Net worth is assets minus liabilities. Assets are what you own: bank balances, investments, retirement accounts, home equity, vested stock, a car. Liabilities are what you owe: mortgage, student loans, car loan, credit card balances. Subtract the second from the first and you have one number. It can be negative, and for many people early in a career it is.
The value is in the trend, not the level. A net worth of $40,000 that was $15,000 a year ago says the plan is working. A net worth of $400,000 that was $450,000 a year ago says something changed. Checking it monthly or quarterly turns a vague sense of progress into a fact.
Example: $25,000 in savings, $90,000 in a 401(k), $30,000 of vested company stock, and a $28,000 car, against $45,000 of student loans and $18,000 of car loan. Assets total $173,000, liabilities $63,000, net worth $110,000.
A few conventions help. Count unvested RSUs at zero; they are not yours yet. Count a home at a conservative estimate and the car at what it would sell for, not what it cost. Count retirement accounts at full value, understanding that traditional balances carry a future tax bill.
The common mistake is watching the total while ignoring its shape. $110,000 that is 80% retirement accounts and employer stock is a different situation from $110,000 that is 40% cash, which is why liquid net worth is worth tracking alongside it.