What is net worth:
Net worth is the total value of your financial assets minus your liabilities, or debts. Net worth equals what you own minus what you owe. Networth is a way to measure a person’s or a company’s financial worth. Networth can also be used as tracking financial progress by comparing annual statements year over year.
What are assets and liabilities:
Assets are investments, bank accounts, brokerage accounts, retirement funds, real estate, and personal items. Liabilities are debts, such as loans, mortgages, credit card debt, medical bills, and student loans. The value of your net worth is the value of new worth.
How often should you count your net worth:
There isn’t a certain time or year to count your net worth. There are people who calculate their net worth yearly but counting your net worth monthly could make your life easier than counting it yearly. Calculating your net worth every month will get easier and easier the more you do it.
Why is net worth important?
Net worth can help you recognize the areas where you spend too much money, and you would know where you want to spend your money in the future. Knowing net worth can help you see the bigger picture when you are buying a car, house, or maybe even stocks. Tracking your net worth overtime can help you with financial stability.
Building your wealth is by growing your assets faster than your liabilities. Lowering your debts can help so much with net worth. The money you saved up you can invest it or maybe put it into your savings account.
Written By Anna li