What is the difference between net worth and assets?

Assets are everything you own that has resale value: cash, savings, investments, retirement accounts, your home, your car. Net worth is your assets minus your debts. The formula is one line: net worth = total assets − total liabilities.

Debt hides inside assets. A family with a $340,000 house and a $300,000 mortgage has $340,000 of assets but only $40,000 of net worth from the house. Someone with a $60,000 car on a $55,000 loan looks richer on an asset list than they are.

Take the example on our homepage: $418,000 in assets and $299,500 in debts gives a net worth of $118,500. Same assets with no debt would be $418,000.

So when someone asks what you’re worth, they mean net worth. The net worth calculator keeps the two lists side by side and does the subtraction for you.