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Your net worth is something that you should always be aware of, whether you& #39;re scared to calculate it or not 
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Let& #39;s break that down today:
#FinanciallyFluentThread #NetWorth
Let& #39;s break that down today:
#FinanciallyFluentThread #NetWorth
Your net worth is the value of the assets you own minus the liabilities you owe
Assets - Liabilities = Net Worth
If you forget what an asset is or what a liability is, let me remind youhttps://abs.twimg.com/emoji/v2/... draggable="false" alt="đđŸ" title="RĂŒckhand Zeigefinger nach unten (durchschnittlich dunkler Hautton)" aria-label="Emoji: RĂŒckhand Zeigefinger nach unten (durchschnittlich dunkler Hautton)">
Assets - Liabilities = Net Worth
If you forget what an asset is or what a liability is, let me remind you
Asset:
Anything you own that has a monetary value or constantly puts money in your pocket.
Liability:
Anything that you owe. If it takes money out of your pocket, consider it a liability.
Anything you own that has a monetary value or constantly puts money in your pocket.
Liability:
Anything that you owe. If it takes money out of your pocket, consider it a liability.
Examples of assets:
Checking/savings accounts, securities (stocks/bonds), real estate value
Examples of liabilities:
Loans (auto, mortgage, student), credit card debt
Checking/savings accounts, securities (stocks/bonds), real estate value
Examples of liabilities:
Loans (auto, mortgage, student), credit card debt
A positive net worth means that youâve kept your liabilities low & youâve saved/invested money the right way.
A negative net worth doesnât mean youâre failing though.
There& #39;s likely a shift in your mindset that needs to occur. It takes time to get over money mistakes. Patience.
A negative net worth doesnât mean youâre failing though.
There& #39;s likely a shift in your mindset that needs to occur. It takes time to get over money mistakes. Patience.
Letâs look at an example:
Assets:
Primary residence value = $200,000
Investment portfolio = $50,000
Checking/Savings account = $10,000
Liabilities:
Outstanding mortgage = $150,000
Student loans = $25,000
Credit card = $7,000
Auto loan = paid off
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Assets:
Primary residence value = $200,000
Investment portfolio = $50,000
Checking/Savings account = $10,000
Liabilities:
Outstanding mortgage = $150,000
Student loans = $25,000
Credit card = $7,000
Auto loan = paid off
Calculating...
{$200,000 + $125,000 + $10,000} - {$150,000 + $25,000 + $7,000} = $153,000
Youâd have a net worth of $153,000.
Continue on this path and youâre good to go.
{$200,000 + $125,000 + $10,000} - {$150,000 + $25,000 + $7,000} = $153,000
Youâd have a net worth of $153,000.
Continue on this path and youâre good to go.
There& #39;s a tool called Personal Capital that I& #39;m signing up for this week to start tracking my net worth there instead of a spreadsheet.
Continue to have a high savings rate. Continue to invest as much as possible in what you know / understand.
#FinanciallyFluent
Continue to have a high savings rate. Continue to invest as much as possible in what you know / understand.
#FinanciallyFluent
