CentiPlain
GlossaryReference

Net Worth

Everything you own minus everything you owe.

What Net Worth means

Net worth is the difference between your assets (what you own — cash, investments, home, car) and your liabilities (what you owe — loans, credit cards, mortgage). It is a snapshot, not a score: a high-income person with heavy debt can have a lower net worth than a modest earner who owns their assets. Tracking it over time shows whether you're building wealth, but it's never a measure of personal worth.

Example

If your savings, investments and possessions add up to $30,000 and you owe $12,000 in loans, your net worth is $18,000.

Related terms

Emergency FundCredit ScorePrincipalInflation

Disclaimer

Definitions are simplified for educational use and are not personalized financial, investment, tax or legal advice.

You may also like

Saving

How High-Yield Savings Accounts Work

The low-effort, no-risk upgrade to your emergency fund: what a high-yield savings account is, how rates are set, and how to pick one.

· 3 min read

Saving

How to Automate Your Savings

The five-transfer setup that makes saving almost effortless: payday automation, auto-investing, and how to build a system that runs with zero willpower.

· 3 min read

Saving

How to Build an Emergency Fund

The step-by-step guide to building an emergency fund: what it's for, how much you need, where to keep it, and how to get there without wrecking your budget.

· 3 min read

Savings Rate

What share of your income do you actually keep?

FIRE

An honest estimate of your path to financial independence.

Frequently asked questions

If your savings, investments and possessions add up to $30,000 and you owe $12,000 in loans, your net worth is $18,000.

Browse the full glossary

16 terms explained in plain English.

All terms →