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Net worth represents the total value of an individual’s or entity’s assets minus their liabilities. It provides a comprehensive snapshot of financial health, indicating what someone owns compared to what they owe. For instance, if a person possesses a house valued at $500,000 and has $100,000 in savings, but carries a $300,000 mortgage and $20,000 in credit card debt, their net worth would be calculated as ($500,000 + $100,000) – ($300,000 + $20,000), resulting in …