Originally published Sunday, December 10, 2006 at 12:00 AM
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Net worth simple to calculate, not so simple to grow
For individuals, net worth is the total value of everything they own, minus the value of everything they owe. The calculation is simple...
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For individuals, net worth is the total value of everything they own, minus the value of everything they owe.
The calculation is simple:
Add up the value of a home, assets such as stocks, bonds and bank accounts, then subtract all debts, including mortgage balances and credit accounts.
An individual investor looking to qualify for certain high-risk investments — such as buying into a hedge fund — may need to have a net worth exceeding a certain level for the brokerage or advisory firm to allow the transaction.
For a corporation, net worth is the amount by which assets exceed liability.
It is also know as stockholders' equity or net assets.
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