What Net Worth Means
Net worth is the difference between your total assets and total liabilities. Assets include cash, investments, property, and valuables. Liabilities include loans, credit card balances, and mortgages. A positive number means you own more than you owe.
How to Calculate Net Worth
List every asset and assign its current market value. Then list every debt and its outstanding balance. Subtract total liabilities from total assets. You can use free online calculators from sources like Investopedia to automate the math and track changes over time.
Steps to Build and Track Net Worth
Start by reducing high interest debt and increasing savings. Automate contributions to investment accounts and emergency funds. Review your balances quarterly, update valuations, and adjust spending. Consistent contributions and disciplined borrowing help your net worth grow steadily over time.
