Net Worth 1

Net worth is the difference between what you own (assets) and what you owe (liabilities).

Assets are items of value that you own, such as cash, property, and investments.

Liabilities are debts or obligations that you owe to others, such as loans and credit card balances.

Net worth = Total Assets - Total Liabilities.

Examples of assets include cash, real estate, vehicles, and furniture.

Examples of liabilities include mortgages, car loans, and credit card debt.

Paying off debts reduces liabilities, which increases net worth.

A low-interest loan can help finance assets, but it still adds to liabilities.

Your net worth is $30,000.

Furniture is considered an asset and contributes to your total net worth.