The formula, in plain language
Net worth = Total assets − Total liabilities
It's the simplest possible measure of financial position: everything you own, minus everything you owe. There's no rate or time period involved — just a snapshot as of today.
Why track it over time
A single net worth number matters less than its trend. Recalculating every few months (using the same categories each time) shows whether you're building wealth, paying down debt, or both — which is usually more useful than obsessing over any one snapshot.