what is net worth

Quick Scoop: Net worth is the value of what you own minus what you owe. In simple terms: assets - liabilities = net worth

What counts

Assets are things with value, like:

• Cash and savings.
• Investments.
• Real estate.
• Vehicles and other valuable property.

Liabilities are debts and obligations, such as:

• Mortgages.
• Loans.
• Credit card balances.
• Taxes owed.

Why it matters

Net worth gives you a quick snapshot of financial health. It can be positive if your assets are worth more than your debts, or negative if you owe more than you own.

Simple example

If you own:

• $50,000 in savings and investments.
• $200,000 in a home.

And you owe:

• $120,000 on a mortgage.
• $10,000 in other debt.

Your net worth is: 50,000+200,000−120,000−10,000=120,00050,000+200,000-120,000-10,000=120,00050,000+200,000−120,000−10,000=120,000 So your net worth would be $120,000.

Bottom line

Net worth is a straightforward way to measure your overall financial position and track progress over time.