What Is Net Worth?
Net worth is the value of everything you own minus everything you owe. It is a single number that shows your financial position at a specific point in time.
How Net Worth Is Calculated
To calculate net worth, add up all assets, such as cash, investments, real estate, and retirement accounts. Then subtract all liabilities, including mortgages, loans, and credit card balances. The result is your net worth.
Why Net Worth Matters
Net worth helps track wealth over time and compare financial health across households. It is used by lenders, advisors, and researchers to assess financial stability. You can learn more about personal balance sheets from the Investopedia net worth guide.
