Net worth
Net worth is everything you own, at its current value, minus everything you owe, measured on a single date. Assets such as cash, investments and property go on one side; debts such as loans and card balances go on the other.
By Beacon · Updated
How it works
To calculate it, list your assets at their current value: checking and savings balances, retirement and investment accounts, and the estimated market value of things like a car or a home. Then list your liabilities at what you still owe, such as mortgage, car and student loan balances and credit card debt. Subtract the second total from the first.
A single snapshot says less than the trend. Recalculating once a year with the same method shows whether saving, paying down debt and changes in asset values are moving the number up or down. A negative result can happen when student loans or a car loan outweigh your assets; it describes a starting point rather than a verdict.
Net worth is not the same as cash on hand. A home, a car or a retirement account counts toward it, but turning them into cash can take time and may involve costs or taxes. For estimated values, using what an item would sell for today, not what you paid, keeps the figure realistic. Tracking available cash separately shows what can cover next month’s bills.
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Sources and further reading
Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.