What exactly does NET WORTH mean? Does it mean what someone's Annual Salary is, OR Does it mean how much money that they have in the bank?


Best Answer

No, it does not mean either of those things.It means the total of everything they own (stocks, bonds, money in the bank, etc.) minus everything they owe (mortgage, credit card balances, student loans, etc.)


assets - liabilities = net worth

All your assets minus all your debts = your net worth

Neither one. It's your assets (what you own) minus your liabilities (what you owe). Salary does not enter into the equation, but a bank account does.

Neither.The value of everything they own minus what they owe.

Net worth is the value of all assets minus the total of all debts.Money in the bank is an asset. Salary is not, by itself, an asset.

All assets minus any debts.

Net Worth = Total Assets less Total Liabilities

Total Assets = Everything someone owns including, but not limited to, cash in the bank

Total Liabilities = Everything someone owes.

Net Worth is a persons combined total worth! This would include savings, IRAs, vehicles, property, etc.

It means how much are they worth, after deducting all debts, including but not limited to taxes.

If you had a car loan, and say the car was worth $10K, but you still owed $5K on the loan, your net value of what part of it you own would be $5K.