This term refers to the total estimated value of an individual’s assets, including investments, properties, and other holdings, minus their liabilities. Calculating this figure involves considering various factors such as real estate ownership, business interests, and other income sources. It provides a snapshot of an individual’s financial standing at a specific point in time. Understanding this concept is crucial for assessing financial success and planning for the future.
For instance, a business owner’s holdings would include the value of their company, any personal real estate, and other investments. Another example would be an individual with a significant portfolio of stocks and bonds; their net worth would be calculated based on the current market value of those holdings, along with any other assets they possess, less any outstanding debts. These calculations offer a comprehensive overview of an individual’s financial health.