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Understanding Net Worth

Your net worth is the single most important number for understanding your financial health.

What Is Net Worth?​

It's simple:

Net Worth = What You Own − What You Owe

What you own (Assets):

  • Bank account balances
  • Investment accounts
  • Retirement savings (401k, IRA)
  • Home equity
  • Car value
  • Crypto
  • Other valuables

What you owe (Liabilities):

  • Credit card debt
  • Mortgage balance
  • Car loan
  • Student loans
  • Personal loans
  • Any other debts

Why It Matters​

It's the Real Score​

Income is great, but it doesn't tell the whole story. Someone making $200k with $300k in debt is worse off than someone making $60k with $100k saved. Net worth shows reality.

It's the Goal​

Building wealth means increasing your net worth over time. Every financial decision either helps or hurts this number.

It's Motivating​

Watching your net worth grow — even slowly — is incredibly satisfying. It proves your hard work is paying off.

A Simple Example​

Sarah's finances:

  • Checking: $2,000
  • Savings: $5,000
  • 401k: $15,000
  • Car value: $8,000

Total assets: $30,000

  • Credit card: $3,000
  • Car loan: $5,000
  • Student loans: $20,000

Total debt: $28,000

Sarah's net worth: $30,000 − $28,000 = $2,000

Sarah's net worth is positive! Even with $28k in debt, she's technically "in the black."

What's a "Good" Net Worth?​

There's no universal answer. It depends on:

  • Your age
  • Your income
  • Where you live
  • Your goals

General benchmarks by age:

  • 25: Around $10,000
  • 30: Around 1x annual salary
  • 40: Around 2-3x annual salary
  • 50: Around 4-6x annual salary
  • 65: Around 10x+ annual salary

These are rough guides, not rules. Everyone's path is different.

Negative Net Worth​

If you owe more than you own, your net worth is negative. This is common when you're:

  • Young and starting out
  • Paying off student loans
  • Recently bought a house

Don't panic. Negative net worth is a starting point, not a failure. The goal is to move it in the right direction.

How to Increase Net Worth​

Only two ways:

  1. Grow assets — Save more, invest, pay down your home
  2. Reduce liabilities — Pay off debt

Most people do both simultaneously.

Tracking in Ant Finance​

Your dashboard shows:

  • Current net worth — The big number at the top
  • Net worth over time — The trend chart
  • Assets breakdown — What you own, by account
  • Liabilities breakdown — What you owe

Watch that trend line go up! 📈

Tips​

Focus on Direction

Day-to-day changes don't matter much. Markets fluctuate, bills come and go. Look at the monthly and yearly trend instead.

Celebrate Milestones

Crossed into positive net worth? Hit $10k? $100k? Celebrate! These milestones deserve recognition.

Don't Compare to Others

Someone else's net worth is irrelevant to your journey. Compare yourself to where you were 6 months ago, not to strangers on the internet.