Net worth is the total value of everything you own minus everything you owe. Assets include cash, investments, property and business interests; liabilities include mortgages, loans and credit-card balances. It is the single clearest snapshot of your financial position at a point in time.
Worked example
You own a home worth $400,000, investments worth $120,000 and $20,000 in cash, against a $250,000 mortgage and $10,000 of other debt. Net worth = 540,000 − 260,000 = $280,000.
Why it matters
Net worth, tracked over time, shows whether you are genuinely building wealth — far more than income alone does. For people whose assets span several currencies, net worth must be consolidated into one base currency to be meaningful.
Frequently asked questions
Monthly or quarterly is enough for most people. The trend over time matters far more than any single reading.
If your assets and debts sit in different currencies, exchange-rate moves change your net worth even when nothing else does — so a multi-currency view is essential for expats and global investors.