What Is Net Worth?
Your net worth is the total value of everything you own (assets) minus everything you owe (liabilities). It is the single most comprehensive measure of your financial health — more meaningful than income alone, because it captures both what you have built and what you still owe.
Net Worth = Total Assets − Total Liabilities
A positive net worth means your assets exceed your debts. A negative net worth (common early in life due to student loans or mortgages) means you owe more than you own. The goal is to grow your net worth over time by increasing assets and reducing liabilities.
What Is a Good Net Worth?
Net worth varies enormously by age. A useful benchmark from financial research: your target net worth at any age is roughly your annual income multiplied by your age, divided by 10. For example, a 35-year-old earning $80,000/year should aim for a net worth of approximately $280,000. Track your net worth quarterly to measure progress toward your financial goals.