Definition:

Net worth is a measure of personal finance success, or measure of reaching financial goals. In a nutshell, your net worth is all the money and assets you own with liabilities like loan, mortgage and credit card balances subtracted out. The higher your net worth, the more financially stable you are.

Net worth is the value of all assets (properties, 401(k)s, securities, etc.) plus cash (including savings and checking accounts), minus all liabilities (loans, credit card balances and mortgages).

Most personal finance software will generate a net worth report for you once all your financial accounts are added to the software along with your assets like the value of your home and other property.

To learn more about how net worth is calculated, see How to Calculate Your Net Worth.

• How to Track Income in Personal Finance Software

Examples: Once John paid off his college loan, his net worth was a positive number.