Your net worth is the difference between the totals of your assets and liabilities. In other words, if you sold all your assets for the values stated and paid off all your debts, the amount left over would be your net worth. Your net worth should not be thought of as cash to be spent. Rather, it is a measure of a person’s financial position as of the date of the personal balance sheet. Can your net worth be a negative number? Yes, this is possible. If you have more debt than total assets, you are technically insolvent. A continuation of this position may make it difficult for you to pay off all your debts on a timely basis, which could necessitate a declaration of bankruptcy.
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