is something you own means assets minus debts. Basically assets are home, investments and cash or anything else valuable you own. While liabilities mean what you owe to those assets like mortgage, student loan and car loan etc.
Net worth measures once financial status because it is what you have left over if you sell all your assets to pay off your liabilities. Each of your financial moves must be aimed at to increase your net worth. It means either increase your asset or decrease your liability.
Net worth Calculation
Make list of your assets
It will include, retirement saving, current and saving account balance, any fixed deposit, stock value if you have, own house and automobiles. You can also other physical items which can be gold or diamond that depends on your wish.
Once you wrote asset on one side of the list, make the total out of it. Once you total it, you will get the total value of all assets.
Make list of your debts
Take a list out all your credit card balances, student loans, personal loans, home loans, auto loans and so forth. Same as asset list, write this all on other side of the paper.
Once you have listed all the debts, take the total of it also. This is the total of all your debts.
Take the assets subtotal and debt total, subtract debt from asset and result is net worth of yours.
If net worth is negative
Some people may get panic after calculating their net worth and find it negative. This happens usually with younger earning people who has amount of loans and loans that depreciate automobiles value. Your net worth is negative because you are not earning enough to overcome the weight of debt.