What Your Net Worth Is the Difference Between
Your net worth is the difference between your total assets and your total liabilities. Assets include cash, investments, property, and valuables you own outright. Liabilities include loans, credit card balances, mortgages, and other debts you owe.
How to Calculate Net Worth
To calculate net worth, subtract all liabilities from all assets. A positive result means you have more assets than debts, while a negative result means your debts exceed your assets. This simple formula is the foundation of personal net worth tracking.
Why Net Worth Matters
Net worth gives a clear snapshot of your overall financial position at a point in time. It helps you measure progress, compare financial health over time, and set realistic goals. For more details on assets and liabilities, see the Investopedia definition of net worth.
