I calculated my debt-to-asset ratio to answer “am I actually wealthy?” and learned why including BNPL is crucial. Here is what I discovered.
I sat down last week with a notebook and a serious question: debt-to-asset ratio: am I actually wealthy? I have a good job. I own a car. I have some money in the bank. But I also have a mortgage, a car loan, and a few Buy Now, Pay Later plans. I wanted to know the truth. I wanted to know if all my hard work had actually made me wealthy, or if I was just fooling myself.
So I did the math. I calculated my debt-to-asset ratio: am I actually wealthy? The answer surprised me. It was not a simple yes or no. It was a number that forced me to look at my finances differently. In this post, I will walk you through how to calculate your own ratio, what the number means, and why you absolutely must include Buy Now, Pay Later debt in the equation.
What is Debt-to-Asset Ratio?
Before I could answer debt-to-asset ratio: am I actually wealthy?, I needed to understand what the ratio actually measures. The debt-to-asset ratio is a simple formula. You take everything you owe (your total debts) and divide it by everything you own (your total assets) .
The formula looks like this:
Debt-to-Asset Ratio = Total Debts ÷ Total Assets
The result is a percentage. That percentage tells you how much of your stuff is actually paid for by you versus how much is paid for by creditors . If your ratio is 50%, it means half of everything you own is financed with debt. The other half is truly yours.
When I asked myself debt-to-asset ratio: am I actually wealthy?, I was really asking: how much of what I have do I actually own?
Why This Ratio Matters for Personal Wealth
In the business world, companies use this ratio all the time to measure financial health . But I learned that it works just as well for individuals. Financial planners recommend using this ratio to track progress over time .
A lower debt-to-asset ratio is better. It means you owe less relative to what you own. It means you are building true wealth, not just accumulating stuff with borrowed money .
When I first asked debt-to-asset ratio: am I actually wealthy?, I thought about my income. I thought about my house. But the ratio forced me to think about the relationship between what I owe and what I own. That is the real measure.
How I Calculated My Ratio
Let me walk you through exactly how I calculated my own debt-to-asset ratio: am I actually wealthy? I grabbed a notebook and made two lists.
First, I listed all my debts. I included:
- Mortgage balance
- Car loan balance
- Credit card balances
- Personal loan
- Student loans
- Every Buy Now, Pay Later plan (Afterpay, Zip, PayPal Pay in 4)
I added them all up. The total was higher than I expected.
Second, I listed all my assets. This was harder because I had to estimate values. I included:
- Current home value (estimated from recent comparable sales)
- Car value (checked online used car prices)
- Savings account balances
- Investment account balances
- Retirement accounts
- Valuable personal property (like my laptop and furniture)
I added those up too.
Then I did the math:
Total Debts ÷ Total Assets = Debt-to-Asset Ratio
My number was 42%. That meant 42% of my assets were financed with debt. The other 58% was truly mine. When I saw that number, I had my answer to debt-to-asset ratio: am I actually wealthy? I was not wealthy yet, but I was on the right track.
What is a “Good” Ratio?
After calculating my number, I needed to know what it meant. I researched what financial experts consider healthy.
According to financial planners, a debt-to-asset ratio below 50% is generally considered good . Below 30% is excellent . Above 50% means you owe more than half of what you own. Above 100% means your debts exceed your assets, which is technically insolvency .
But context matters. Younger people often have higher ratios because they are just starting to build assets . A 26-year-old with student loans and no house might have a high ratio, but that is normal. A 62-year-old with the same ratio would be in trouble .
When I asked debt-to-asset ratio: am I actually wealthy?, I realized the answer depends partly on my age and stage of life. For my age, 42% was okay. But I want it lower.
The BNPL Problem I Almost Missed
Here is where things got interesting. When I first calculated my debts, I almost forgot about Buy Now, Pay Later. I had a few small balances on Afterpay and Zip. I thought they did not matter. But then I did some research.
BNPL usage has exploded in recent years. In 2025, total BNPL transaction value reached an estimated $70 billion in the U.S. alone . Nearly one in four Americans have used BNPL in the last year . And 60% of users have multiple simultaneous loans .
The problem is that BNPL debt often does not show up on credit reports . Lenders have a hard time seeing it. But that does not mean it is not real. When I calculated debt-to-asset ratio: am I actually wealthy?, I had to include every BNPL plan. They are debts. They count.
I added up all my BNPL balances. It was $380. That might not seem like much, but it was still money I owed. It increased my total debts and my ratio. If I had left it out, my number would have been wrong.
Why BNPL Changes the Equation
BNPL is different from other debt in several ways. First, the loans are usually short-term and interest-free if paid on time . But they are still obligations. I have to pay them.
Second, BNPL is increasingly used for everyday expenses like groceries and clothing, not just big purchases . This means the debt can be ongoing. It can become a regular part of your monthly spending.
Third, BNPL usage is highest among younger consumers. Morgan Stanley research shows 41% of people aged 16-24 and 39% of those aged 25-34 have used BNPL . For these age groups, including BNPL in the debt-to-asset calculation is essential.
When I asked debt-to-asset ratio: am I actually wealthy?, I realized that leaving out BNPL would be like leaving out a credit card. It is debt. It counts.
The Problem with Hidden BNPL Debt
One reason BNPL is tricky is that it does not always appear on credit reports. Many BNPL providers do not report loan performance to credit bureaus . This means lenders cannot see it when they check your credit.
But when I calculate my own debt-to-asset ratio: am I actually wealthy?, I am not a lender. I am me. I need to see the full picture. I need to know everything I owe.
The Consumer Financial Protection Bureau has raised concerns about this. If borrowers have multiple BNPL loans across different platforms, it becomes hard to assess their true debt load . This can lead to underestimating risk.
I do not want to underestimate my own risk. So I include every BNPL plan.
Real Data on BNPL and Debt
The numbers helped me put my BNPL usage in context. According to the Federal Reserve Bank of Richmond, the average BNPL loan size in 2023 was $131 . My balances were in that range. The charge-off rate for BNPL loans was just 1.83% in 2023, much lower than the 4.19% rate for credit cards .
This told me that BNPL debt is generally smaller and has lower default rates than other consumer debt. But it is still debt. When I asked debt-to-asset ratio: am I actually wealthy?, every dollar of debt matters, no matter how small.
Morgan Stanley research also showed that BNPL users often have higher balances on other credit products . They are not substituting BNPL for other debt; they are adding it on top. This makes including it in the ratio even more important.
How to Calculate Your Ratio Including BNPL
If you want to answer debt-to-asset ratio: am I actually wealthy? for yourself, here is the step-by-step process I recommend.
Step 1: List all your debts. Go through every account. Include mortgages, car loans, student loans, credit cards, personal loans, medical debt, and every single BNPL plan. Open each app and write down the outstanding balance.
Step 2: List all your assets. Include your home (estimated current value), cars, savings, investments, retirement accounts, and valuable personal property. Be realistic. Use current market values, not what you paid .
Step 3: Add up both lists.
Step 4: Divide total debts by total assets.
Step 5: Multiply by 100 to get a percentage.
That percentage is your answer to debt-to-asset ratio: am I actually wealthy? .
What My Ratio Told Me About My Wealth
When I did this calculation, my ratio was 42%. That meant I owned 58% of my assets free and clear. The other 42% belonged to creditors.
Was I wealthy? No. But I was building wealth. I had positive net worth. I had more assets than debts. That is the first step.
The ratio also showed me where I could improve. My mortgage was the biggest debt, but that is normal. My car loan and BNPL balances were smaller but still added to the ratio. Paying off the small debts would lower my percentage and increase my true ownership.
This is why debt-to-asset ratio: am I actually wealthy? is such a powerful question. It gives you a number to track. You can watch it go down over time as you pay off debt and build assets .
What Lenders Think
Lenders also care about this ratio. When you apply for a loan, they want to see that your assets are sufficient to cover your debts . A high debt-to-asset ratio makes you look risky. A low ratio makes you look stable.
If I had left BNPL out of my calculation, my ratio would have been lower. I might have looked healthier than I really was. But lenders are getting smarter. Many now ask about BNPL directly or scan bank statements for BNPL payments .
When I answer debt-to-asset ratio: am I actually wealthy? for myself, I want the truth. I do not want to fool myself or a lender.
Tips for Improving Your Ratio
If your ratio is higher than you would like, here are some strategies to improve it.
First, pay down high-interest debt. Credit cards and personal loans often have the highest rates. Paying them off reduces your debts and improves your ratio .
Second, avoid taking on new debt. Every new loan increases the top number. Before you borrow, ask yourself if the asset is worth the debt .
Third, increase your assets. Save more, invest more, and let your assets grow. Even if your debt stays the same, a rising asset base lowers your ratio .
Fourth, include everything. Do not ignore BNPL. Do not forget small balances. Every dollar counts when you ask debt-to-asset ratio: am I actually wealthy? .
The Emotional Side of the Ratio
Calculating this ratio was not just about numbers for me. It was about peace of mind. For years, I avoided looking at the full picture. I was scared of what I might find.
But when I finally did the math, I felt relieved. I knew where I stood. I had a baseline. I had a goal. I could track my progress.
If you are avoiding your finances, I understand. I have been there. But I promise you that knowing your debt-to-asset ratio: am I actually wealthy? is better than guessing. The truth, even if it is not perfect, gives you power.
A Simple Example
Let me share a simplified example to make this clear.
Imagine someone named Alex. Alex has:
- Mortgage: $200,000
- Car loan: $15,000
- Credit cards: $5,000
- BNPL balances: $500
Total debts: $220,500
Alex also has:
- Home value: $250,000
- Car value: $20,000
- Savings: $10,000
- Retirement: $30,000
Total assets: $310,000
Debt-to-asset ratio: $220,500 ÷ $310,000 = 0.71 = 71%
Alex’s ratio is 71%. That means 71% of Alex’s assets are financed with debt. Only 29% is truly owned. If Alex had left out the $500 BNPL balance, the ratio would have been 71% anyway because the change was tiny. But if Alex had multiple BNPL plans totaling $2,000, the difference would be noticeable.
The point is that every debt matters. When you ask debt-to-asset ratio: am I actually wealthy?, include everything.
Conclusion
I started this journey with a simple question: debt-to-asset ratio: am I actually wealthy? I ended with a number, a plan, and a new understanding of my finances.
I am not wealthy yet. But I am building. I know my ratio, and I know how to improve it. I include every debt, even the small BNPL plans, because they are part of the picture.
If you have never calculated your debt-to-asset ratio, I encourage you to do it today. Include everything. Be honest. The number might surprise you, but it will also guide you.
For more tools, resources, and community support to help you build true wealth, visit evdrivetoday.com. We share real stories and practical steps for people who want to take control of their financial future.
Let’s Talk About Your Ratio
Now I want to hear from you. Have you ever calculated your debt-to-asset ratio? What was your number? Did you include Buy Now, Pay Later debt in your calculation? Were you surprised by what you found?
Drop a comment below and share your experience. Your story might be the motivation someone else needs to do their own calculation today. Let’s learn from each other and build real wealth together, one honest number at a time.
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