What Net Worth Is Equal To
Net worth is equal to total assets minus total liabilities. Assets include cash, investments, real estate, and personal property. Liabilities include loans, mortgages, credit card balances, and other debts.
How to Calculate Net Worth
To calculate net worth, list all assets at current market value and subtract all outstanding liabilities. The result is your net worth. A positive number means assets exceed debts; a negative number means debts exceed assets.
Why Net Worth Matters
Net worth provides a clear snapshot of financial health. It helps track progress over time and compare financial positions across households or businesses. Financial institutions often use net worth to assess creditworthiness and financial stability. Learn more about net worth.
