What Is Net Worth?
Net worth is the total value of everything you own minus everything you owe. It is a standard measure of personal or business financial health used by accountants, advisors, and analysts.
How to Calculate Net Worth
Add the value of your assets, such as cash, investments, real estate, and retirement accounts. Then subtract your liabilities, including loans, credit card balances, and mortgages. The result is your net worth.
Why Net Worth Matters
Tracking net worth helps you understand your overall financial position over time. A rising net worth generally indicates wealth accumulation, while a falling figure may signal financial stress. For more details, see the Investopedia definition of net worth.
