Define Net Wealth
The value of assets minus liabilities
Net wealth, also known as net worth, is the cumulative value of an individual’s assets minus their liabilities. In simpler terms, it is the difference between what someone owns and what they owe.
Assets can include cash, investments, real estate, businesses, and personal possessions like jewelry, vehicles, and artwork. Liabilities, on the other hand, include debts like credit card balances, student loans, and mortgages.
Calculating net wealth is a way to measure an individual’s overall financial health and to determine their ability to meet their financial obligations and achieve long-term financial goals. It is an important metric used by financial institutions, investors, and individuals when making financial decisions.
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