What Is Net Worth?

[daisy]

I keep hearing people talk about net worth when it comes to personal finance and wealth, but I’m not exactly sure what it means. How is net worth calculated, and why is it considered important?


Is it just the difference between assets and debts, or is there more to it? Also, how often should someone check their net worth to track financial health?


Would love to hear your thoughts and examples.

 

[Emly]

Net worth is the total value of a person’s or company’s assets (like cash, investments, and property) minus their liabilities (such as debts and loans). It’s a snapshot of overall financial health, showing what someone truly owns after subtracting what they owe.

 

[Lucky]

Net worth is the total value of a person’s assets minus liabilities. Assets include cash, property, investments, and valuable possessions, while liabilities cover debts, loans, and obligations. A positive net worth reflects financial health, while a negative one indicates more debt than assets. Tracking net worth helps measure progress toward financial goals and security.