Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. It is a quantitative concept that measures the value of an entity and can apply to individuals, corporations, sectors, and even countries. Net worth provides a snapshot of an entitys current financial position and is used in the financial world to qualify certain individuals for particular investment strategies or financial products such as hedge funds, structured products, or other complex or alternative investments.

To calculate net worth, one needs to subtract all liabilities from assets. Assets are anything owned that has monetary value, while liabilities are obligations that deplete resources, such as loans, accounts payable, and mortgages. Examples of assets that an individual would factor into their net worth include retirement accounts, other investments, home(s), and vehicles. Liabilities include both secured debt (such as a home mortgage) and unsecured debt (such as consumer debt or personal loans) .

Net worth is a good way of understanding the true wealth of an individual or business. Tracking your net worth over time is a helpful indicator of your financial stability and can help you understand where your money has gone in the past vs. where you want it to go in the future.