Net Worth Explained: A Simple Guide to Measuring Your Wealth

Net worth is the total value of what you own minus what you owe. It provides a clear snapshot of your financial health. To calculate it, add up all your assets, such as cash, savings, investments, property, and valuable possessions. Then subtract your liabilities, including loans, credit card balances, and other debts. The result is your net worth, which can be positive or negative. Understanding your net worth helps you track financial progress, set realistic goals, and make better decisions. Regularly reviewing it allows you to improve your financial position and build long-term wealth over time.