Net Worth
Total assets minus total liabilities—the true measure of your financial health
What You Need to Know
Net worth is calculated by subtracting all debts (liabilities) from all assets. It represents your true financial position and is the most comprehensive measure of wealth.
Calculation: Net Worth = Total Assets
- Total Liabilities
Assets Include:
- Cash and savings accounts
- Investment accounts (stocks, bonds, mutual funds)
- Retirement accounts (401k, IRA, pension)
- Real estate (home equity, rental properties)
- Vehicles, jewelry, collectibles
- Business ownership
Liabilities Include:
- Mortgage balances
- Credit card debt
- Student loans
- Auto loans
- Personal loans
- Medical debt
Positive vs. Negative Net Worth:
- Positive: You own more than you owe (wealthy)
- Negative: You owe more than you own (debt burden)
Example: $500,000 assets - $300,000 liabilities = $200,000 net worth
Sources & References
This information is sourced from authoritative government and academic institutions:
- consumerfinance.gov
https://www.consumerfinance.gov/consumer-tools/financial-well-being/
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
Net Worth Tracker
Track your assets and liabilities to calculate your net worth
Complete Net Worth Dashboard
All-in-one wealth tracker: calculate net worth, compare to age group, and see global wealth percentile
Net Worth Age Comparison
Compare your net worth to average and median benchmarks for your age group
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50/30/20 Rule
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Automated Savings
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Budget
A spending plan that tracks income and expenses to ensure you're living within your means and working toward financial goals.