Net Worth

Net worth means the total value of what someone owns minus what they owe. In simple terms, net worth shows what is left after subtracting debts from assets. Net worth is important because it gives a broader picture of a person’s financial health than income alone. A person can have a high income but low net worth if they also have a lot of debt. For example, if someone owns $300,000 in assets and owes $120,000 in debt, their net worth is $180,000. Net worth is not the same as income. Income is money received over time, while net worth is the overall value of what someone owns after debts are subtracted.