What Is Net Worth
Net worth is the total value of everything a person owns minus everything they owe. It is a snapshot of financial position at a specific point in time.
How to Calculate Net Worth
Add up assets such as cash, investments, real estate, and retirement accounts. Subtract all liabilities, including mortgages, loans, and credit card balances. The result is your net worth. You can use online calculators to track changes over time.
Why Net Worth Matters
Net worth helps measure wealth more accurately than income alone. A high income does not guarantee a strong financial position if debts are also high. Tracking net worth can show progress toward long-term financial goals. For more on personal finance basics, visit Investopedia.
