What Is Assets Minus Liabilities?
Assets minus liabilities is also called net worth. It measures the value you own after subtracting what you owe. A positive result means your assets exceed your debts, while a negative result means the opposite.
How to Calculate Net Worth
List all your assets, such as cash, investments, real estate, and retirement accounts. Then list your liabilities, including loans, credit card balances, and mortgages. Subtract total liabilities from total assets. The formula is Net Worth = Total Assets − Total Liabilities.
Why Net Worth Matters
Net worth gives a clear snapshot of your financial position at a point in time. It helps track progress, compare financial health across periods, and support decisions about saving, investing, or borrowing. For more on personal finance fundamentals, see the Investopedia overview of net worth.
