Net Worth
Net worth is what you own after everything you owe is subtracted. It is the one headline figure that cannot be improved by moving money between accounts: paying a card off from savings lowers both sides and leaves the total where it was.
Total Assets − Total Debts = Net Worth
Income shows earning power and savings rate shows behaviour. Net worth captures the cumulative result of both, which is why it moves slowly and reads differently from either one.
Why it matters
- It is what funds retirement, rather than salary
- It measures accumulation over time, not over one month
- It separates high earners from high savers
- It is the figure financial independence is defined against
This content is educational and informational only. It is not financial, investment, or tax advice. Consult a qualified professional before making financial decisions.