To calculate your net worth:
\[ NW = TAV - TLV \]
Where:
Net worth is the total value of an individual based on the difference between their total asset value and their total liability. It provides a snapshot of financial health by showing what is owned versus what is owed. A positive net worth indicates that assets exceed liabilities, while a negative net worth indicates liabilities exceed assets.
Let's assume the following values:
Using the formula:
\[ NW = 50{,}000 - 20{,}000 = 30{,}000 \]
The net worth is $30,000.
Let's assume the following values:
Using the formula:
\[ NW = 80{,}000 - 90{,}000 = -10{,}000 \]
The net worth is -$10,000.
