What Is Net Worth?
Net worth is the total value of everything you own minus everything you owe. It is a single number that shows your financial position at a specific point in time.
How Net Worth Is Calculated
To calculate net worth, add up the value of your assets, such as cash, investments, property, and retirement accounts. Then subtract all your liabilities, including loans, credit card balances, and mortgages. The result is your net worth.
Why Net Worth Matters
Net worth helps you understand your overall financial health. It is used by lenders, advisors, and researchers to compare financial positions over time. Tracking net worth can show whether you are building wealth or reducing debt. You can learn more about personal finance basics from the Consumer Financial Protection Bureau.
