Understanding Net Worth
net weight = gross weight - package weight
Net Worth = Assets - Liabilities
Net Worth = value of owned items - how much you owe
Assets
- bank accounts
- mutual fund accounts
- 401(k) or 403(b)
- retirement accounts
- home (minus what you owe)
Increase this part of the equation by: (a) Saving more; (b) Spending less; (c) Earning more
Liabilities
- student loans
- car loans
- home loans (mortgage) - see last item in Assets
- personal loans
- credit card debt
Decrease this part of the equation by: (a) Paying down loan(s); (b) Increasing payment sizes or make extra payments; (c) Refinance loan(s); (d) Don't take on new loans
Goals for Net Worth
- Move from negative to positive net worth
- Increase your net worth by increasing your assets and simultaneously reducing your liabilities
- Live and Share
Last updated: 2023-03-27