Finance
What Is Net Worth?
Net worth is everything you own (assets) minus everything you owe (liabilities) — the standard single-number snapshot of financial health.
Net worth is calculated by adding up all assets — cash, investments, retirement accounts, property, vehicles — and subtracting all liabilities, such as mortgages, student loans and credit card balances. The result can be negative, which is common early in life.
Tracked over time, net worth is a better health indicator than income: it captures whether money is actually being converted into wealth. A high earner with matching spending can have a lower net worth than a modest earner who invests consistently.