The basic calculation
List assets such as cash, retirement accounts, investments, and property. Then list debts such as credit-card balances, student loans, auto loans, and a mortgage. Subtract the second list from the first.
For a deeper look at this topic, see our full guide to What Is Cash Flow and Why Does It Matter?.
What the number can show
Tracking net worth over time can reveal whether debt is shrinking, savings are growing, or a major purchase changed the picture. It can help you see progress that a monthly bank balance misses.
What it cannot show
Net worth does not measure security, generosity, health, housing quality, or the work it took to get through a difficult year. Use it as information for a decision, not as a judgment about a person.
We cover this in more detail in our guide to What Is Liquid Net Worth and Why Is It Different From Net Worth?.