Net Worth: What Does It Mean?

Net worth is the total value of everything an individual or entity owns (assets) minus everything they owe (liabilities). Assets include savings, investments, real estate, and personal property, while liabilities include mortgages, loans, and credit card balances. Net worth is one of the most comprehensive measures of financial health, reflecting the cumulative result of earning, spending, saving, and investing decisions over time. Tracking net worth regularly helps individuals measure progress toward financial goals and identify areas for improvement.