Net worth: What it is and how to calculate it
Your net worth is a figure that gives you a general idea of your overall financial standing. You find your net worth by subtracting your total liabilities from your total assets. Liabilities are essentially debts; they include mortgages, loans (student, car, business, etc.), and credit card balances. Assets include the current value of your investments, life insurance, bank accounts, how much cash you have in your pockets, and your personal property (we're talking big stuff here, i.e. cars, real estate, etc.). Some assets are wealth-building because they're value increases over time (or earns an income of some sort). Examples of wealth-building assets are interest-bearing accounts, IRAs, stocks and bonds, and real estate. Other assets like automobiles, big-screen TVs, your new MacBook Pro (Oh, how I envy you...) are not wealth-building because they actually decrease in value over time.

To calculate your net worth, make a balance sheet with two columns and list your assets in one and your liabilities in the other; then subtract the total liability from the total assets, et voila!, your net worth. Don't worry if it's negative; in fact, it probably will be, if you're like me and don't own a car or house but do have unpaid student loans.Financial advisers recommend that you keep this "net worth statement" and update it annually, so that you can see your progress in a nutshell.