Net Worth Formula
Net worth equals total assets minus total liabilities. Assets include cash, investments, real estate, and personal property. Liabilities include loans, credit card balances, and mortgages. The result shows your overall financial position at a specific point in time.
How to Calculate Net Worth
List the current market value of everything you own, then subtract the amount you still owe. Use recent statements, account balances, and property estimates for accuracy. For more guidance on calculating net worth, visit Investopedia.
Why Net Worth Matters
Net worth provides a clear snapshot of your financial health beyond income alone. Tracking it over time helps you see whether you are building wealth or accumulating debt. A rising net worth generally indicates improved financial stability.
