◈ GLOSSARY · PERSONAL FINANCE
Net Worth.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
Everything you own minus everything you owe. Assets include cash, investments, retirement accounts, and the market value of your home; liabilities are mortgage, student loans, car loans, and credit card balances. It's the truest single scoreboard of personal finance — income tells you the rate, net worth tells you the position.
◈ IN PRACTICE
Example
Home worth $500,000, $200,000 in a 401(k), $30,000 cash, minus a $340,000 mortgage and $25,000 in student loans = net worth of $365,000.
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