Net Worth
Quick Definition
The total value of your assets minus all your liabilities.
Full Explanation
Net worth is the fundamental measure of personal financial health: the total market value of everything you own (assets) minus everything you owe (liabilities). Assets include savings, investments, property value, and vehicles. Liabilities include mortgages, car loans, credit card balances, student loans, and other debts. A positive net worth means assets exceed debts. The average Canadian household net worth is approximately $530,000 (Statistics Canada, 2023), heavily influenced by real estate. Tracking net worth over time is more meaningful than looking at income alone.
Related Terms
Home Equity
The portion of your home's value you actually own, free of mortgage debt.
RRSP (Registered Retirement Savings Plan)
A tax-deferred savings account for retirement, with deductible contributions.
TFSA (Tax-Free Savings Account)
A flexible registered account where investment growth and withdrawals are completely tax-free.
Debt-to-Income Ratio (DTI)
The percentage of your gross income that goes toward debt payments.
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