Simply put, your Net Worth is the amount by which your Assets exceed your Liabilities. This is an important financial metric for a number of reasons. First and foremost, it is a accurate snapshot of your financial health. Unlike other financial metrics which only focus on a specific slice of your financial situation, such as your income, the value of your investments, or your current bank account balance, Net Worth is a more holistic measurement that takes into account your full spectrum of your finances. Understanding this holistic snapshot can help you determine what changes, if any, you need to make to achieve your financial objectives.
Net Worth is also often used by lenders to determine whether or not to approve you for a loan. Based on this, if you are considering a loan, it is important to look at your Net Worth beforehand and make any necessary adjustments, or, at a minimum, be prepared to discuss where things currently stand.
VisualCalc’s Net Worth Calculator computes your Net Worth, showing you the total value of your Assets and Liabilities, and the difference between these two amounts (your Net Worth). The calculator also breaks the value of your Assets and Liabilities into summarized categories.
