What is net worth

Net worth in finance refers to the total value of an individual's or organization's assets minus their liabilities. It is a measure of wealth and financial health, representing the amount by which assets exceed liabilities. Net worth is important for individuals as well as businesses, as it provides a snapshot of their overall financial situation and can be used to assess their ability to meet financial obligations, invest, and grow wealth. It is also a key factor in determining creditworthiness and financial stability. Calculating net worth involves adding up all the assets, such as cash, investments, real estate, and personal property, and subtracting all liabilities, such as debts, loans, and other financial obligations. Monitoring net worth over time can help individuals and organizations track their financial progress and make informed decisions about budgeting, investing, and long-term financial planning.