What Is Net Worth?
Net worth is the total value of what you own minus what you owe. It is a standard measure of financial position used by individuals, businesses, and institutions.
How Net Worth Is Calculated
Add the value of assets such as cash, investments, real estate, and vehicles. Then subtract liabilities like mortgages, loans, and credit card balances. The result is your net worth.
Why Net Worth Matters
Net worth shows financial health more clearly than income alone. It helps track progress over time, compare wealth across households, and guide decisions about saving and investing. For more detail, see the Investopedia definition of net worth.
