I agree with an earlier post that asserted "net worth = assets - liabilities" but I'd like to do better at understanding what that really means.

Some are easy like the size of your bank balance. Others are much harder.

For example, one asset we have is our home and there are many websites out there that tell you how much it's worth but they each vary an awful lot and change dramatically - so much so sometimes that any savings you've made in the same period are eclipsed.

Similarly, the 401k I've been building up for years seems like a decent amount but trying to calculate what it's worth after taxes and therefore how much you'll have to spend each month seems unknowable.

I think the same is true of investment accounts. If we seeded one with $500 and it's now worth $250, it's easy to think your net worth has risen by $250 but it really hasn't when taxes, fees and who knows what else is taken into account.