ELI5: Explain Like I'm 5

net worth

Net worth is like a scorecard of how much money, assets and property you have. It is different from how much you make in a year or how much money is in your bank account.

To calculate net worth, you add up everything you own (your assets) such as your home, car, furnishings and jewelry. Then you subtract what you owe, like credit cards or loans (your liabilities). The remaining amount is your net worth.

For example, if you own a house worth $200,000 and you owe $50,000 on your mortgage loan, you would subtract the $50,000 from the $200,000, leaving you with a net worth of $150,000.
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