Glossary
Net Worth
Everything you own minus everything you owe — the single number that tracks overall financial progress.
Net worth is the one-line balance sheet of a household: everything you own (assets) minus everything you owe (liabilities). It’s the only common financial metric that integrates every decision you’ve made — earning, spending, borrowing, investing — into a single trackable number.
Assets count at realistic current values: home market value, retirement and brokerage accounts, cash, vehicles. Liabilities count at today’s payoff balances: mortgage, loans, cards. The difference can absolutely be negative — common early in careers, especially with student debt — and a negative reading is a position, not a verdict. What matters is the trajectory: net worth measured quarterly, plotted over years.
A useful refinement is separating liquid from illiquid wealth. Home equity often dominates household net worth but can’t pay a grocery bill; many planners track “investable net worth” (excluding the primary residence) alongside the headline number. Composition matters as much as size — see liquidity.
Net worth also anchors bigger frameworks: the FIRE movement defines financial independence as net invested assets crossing 25× annual spending. Build your itemized statement in the net worth calculator — ten minutes, repeated quarterly, produces the most motivating chart in personal finance.
Related calculators
- Net Worth CalculatorAdd up what you own, subtract what you owe, and get the single number that tracks your financial progress. Itemized, instant, private.
- FIRE CalculatorCalculate how many years until financial independence based on your savings rate, using the 4% rule. See how saving more moves your FIRE date.