What Is Net Worth
Net worth is the difference between your total assets and total liabilities. Assets include cash, investments, property, and valuables. Liabilities include loans, credit card balances, and mortgages. When liabilities exceed assets, the result is a negative net worth.
What Does Negative Net Worth Mean
Negative net worth means you owe more than you own. It does not necessarily mean you are financially failing, especially if you carry low interest debt while building assets. Common causes include student loans, medical debt, or large mortgages, as explained by the Consumer Financial Protection Bureau.
How to Improve Your Net Worth
You can improve your net worth by reducing debt, increasing savings, and growing assets over time. Focus on paying down high interest liabilities first. Tracking your net worth regularly helps you measure financial progress and make informed decisions.
For a detailed explanation of net worth calculations, see Investopedia.
