How it works
Net worth is the simplest measure of your financial position:
A positive number means you own more than you owe. A negative number is common early in life (student loans, a new mortgage) — what matters is the trend: is it growing year after year?
How to grow your net worth
- Pay down high-interest debt first — credit card balances shrink net worth twice (debt stays, interest grows it).
- Automate investing — monthly contributions to a 401(k), IRA or ISA compound quietly in the background.
- Track it yearly — recalculate every 12 months and compare. Progress beats perfection.
What counts as an asset?
Anything with real market value: cash, investments, retirement accounts, your home’s market value, a paid-off car. Don’t count sentimental value — only what you could actually sell it for.
Frequently asked questions
What is a good net worth by age?
A common US benchmark: by 30, aim for ~1× your annual salary; by 40, ~3×; by 50, ~6×; by 60, ~8× (Fidelity guidelines). These are targets, not rules.
Is home equity part of net worth?
Yes — count your home’s market value as an asset and the remaining mortgage as a liability. The difference (equity) is what adds to net worth.
My net worth is negative. Is that bad?
Not necessarily — it’s normal with student loans or a new mortgage. Focus on the direction: shrinking debt and growing assets each year.