Investing term

What is Net worth?

Everything you own minus everything you owe.

Net worth is everything you own minus everything you owe — the single number that captures your overall financial position. Tracking it over time, rather than fixating on any one account or investment, is the clearest measure of whether you're building wealth. It can rise from earning more, spending less, paying down debt, or investments growing.

For example

Add up $30,000 of savings and investments, subtract a $12,000 loan, and your net worth is $18,000 — the figure to watch climb over the years.

Net worth is taught hands-on in Stage 1 — Money, Goals & Your Financial Foundation.

See the lesson →

Related terms

APRAnnual Percentage Rate. The yearly interest cost of a loan, including most fees.CompoundingWhen your returns earn returns of their own, so money grows faster the longer it's invested.Emergency fundCash reserved for unexpected expenses, usually 3–6 months of your usual spending.Employer matchFree money from an employer that matches part of what you contribute to a workplace retirement plan.
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