What Net Worth Tells You
Net worth is everything you own minus everything you owe. On its own the number means little. Worked out once or twice a year, it shows whether you are moving forward: debts falling, savings and investments rising.
For many households in Singapore, most of net worth sits in the home and in CPF. Both are real wealth, but neither pays for a sudden bill. Liquid net worth strips them out, along with the home loan, to show what you could reach without selling your home.
The debt-to-asset ratio is the share of what you own that is financed by borrowing. It usually starts high when a home is bought and falls as the loan is repaid.