You've probably heard people talk about the net worth of a tech billionaire or famous actor, but what does it really mean? A person's net worth is everything they own, minus everything they owe to other people.
A person's net worth is calculated by adding up what a person owns (their assets) and subtracting everything that they owe to others (their liabilities). For example, if someone owns a home worth $300,000, has savings of $50,000, and owes $100,000 in loans, their net worth is $250,000. Net worths are often used to compare the fortunes of celebrities and companies, but they are also used to set personal financial goals.