What Is Net Worth
Net worth is the difference between your total assets and total liabilities. It shows your financial position at a specific point in time. A positive number means assets exceed debts; a negative number means the opposite.
How to Calculate Net Worth
List all assets, such as cash, investments, real estate, and retirement accounts. Then list all liabilities, including mortgages, loans, and credit card balances. Subtract total liabilities from total assets to get your net worth. Update the calculation regularly to track progress.
Why Net Worth Matters
Net worth provides a clear snapshot of your financial health beyond income alone. It helps you assess debt levels, measure wealth growth, and set realistic financial goals. For more guidance on tracking financial metrics, visit the U.S. Securities and Exchange Commission's investor education page at investor.gov.
