**Net worth** refers to the total value of a person’s or organization’s financial position after subtracting all liabilities from assets. It is calculated by adding up assets such as cash, property, investments, businesses, and valuable possessions, then deducting debts like loans, mortgages, and other financial obligations. Net worth is often used as a key indicator of financial health because it shows how much wealth is actually owned rather than just how much income is earned. A positive net worth means assets exceed liabilities, while a negative net worth indicates more debt than assets. Over time, increasing net worth usually reflects smart financial planning, saving, and investment growth.