What Net Worth or Equity Means
Net worth, also called equity, represents the value left after subtracting what you owe from what you own. It is a core measure of financial position used in personal finance and corporate accounting.
How to Calculate Net Worth
To calculate net worth, add the total value of your assets, then subtract your total liabilities. Assets include cash, investments, real estate, and vehicles. Liabilities include loans, credit card balances, and mortgages.
Why Net Worth Matters
Tracking net worth helps you understand your financial health over time. A growing net worth usually indicates improved savings, debt reduction, or asset growth. For more on asset and liability basics, see Investopedia.
