What Is Net Income
Net income is the profit left after subtracting all expenses, taxes, and costs from total revenue. It appears on the income statement and shows how much a business or individual earned during a specific period.
What Is Net Worth
Net worth is the value of everything you own minus everything you owe. It is calculated by subtracting total liabilities from total assets and represents your overall financial position at a point in time.
How Net Income and Net Worth Differ
Net income measures earnings over a period, while net worth measures wealth at a single moment. High net income can increase net worth if savings and investments grow, but income alone does not equal wealth. To understand the full picture, track both income and assets over time using reliable resources like the U.S. Securities and Exchange Commission.
