Net worth is the total value of everything you own (assets) minus everything you owe (liabilities). It is the single most important measure of financial health — more meaningful than income alone, as two people with the same salary can have very different net worths depending on their spending and saving habits.
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Pro Tip
Pension wealth is often the most underappreciated component of net worth. A defined benefit pension promising £20,000/year in retirement has a capital value of approximately £400,000–£500,000.
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