What Is Net Worth
Net worth is the difference between what you own and what you owe. It is a single number that summarizes your financial position at a specific point in time.
How to Calculate Net Worth
List all your assets, such as cash, investments, retirement accounts, and property. Then list all your liabilities, including loans, credit card balances, and mortgages. Subtract total liabilities from total assets to get your net worth. For more detail, see the Investopedia guide on net worth.
Why Net Worth Matters
Tracking net worth helps you understand overall financial health, measure progress over time, and compare your position against benchmarks. It focuses on wealth, not just income, and can guide decisions about saving, investing, and debt repayment.
