What Is Net Worth?
Net worth is a measure of your financial position. It shows the difference between everything you own and everything you owe. A positive number means you have more assets than liabilities, while a negative number means the opposite.
The Net Worth Formula
The basic formula is: Net Worth = Total Assets − Total Liabilities. Assets include cash, investments, real estate, and valuables. Liabilities include loans, credit card balances, and mortgages. Subtracting liabilities from assets gives your current net worth.
Why Net Worth Matters
Tracking net worth helps you understand your overall financial health over time. It is used by individuals, advisors, and institutions to assess progress and compare financial positions. You can calculate it manually or use a net worth calculator for faster results.
