Total assets minus liabilities to track net worth.
Net worth
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Total assets
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Total liabilities
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Debt ratio
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Worked example
Take a household with R80,000 in cash, R200,000 in investments, a R450,000 retirement fund, a home worth R1,800,000 and vehicles of R220,000. That is R2,750,000 of assets. Against it sits a bond of R1,200,000, other loans of R90,000 and R25,000 on credit cards, which is R1,315,000 of liabilities. Net worth is assets less liabilities, so R2,750,000 minus R1,315,000 leaves R1,435,000. The debt ratio is liabilities divided by assets, R1,315,000 over R2,750,000, which is about 47.8 percent. A ratio below 50 percent means you own more of your assets outright than the bank does, and tracking the same figures every few months shows whether the gap is widening in your favour.
Step
Amount
Total assets
R2,750,000
Less total liabilities
minus R1,315,000
Debt ratio (liabilities / assets)
47.8%
Net worth
R1,435,000
How it is calculated
Net worth is a single subtraction: everything you own at its current market value, less everything you owe. The calculator totals five asset categories and three liability categories, so it captures the items that dominate most South African balance sheets, namely a home, a bond, retirement savings and short-term debt. Assets are taken at what you could realistically sell them for today, not what you paid, which matters for vehicles that depreciate and property that may have grown. The debt ratio puts liabilities over assets so you can see leverage at a glance. The figure is a snapshot, not a forecast, so its value comes from repeating it on the same basis over time. A rising net worth driven by paying down the bond is healthier than one driven only by a property revaluation you cannot access without selling.
Frequently asked questions
How do I calculate my net worth?
Add up everything you own at its current value, including cash, investments, retirement funds, property, and vehicles, then subtract everything you owe such as your bond, loans, and credit card balances. The result is your net worth. Tracking it every few months shows whether your finances are moving in the right direction.
Should I include my retirement annuity in my net worth?
Yes. Your retirement annuity, pension, and provident fund balances are real assets that belong in your net worth calculation. They are not immediately accessible before retirement, but they represent genuine wealth you are building. Include the current fund value as reported on your latest statement.
What is a healthy debt ratio for a South African household?
The debt ratio is total liabilities divided by total assets. A ratio below 50 percent means you own more of your assets than your creditors do, which is a reasonable benchmark for a household with a bond. The ratio typically starts high when a home loan is new and falls over time as the bond is paid down and the property value grows.
Should I use the market value or purchase price for property and vehicles?
Use the current market value, what you could realistically sell the asset for today. Property may have grown above what you paid, which lifts your net worth. Vehicles depreciate, often sharply, so using the purchase price overstates your assets. A rough guide for a vehicle is to check a resale listing site for comparable models at a similar age and mileage.