What Is Net Worth
Net worth is the difference between your total assets and total liabilities. Assets include cash, investments, real estate, and retirement accounts. Liabilities include mortgages, loans, and credit card balances. A positive number means you own more than you owe.
How to Calculate Net Worth
List every asset at its current market value. Then list every debt at the amount you still owe. Subtract total liabilities from total assets. Use a spreadsheet or a net worth tracker to keep the numbers updated regularly.
Why Tracking Net Worth Matters
Tracking net worth shows your financial progress over time. It helps you see whether your debt is shrinking or your savings are growing. For more guidance on building wealth, see the U.S. Securities and Exchange Commission investor education resources.
