Net worth is a simple but powerful snapshot of your overall financial position at a given point in time, calculated by adding up everything you own (your assets — cash, investments, property, gold, and so on) and subtracting everything you owe (your liabilities — loans, credit card dues, and other debts). What's left over is your net worth.
Tracking your net worth once or twice a year, rather than obsessing over daily market movements, is one of the most useful habits for understanding whether you're genuinely making financial progress over time. A rising net worth generally means you're either saving more than you spend, your investments are growing, you're paying down debt, or some combination of all three — while a stagnant or falling net worth is a useful early warning sign worth investigating.