Are You Netting “Net Worth?”


Here at Finance Opinion, our goal is to help arm our readers with financial information that, unless you work in the industry, you may not otherwise know. Afterall, finance can be daunting, filled with terms that are kind of confusing – “balance sheet,” “financial gains,” “gross profit,” – you get the idea. If you feel like you need a set of flashcards everytime a new term comes up, you’re not alone. But thankfully, you’ve come to the right place.

Which brings us to today’s topic: net worth. Don’t worry if you have no idea what the term means, let alone how to measure your own net worth. Our team of experts did the research for you – and even compiled a few tips to help you grow your net worth – so you’ll be a net worth now-it-all in no time. 

Now let’s get into it!

What is Net Worth?

If you’re like the majority of Americans that get stumbled up on the term “net worth,” it helps to break it down into the simplest terms: net worth is what you own minus what you owe.

Net worth tallies up the total of all of a person or business’ assets, including a home, cars, investments, savings, and so on, and subtracts any debts or liabilities. These debts or liabilities include everything from credit cards to student loans, and the remaining balance due on a mortgage. 

To determine your own net worth, start by adding all of your assets (what you own) together. Next, compile all of your debts. Now subtract your debts from your assets – the final number you’re left with is your personal “net worth.” 

What if Your Net Worth is Negative?

If you’re left with a negative net worth, this means you owe more than you own, and that’s not always a bad thing. 

For example, most post-grads have a negative net worth until they’re able to pay off the majority of their student loans. And, because higher education is an investment in your future, having a negative net worth can pay you back down the road with a higher paying career. 

However, if you’re further along in life and are riddled with credit card debt that exceeds your overall assets, negative net worth isn’t viewed as positive, as in the case of a recent grad. But don’t fear! There are a few strategies you can put in place today to increase your net worth and get back on track. 

Three Ways to Increase Your Net Worth

Pay off Credit Card Debt

We know – easier said than done. However, paying down your credit card debt is essential when it comes to increasing your net worth. Afterall, you can’t grow your worth without first decreasing your debts.

To help you tackle your debt faster, leverage a payoff strategy, such as the avalanche or snowball method, and stick to it. Consistency will get you closer to your goal, and every bit you pay off only increases your net worth

Increase Your Passive Income

How much would you be earning today if you weren’t working? Passive income – that is, earnings received from income sources where a person does not need to be actively involved – is a great way to boost up your overall assets, thus increasing your net worth.

From rental properties and dividend stocks, to even selling eBooks online, check out our top tips for generating passive income that you can start today to grow your net worth.

Contribute Toward a Retirement Savings

We talk about retirement a lot here at Finance Opinion, so we don’t want to sound like a broken record. But retirement planning is a critical piece of building up your future net worth.

By contributing to a retirement plan, whether a 401(k) or Roth IRA, you’re investing in your future financial health, and growing your overall assets. Whatsmore, when you take advantage of programs like employer-matching, you can grow your savings even faster, accruing more toward your retirement and overall net worth. 

Whether you have positive or negative net worth, the good news is that there are always ways to increase it. With a few strategies and consistency in place, you’ll be well on your way to growing your net worth. Now that’s a future we can all look forward to! 


The opinions expressed in this post are for informational purposes only. To determine the best financing for your personal circumstances and goals, we advise you to consult with a licensed advisor.

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