Net worth starts with the value of your assets that could be referred to as your net worth. It subtracts the various liabilities from those assets. Common liabilities include personal loans, student loans, auto loans, credit card balances, mortgages for homes and tax due taxes.
When such items are subtracted from your assets, they reveal a clearer picture of your financial situation. If you own your home, you might have a substantial net value since it's an asset you're able to use and not be liable for an obligation to pay for a mortgage. On the other hand when you're paying for a mortgage with a high interest rate, you have to subtract that debt from the value of your home, which will reduce your net worth. https://s3.amazonaws.com/net5/4/net-worth.html
