What is Net Worth?
Net worth is everything you own minus everything you owe. It is the single most important measure of financial health. Growing net worth over time — by increasing assets and paying down debt — is the foundation of financial independence.
According to Investopedia, net worth is a measure of an individual's financial health.
Net Worth = Total Assets - Total Liabilities
Frequently Asked Questions
A common benchmark: 1x annual income by 30, 3x by 40, 6x by 50, 10x by 60. The most important metric is whether your net worth is growing consistently year over year.
Yes — home equity (value minus mortgage) is a real asset. Many planners also track liquid net worth (excluding home and vehicles) separately since those assets are illiquid.