 TITLE: What Is Net Worth? CONTENT: Understanding Net Worth\n-----------------------\nYour net worth is a calculation that gives you a snapshot of where your finances stand at any given time. It essentially tells you how much you'd have if you sold everything you own. Doesn't sound practical? It's true that you're probably not going to sell off all your assets—but knowing what your net worth is can give you an idea about your financial health over time. That's because as you make sound financial decisions, your net worth ideally will increase. The flipside is true as well: If you increasingly get into debt as you get older, your net worth could plunge, leaving you in dire straits as you near retirement.\nTo understand net worth, you need to know what qualifies as an asset or a liability.\nYour assets include the money in your checking, savings and retirement accounts as well as items such as your home and car that you may sell for cash. They also include the cash value of life insurance policies (though not term life insurance), personal items such as jewelry and art, and the value of investment accounts you hold.\nYour liabilities are debts, or any amounts owed on a mortgage, car loan, credit card accounts, student loans, personal loans and the like. While your assets increase your net worth, your liabilities decrease it. END