What am I worth!? No, I am not talking philosophically, I am talking mathematically. I figured this would be an interesting post because it is so easy to calculate and it is always good to know how you are doing financially.
An individual’s Net Worth is their current economic position. Basically all of the assets you own minus all of the liabilities on your head. Sounds simple enough right? Let’s jump right in. I’ll make it even simpler by giving you an example with MADE UP numbers.
Note: This is just an example. There may be other line items that I am missing. The idea is to have your assets subtracted by your liabilities.
Notice that I did not add Salary. This is because your Net Worth calculates what you already/currently have and not what you may have in the future.
If after calculating you end up with a negative number, don’t worry, it doesn’t mean you are worthless (you guys are all invaluable to me)! This usually means you may be young with a significant amount of student loans or perhaps you have a lot of credit card (or other forms of) debt. Over time, as you pay them down your net worth will increase.
You can usually find Net Worth calculators online where you can just fill in the blanks with your numbers.
Hope you enjoyed this post. Until next time…
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