July 6, 2020

Is the net worth yearly or for the whole life?

Neither, it’s at this moment in time.

Of course you could also look at someone’s net worth in the past 12 months or in the past decade, but, when people in the news say “Jeff Bezos’ net worth is currently at X” they mean that based on his assets, investments and the value of his shares of Amazon at the current share price, he owns X (X being everything he has minus everything owed).

Naturally that can change a lot for people who own publicly listed companies but, for most people, it remains pretty much unchanged. You have your car, your house, a steady pay check, recurring bills for eduction, insurance, daily life, some cash saved in the bank and hopefully some investments. That tends to stay relatively constant.

Net worth is a measurement of gross assets – liabilities at any single point in time. Net worth changes daily as money flows in and out of bank accounts, retirement savings and as property values swing.

Net worth is fluid and constantly changing.

Whatever you might be worth now is probably your net worth, any amount of assets that you have without liabilities. If you have 100k in assets that’s your net worth, or if you owe creditors 500k then you have a negative net worth of 500k.

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