Add up everything you own, subtract everything you owe, and see your financial picture.
Net worth is the simplest and most important measure of your overall financial health. It equals everything you own (assets) minus everything you owe (liabilities). A positive net worth means your assets exceed your debts. A negative net worth means you owe more than you own, which is common for young adults with student loans.
According to the Federal Reserve's Survey of Consumer Finances, the median U.S. net worth by age group is: Under 35: $39,000. Ages 35-44: $135,000. Ages 45-54: $247,000. Ages 55-64: $364,000. Ages 65-74: $410,000. Ages 75+: $335,000. These are medians, meaning half of households are above and half below. Averages are much higher due to extreme wealth at the top.
Your home is your largest asset, but it is not liquid. You cannot easily convert it to cash without selling. Some financial planners recommend tracking both your total net worth (including home equity) and your "liquid net worth" (excluding home equity) to get a clearer picture of accessible wealth. Your liquid net worth is what you could actually use in an emergency or for major purchases.
Net worth grows through two mechanisms: increasing assets (saving, investing, property appreciation) and decreasing liabilities (paying down debt). The most effective strategy is usually a combination: maximize your savings rate, invest consistently in diversified index funds, pay off high-interest debt aggressively, and avoid taking on new consumer debt.