angel and Alessia calculate their assets to be valued at $150,000. they calculate liabilities to be $125,000. Their net worth is $25,000.
Net worth = Total assets - Total liabilities
= 150,000 - 125,000
= 25,000
A person or institution's net worth is determined by deducting the value of all of its outstanding liabilities from the total value of all of its financial and non-financial assets.
Start with what you already have: cash, savings, investments, real estate, cars, and anything else you could sell for cash. Subtract everything you owe after that, including credit card debt, house payments, student loans, auto loans, and other debts. then you suddenly have your net worth.
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