Net Worth
Your net worth is the total value of everything you own (your assets) minus everything you owe (your debts).
What it means
Your net worth is the total value of everything you own (your assets) minus everything you owe (your debts). It's a snapshot of your overall financial position. As you save, invest or pay off debt, your net worth will usually increase over time.
You own a home with £80,000 of equity, have £15,000 in savings and investments, and owe £5,000 on a loan. Your net worth is £90,000.
Why it matters
Unlike your salary, net worth shows your overall financial health rather than how much you earn each month.
Someone on a modest income can have a higher net worth than someone with a high salary if they've built assets and kept debt low.
What if my net worth is negative?
It's common when you're starting out or have student loans or a mortgage. The goal is to improve it steadily over time.