What Is Net Worth?
Net worth is the total value of everything a person or organization owns (assets) minus everything it owes (liabilities). It is a snapshot of financial position at a single point in time and can be positive or negative.
Formula
Net worth = total assets − total liabilities.
Example
Assets of 350,000 (a 300,000 home, 30,000 in savings, and a 20,000 car) and liabilities of 230,000 (a 210,000 mortgage and a 20,000 car loan) give a net worth of 120,000.
Net Worth vs. Income
Income measures money flowing in over a period; net worth measures what remains after subtracting debts from what is owned.
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.