Money Basics

Net Worth

Net worth is the value of your assets minus your liabilities. It is a snapshot, not a complete score of financial health.

4 min

Money 101 • 05

Net worth is one subtraction.

Add the value of your assets, then subtract what you owe.

It is a snapshot of your financial position.

Net worth can help show whether the value you own is growing relative to your debts.

Changes can come from both sides.

01Saving more cash02Investment values changing03Paying down debt04Borrowing more05A home or other asset changing value

Net worth and income answer different questions.

01

Income

How much money comes in over time.

02

Net worth

What you own minus what you owe at a point in time.

The calculation is simple.

Assets$120,000
Liabilities$45,000
Net worth$75,000
FormulaAssets minus liabilities

A higher net worth does not automatically mean easier monthly finances.

Someone can own valuable assets and still have tight cash flow if those assets are not easy to access.

Net worth is most useful when you use it as a trend.

01Use reasonable current values02Use current debt balances03Update it periodically04Look at the direction, not only one number

Remember this

Net worth is a useful snapshot, not a financial grade.

It shows one part of the picture: what you own after subtracting what you owe.

Lesson complete

Reviewed 2026-08-18

Sources

Financial Consumer Agency of CanadaChoosing a financial advisor ↗Ontario Securities Commission, GetSmarterAboutMoneyGlossary ↗
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