What Is Net Worth?
Net worth is the difference between what you own and what you owe. It equals your total assets minus your total liabilities. A positive number means you have more assets than debts, while a negative number indicates the opposite.
How to Calculate Net Worth
List all your assets, such as cash, investments, retirement accounts, and property. Then list all liabilities, including mortgages, loans, and credit card balances. Subtract total liabilities from total assets to get your net worth. Update the calculation regularly to track progress.
Why Net Worth Matters
Net worth provides a clear snapshot of your overall financial health. It helps you understand whether you are building or losing wealth over time. Many financial advisors use net worth as a key measure when planning savings, investments, and retirement strategies. For more on tracking personal wealth, see Investopedia.
