finance

Net Worth

The total value of all assets minus all liabilities, representing overall financial health.

Net worth is the single best measure of your financial health. It equals everything you own (assets) minus everything you owe (liabilities).

Assets Include

  • Cash and savings
  • Investments (401k, IRA, brokerage)
  • Real estate (market value)
  • Vehicles and personal property

Liabilities Include

  • Mortgage balance
  • Student loans
  • Credit card debt
  • Auto loans

A negative net worth is common for young adults with student loans or new mortgages. The goal is to grow your net worth over time by increasing assets and reducing debt.

Related Calculators

📊 Net Worth Calculator📊 Savings Calculator

Related Articles

📝 How to Calculate Net Worth📝 The 50/30/20 Budget Rule

Related Terms

APR (Annual Percentage Rate)

The yearly cost of borrowing money expressed as a percentage, including fees and interest.

Compound Interest

Interest calculated on both the initial principal and the accumulated interest from previous periods.

Amortization

The process of spreading loan payments over time so each payment covers both principal and interest.

ROI (Return on Investment)

A ratio measuring the gain or loss from an investment relative to its cost, expressed as a percentage.

Equity

The ownership value in an asset after subtracting any debts owed against it.

Inflation

The rate at which the general level of prices for goods and services rises, decreasing purchasing power.