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Net worth is what you own minus what you owe. It's the clearest single snapshot of your financial position, and tracking it over time shows whether your decisions are moving you forward.
How to calculate it
- List assets: cash, investments, retirement accounts, home equity, vehicles.
- List liabilities: mortgages, student loans, credit cards, car loans.
- Subtract liabilities from assets.
Negative net worth is common
Many young adults start negative because of student loans. That's not failure — it's a starting line. The trend matters far more than the number.
“Income is what you earn. Wealth is what you keep.”
Written by
James Whitfield
Wealth Correspondent
James writes about net worth, real estate and financial independence for readers playing the long game.
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