Why it helps
Net worth gives you a cleaner snapshot than looking at one bank account or one debt in isolation.
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Understanding Net Worth
Net worth is simply what you own minus what you owe. It is a useful planning baseline because it helps you see your current position before you model bigger future goals.
Why it is not everything
A strong plan still needs income, savings rate, spending, and time horizon. Net worth is a starting point, not the full strategy.
What to include
Common categories include cash, investments, home equity, loans, credit balances, and other debts.
What to do next
Once you know your current position, you can move into FIRE planning, retirement planning, or account strategy decisions with more context.