Definition

Net worth is the total value of your assets — cash, investments, home equity, retirement accounts — minus your total liabilities such as mortgages, student loans, and credit-card balances. It is the single clearest snapshot of financial health, and tracking it over time matters far more than any single month's number.

1. Liquidity

   How quickly an asset can be turned into cash without losing value.
2. Home Equity

   The portion of your home you truly own — its value minus what you still owe.
3. Compound Interest

   Earning returns on both your original money and on the returns it has already produced.