What Net Worth Means
Net worth is the difference between total assets and total liabilities. It measures financial position for individuals, families, or businesses.
Examples of Net Worth
An individual with $500,000 in savings, investments, and property, and $200,000 in loans, has a net worth of $300,000. A small business with $1 million in equipment and inventory, minus $400,000 in debt, shows a $600,000 net worth.
Why Net Worth Matters
Tracking net worth helps measure wealth over time. A rising net worth usually signals improving financial health. You can learn more about calculating net worth from Investopedia.
