Net worth is a financial calculation that measures the value of an individual’s or organization’s assets minus their liabilities. Net worth is typically expressed in monetary terms and can be used to assess financial health and track progress toward financial goals. For example, if an individual has $100,000 in assets and $50,000 in liabilities, their net worth would be $50,000.
Net worth is a crucial aspect of financial planning and wealth management. It can help individuals and organizations determine their financial position, make informed investment decisions, and plan for the future. Historically, net worth calculations have evolved from simple accounting practices to sophisticated financial models used by businesses and financial institutions.