A simple way to measure your overall financial picture: everything you own that’s worth money (savings, investments, a car, a home) minus everything you owe (credit card balances, student loans, a mortgage). The result is your net worth. It’s a useful single number to track over time to see if you’re actually moving forward financially.
Walk through the numbers
You have $15,000 in savings, $40,000 invested and a car worth $12,000. You owe $18,000 on student loans and $8,000 on the car. Your net worth is $67,000 minus $26,000, or $41,000.
Tracked over time, it is the clearest single sign of whether you are moving forward.
Related terms
For education only and not personalized investment advice. Examples are hypothetical illustrations, not a prediction or a promise of results. All investing involves risk, including the possible loss of principal.