Your net worth is kind of like a scorecard of your financial progress. Seeing that number march steadily higher over your life should assure you that you're on the right track.

Your net worth is calculated by adding up all of your assets -- cash savings, investments, home value, and other property -- and subtracting your liabilities -- your mortgage balance, student loans, credit card debt, and any other money you might owe.

For someone right out of college with lots of student loan debt and practically no savings, it may feel like an impossible challenge just to get your net worth back to $0. Meanwhile, someone approaching retirement age may wonder if they're truly wealthy enough to quit working. Comparing your net worth to the average person in your age group may reassure you about your situation or motivate you to catch up to or exceed your peers.

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Source Fool.com