What is Net Worth?
Net worth is the total value of everything you own (assets) minus everything you owe (liabilities). It is the most accurate single measure of your financial health and wealth-building progress.
Assets to Include
- Cash in bank accounts and savings
- Investment accounts, stocks, mutual funds
- Retirement accounts (401k, RRSP, ISA, PPF)
- Real estate value (current market value)
- Vehicle value (current resale value)
- Business ownership value
Liabilities to Include
- Mortgage outstanding balance
- Car loans
- Credit card balances
- Student loans
- Personal loans
- Any other money owed
Frequently Asked Questions
What is a good net worth by age?
A common benchmark is to have a net worth equal to your annual salary by age 30, three times your salary by 40, six times by 50, and eight times by 60. However, these are guidelines — what matters most is consistent improvement over time.
Is a negative net worth bad?
A negative net worth is common for young people, especially those with student loans. It is not a crisis — what matters is the direction. If your net worth is improving each month, you are on the right track.