Choose a clear definition
For this site, liquid net worth means cash, savings and adjusted taxable marketable investments, less all liabilities. It excludes retirement accounts, property, vehicles and private businesses. Other definitions exist, so compare like with like.
A worked example
Take $5,000 in checking, $20,000 in savings and $40,000 in taxable investments. With a user-selected 10% investment haircut, the adjusted investments contribute $36,000. Total adjusted liquid assets are $61,000. Subtracting $25,000 of liabilities leaves $36,000 of liquid net worth.
The haircut is a scenario input, not a calculation of tax due or a guarantee of the price you could obtain. Market prices and sale costs can change. Keep an asset’s current value separate from assumptions about selling it.
Why subtract all liabilities?
This conservative method takes account of outstanding obligations even when the corresponding asset is excluded. For example, it subtracts a mortgage while excluding the home. The result can therefore be negative for a household with substantial housing wealth. That is a feature of the chosen definition, not necessarily an arithmetic mistake.
Do not confuse it with an emergency fund
A liquid net worth total is not a spending allowance. Some included investments can fluctuate, while many debts are paid over time. A plan for immediate expenses should look separately at cash available, upcoming bills and the time needed to access funds.
Use the personal net worth calculator for the full balance sheet and the liquid calculator for this narrower view. Keeping both definitions visible makes it easier to explain a change in one total without assuming the other changed by the same amount.
Put the idea into numbers.
Understand the part of your balance sheet you can access more readily.
Try the liquid net worth calculator ↗Educational information. Illustrations are not personalized advice or promises of future results.