Net worth

Everything you own, minus everything you owe.

Example

A $300,000 house with a $200,000 mortgage, plus $50,000 in savings and investments and no other debt, is a net worth of $150,000.

Important

Net worth is a snapshot, not a plan - two people with the same number can be in very different positions depending on how liquid and how leveraged it is.

Related terms

• Asset — Anything you own that is expected to hold or produce value - a share, a bond, a property, a business.
• Debt — Money lent that must be repaid with interest, regardless of how the borrower's business or asset performs.
• Liquidity — How quickly and cheaply an asset can be converted to cash without moving its own price.

Lessons that explain it

• Is investing right for you, right now? — Not everyone should be investing everything they have, and not everyone should be investing yet at all. This lesson is the honest gate before the rest of the Academy. (10 min)

All 578 terms in the Investing glossary