The Net Worth Snapshot

Think of your money as a bath. Pay is the tap, spending is the drain, and your net worth is the water level on the day you look. It’s everything you own, your assets (cash, savings, investments, pensions, the value of a home or car), minus everything you owe, your liabilities (mortgage, loans, card balances, bills already due).

A fast tap doesn’t mean a full bath. Someone on a big salary who spends it all, with debts on top, can be worth less than someone on a modest wage with a little saved. Net worth is a level measured on a date; income and spending are flows measured over time. You need both views, and this lesson is about the first.