Net worth: Your financial scoreboard

Net worth is a snapshot: add up meaningful assets, subtract liabilities, and label the date. FINRA's beginner explanation includes savings, investments, personal property, and real estate as asset examples, and mortgages, credit-card balances, and loans as liabilities. 1

This episode uses a made-up example to show the arithmetic and explains why a positive or negative result is a measurement, not a grade. The Federal Reserve's household balance-sheet chart puts assets, liabilities, and net worth in the same frame. 2

A higher number can reflect saving, debt repayment, or changing estimated values; a lower number can reflect borrowing, spending, or changing values. The Consumer Financial Protection Bureau warns that financial well-being is hard to measure using only numbers such as income, net worth, or credit score because each person's situation is unique. 3

This show is educational only and is not registered investment advice. The examples are for learning, not a recommendation or a personal financial plan.