Net Worth

Definition

Net worth is a quantitative measure of your financial health. It represents the value of everything you own (your assets) minus the total of everything you owe (your liabilities).

Example

Suppose you own a house worth $300,000, have $50,000 in investments, and $10,000 in savings. Your total assets are $360,000. You have a $200,000 mortgage and a $5,000 car loan, making your total liabilities $205,000. Your net worth is $360,000 - $205,000 = $155,000.