A quantification of an individual’s accumulated assets, encompassing real estate, investments, and other holdings, minus outstanding liabilities, provides a snapshot of their financial standing. This calculation considers both liquid assets, such as cash and readily marketable securities, and illiquid assets like property or private business interests. Understanding this figure can be crucial for assessing financial health and potential investment opportunities. Calculating this often involves professional appraisal to ensure accurate valuation of diverse holdings.
For instance, a business owner might have a substantial net worth due to the value of their company, even if their liquid assets are relatively low. Conversely, an individual with significant savings but high debt might have a lower net worth. These examples illustrate the multifaceted nature of wealth assessment.