What Is Net Worth? A Simple Guide to Calculating Your Financial Health (2025)
What Is Net Worth? A Simple Guide to Calculating Your Financial Health (2025) You've likely heard the term "net worth" used to describe billionaires like Elon Musk or legendary entertainers. But net worth isn't just a scoreboard for the ultra-rich; it's the single most important measure of your personal financial health. Understanding your net worth is the first step toward taking control of your financial future, setting meaningful goals, and building long-term wealth. But what is it, exactly? And how do you figure out your own? This simple guide will break down everything you need to know. What is Net Worth? A Simple Definition At its core, net worth is a simple snapshot of your financial position at a specific point in time. The formula is straightforward: Total Assets (what you own) - Total Liabilities (what you owe) = Your Net Worth If you own more than you owe, you have a positive net worth. If you owe more than you own, you have a negative net worth. ...