans.
Jess drives a seven-year-old car, lives in a modest rental, and puts $1,500 a month into an ETF portfolio. She has $97,000 invested and no consumer debt.
Same income. Five years later, Jess's net worth is roughly $120,000 higher than Tom's, and the gap keeps widening as her investments compound. Income is a flow, net worth is the stock that flow builds, or doesn't, depending on what happens in between. The gap between what you earn and what you spend is the only thing that actually moves your net worth.
📈 Average net worth in Australia: how do you compare?
A quick warning first: averages in wealth data are almost always misleading. The ABS's most recent detailed Survey of Income and Housing (2019-20, published May 2022) put mean household net worth at roughly $1.04 million, and median household net worth at $579,200.
The median is the more useful number, the midpoint, where half of Australian households sit above and half below. The mean is dragged upward by very wealthy households at the top, which is exactly why it's easy to feel behind when you shouldn't.
The distribution is also extremely uneven: the ABS found the top 20% of households hold 62.8% of total household wealth. The bottom 20% hold less than 1%.
The honest takeaway: these benchmarks are a direction to aim, not a score to beat. Your net worth at 30 isn't supposed to look like your net worth at 55. What matters is whether yours is moving in the right direction over time.
⚠️ Common mistakes when calculating net worth
- Treating super as liquid wealth. It's real and it's yours, but for most Australians born after 1 July 1964 you can't touch it until around age 60. Know the difference between total and accessible net worth.
- Forgetting HECS-HELP. It feels invisible because it's deducted automatically, but the debt is real and can run to $30,000, $50,000 or more. Check myGov and include it.
- Overvaluing your car. Use what you'd actually get selling it today, checked against comparable listings, not what you paid or what it's insured for.
- Ignoring BNPL balances. Easy to forget because they're spread across multiple apps without a single monthly statement.
- Confusing income with wealth. A high salary doesn't automatically mean a high net worth. If you spend everything you earn, your net worth can stagnate regardless of income.
📊 Try the Net Worth Tracker
Log your assets and liabilities and watch your net worth trend over time. Takes about five minutes to set up.
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❓ Frequently asked questions
Is super included in net worth?
+
Yes. Superannuation is an asset and belongs in your net worth calculation. The important distinction is that it's locked for most Australians until around age 60 (preservation age). Include it in your total net worth, but also track your accessible net worth separately so you know what you can actually use before retirement.
What is a good net worth at 30 in Australia?
+
There's no universal benchmark. For context, the ABS Survey of Income and Housing put median household net worth at $579,200 across all ages. For Australians in their late 20s and early 30s, net worth is typically much lower, often between $50,000 and $200,000 depending on whether they own property. The more useful question is whether your net worth is growing year on year.
Does HECS-HELP count as a liability in net worth?
+
Yes. HECS-HELP is a real debt owed to the Australian Government. It's indexed to CPI each year and repaid through your tax return once you earn above the income threshold. Include your current HECS balance as a liability, you can find it through myGov.
What's the difference between net worth and income?
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Income is what you earn. Net worth is what you've accumulated. You can have a high income and a low net worth if you spend most of what you earn. Net worth is a stock, a snapshot of accumulated wealth, while income is a flow. Net worth is the better measure of long-term financial progress.
How often should I calculate my net worth?
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Quarterly is a good rhythm for most people, frequent enough to track meaningful progress without short-term market movements distorting the picture. Set a recurring reminder and compare to the same quarter last year.
What if my net worth is negative?
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It means your liabilities currently exceed your assets. This is common early in careers, especially with HECS debt, a new car loan, or a recently taken-out mortgage. It's a starting point, not a verdict, the goal is to move the number in the right direction over time.
📚 Recommended reading
The Psychology of Money
Morgan Housel
19 short stories on how people actually think and feel about money, not just the maths of it.
Mindful Money
Canna Campbell
A calmer, values-first approach to investing and financial wellbeing from a certified financial planner.
Some links above are affiliate links. If you buy through them, Snowball Invest may earn a small commission at no extra cost to you. We only recommend books we'd suggest anyway.
Sources
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Timothy Hirou Gaschereau
Founder of Snowball Invest, not a financial adviser.
I write about what I'm learning myself, because nobody ever taught us how to take control of our own money. It's a skill, not a mystery, and it's never too late to learn it. The best day to start was yesterday, the second best is today.
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