This term refers to the total accumulated value of an individual’s assets, minus their liabilities. Assets can include real estate, investments, and personal property. Liabilities encompass debts like mortgages and loans. Understanding this concept provides insight into an individual’s overall financial standing.
For instance, a successful entrepreneur might have a high net worth due to business ownership and investments. Conversely, someone with significant debt and few assets could have a low or even negative net worth. It’s a dynamic figure influenced by market fluctuations and financial decisions. Calculating this requires a comprehensive assessment of all holdings and obligations.