WHAT IS NET WORTH

Net worth is the value of all assets, minus the total of all liabilities. Put another way, net worth is what is owned minus what is owed

Net worth is a combination of financial assets and liabilities. The financial assets that contribute to net worth are homes, vehicles, various types of bank accounts, stocks and bonds. The liabilities are financial obligations such as loans,mortgages and accounts payable that deplete resources.

For individuals, net worth or wealth refers to an individual’s net economic position: the value of the individual’s assets minus liabilities. Examples of assets that an individual would factor into their net worth include retirement accounts, other investments, home(s), and vehicles. Liabilities include both secured debt (such as a home mortgage) and unsecured debt (such as consumer debt or personal loans). Typically intangible assets such as educational degrees are not factored into net worth, even though such assets contribute to one’s overall financial position.

country’s net worth is calculated as the sum of the net worth of all companies and individuals resident in this country, plus the government’s net worth.