What Is Net Worth?

April 15, 2026

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What we'll cover:

Your net worth equals your total assets minus your total liabilities, and the number is typically expressed as a dollar amount.
It is a general measure of your overall financial health, which can help you plan for the future.
Smart money habits like prioritizing saving and staying on top of your debt can help you build your net worth over time.

In simple terms, your net worth is what you own minus what you owe. It's the total value of everything in your name (e.g., your home, investments, savings, and personal property) minus the debt you're carrying, from student loans and credit cards to mortgages and auto payments.

Some people may think that net worth is a concept relevant only to the ultra-wealthy, but everyone should have a general idea of their net worth. The figure can give you a snapshot of your overall financial health, helping you plan for the future, whether you're saving for a home, planning for retirement, or simply wanting to feel more secure about your money.

What does net worth mean?

Your net worth equals your total assets minus your total liabilities, and the number is typically expressed as a dollar amount.

Net worth can be either positive or negative. Positive net worth is when your assets are greater than your liabilities. Negative net worth, on the other hand, is when your liabilities exceed the value of your assets.

So even by just having a rough estimate of your net worth, you can get a general idea of your financial health. Keep in mind, however, that your net worth is still only a general measure. There are other factors, such as your credit score or credit history, that are also important when we’re talking about your overall financial wellness.

How to calculate net worth

There are online calculators that can help you calculate your net worth, but the math is pretty straightforward:

Net worth = Total Assets – Total Liabilities

You basically subtract your liabilities (anything you owe) from the total value of your assets (anything you own).

Let’s take a closer look at what goes into each category: assets vs. liabilities.

What are assets?

Assets are things you own with monetary value. In other words, items you can put a dollar amount to. Here are some common examples:

Cash
Bank deposit accounts like your checking, savings, and CD accounts
Investment accounts such as your 401(k), IRAs, brokerage accounts
Real estate (e.g., your primary home, rental properties, etc.)
Personal property (e.g., your vehicles, jewelry, valuable collectibles)

What are liabilities?

Liabilities represent any financial obligations you are legally required to pay. This can include any of the following:

Credit card debt
Mortgage, auto, or student loans
Tax bills
Medical bills
Other outstanding balances

Reaching your goal starts with saving for it.

See your saving options

Net worth example

Let’s take a look at a basic example (for illustrative purposes only).

For assets, an individual has:

A house they own outright, valued at $500,000
Retirement accounts with a total balance of $100,000
Deposit accounts with a total balance of $50,000

For liabilities, that same individual has:

A business loan of $100,000
Credit card balances of $50,000

Net worth: $650,000 - $150,000 = $500,000

Smart financial habits to help build net worth over time

There’s no shortcut when it comes to building net worth. It takes time, discipline, and patience.

While everyone’s approach is going to look a little different, the goal is the same: You want to compound your savings while reducing what you owe over time.

Smart financial habits like reducing debt, prioritizing saving over spending, and putting money away for retirement are good building blocks.

Here are a few tips to consider:

Stay on top of your debt. If you have loans, be sure to pay them on time each month to avoid delinquency or default. Also, use credit responsibly and aim to pay your credit card bills in full and on time each month. That way you can avoid accumulating costly interest charges or late fees, which could hurt your credit score and your ability to grow your savings.

Make saving a priority. Get into the habit of paying yourself first when your paycheck lands. For example, consider setting up automatic deposits to your high-yield savings account, which can help you save consistently over time, allowing the power of compound interest to do its work. Also, if you can, try to maximize your annual retirement contributions, especially if your employer offers a 401(k) match.

Know where your money is coming and going. Creating a budget plan can help you better visualize your cash flow each month. You may uncover areas where you could reduce your spending and reallocate those dollars toward your financial goals.

Bring in a financial advisor to help. For those looking to move the needle in the right direction when it comes to building wealth, think about working with a professional financial planner. They can provide an accurate assessment of where you stand financially and put together a personalized financial plan to help you get where you want to be.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.