AGIRL-217 〒 .
### Introduction to the notion of "net worth"
Net worth is one of the most important concepts in personal finance in general. It is a measure of the value of a person or entity using what they possess vs. what they are indebted to. The difference between the two is the net worth. In this article, we will explore the concept of net worth, how to determine your own net worth, and why it is significant in personal finance.
### The nature of net worth
As we have already established, the most basic definition of net worth is: what one possesses minus what one is indebted to. This refers to assets and liabilities. Assets are what a person has that are of some value or something that has some value. It normally includes things like cash, an asset, stocks, money in a bank account, etc. Avs are things charged to an individual such as a loan, credit card, mortgage, etc. Notwithstanding, one will then calculate the net worth. Which is assets minus liabilities. This will produce the overall value of the person whatever the case.
### Why is net worth important?
The purpose of calculating net worth is to get a more accurate idea of somebody’s financial situation in a quantitative way. In other As we discussed above, net worth is a gauge that sums a person’s financial state in a way that might be useful. It allows you to see whether a person is paying off all their liabilities or they are in a state of debt. It's a significant factor to consider when a person is applying for credit or loan as it shows then that they can pay them back. It can give a person insight into where a person can improve their financial stability if they know more about their net worth. In this regard, it is a great job to look at such a figure, to make one more aware of the financial state overall that they are in. The idea is also that a person can try to improve their net worth over time.
### How to calculate net worth
The way one calculates net worth is as follows: one must first make a list of all their assets in their name. Such as money, something they own, total account, something they own that can be sold like a flat a bicycle, etc. List of a person can be, he wants to list his stuff such as cash possessions, properties, stocks, account balances, etc. Then one would have to factor in a list that details all the liabilities that one has. Such as mortgages, loans, credit card debt, etc. Once that’s done, one should subtract the total liabilities by the total assets, and this will give the person his or her net worth.
### What is a good net worth?
It’s very hard to decide whether one’s net worth is good or not because it varies for people all of the time. But an individual wants to work on one’s worth over time. Specifically improving one’s net worth upward over a lifetime in whole is something that is valuable and will often mean a person is more financially comfortable. A person could also improve their financial situation since it will help an individual achieve more financial security in the future. It’s something to make an effort with.
In summary, the key aspect to compact is what you have is the discrepancy between what you own and what you owe. Net worth is a critical topic for you to try and recognize in the general subject of personal finance. It’s a useful thing to know for you to improve on since it’s a good indicator of just how limited someone is in terms of their ability to save up money for things, or a financial plan. Right now is a good idea to calculate your net worth and see what you can do to try to boost it so that you can be a bit more financially secure globally.
### Net worth vs. net income are two different things
Net worth as a concept, often get confused with net income, but they are two quite different things. Net worth is a measure of one’s assets added to what one is indebted to. While net income is the number of wages a person gets a month after all liabilities have been subtracted from their income. Net worth is not an important thing that one should pay attention to, but a fixed sort of equation. Net income should on the other hand be added to the value of assets to get a sense of a person’s financial stability, just as a person’s monthly net income can be added over time to show how much a person’s wealth has grown over time.
### A final summary
Net worth is a vital concept in personal finance in general. It is a measure of what a person has in the world of finance versus what they are indebted to, and the difference gives the ability to assess a person’s financial health. Net worth has thought that is something that matters to individuals to get a sense of their financial situation. Over time, it is also something that a person can observe and notice if it is improving or not. This is an interesting subject because it's a unique thing that you can enjoy watching grow as you become more successful in your financial situation. It’s a very important point to consider in personal finance.
## References
1. https://www.investopedia.com/terms/n/networth.asp
2. https://www.thebalance.com/net-worth-definition-how to calculate-your-net worth 4173734
3. https://www.investopedia.com/articles/personal finance/082529/nertenworth-facts-everyone-should-know.asp
4. https://www.moneyunder30.com/calculate-net-worth
5. https://www.thebalance.com/stock-networth 4173753
6. https://www.moneyunder30.com/calculate-net worth-and-development disasters considerations
7. https://www.investopedia.com/articles/personal finance/082529/net-net worth-facts-everyone-should-know.asp
8. https://www.thebalance.com/net-net worth 5223081
9. https://www.businessinsider.com/what-is-net worth definition 2014-8
10. https://www.moneyunder30.com/calculate-net worth 1538039
2014年8月5日
英語字幕
中国語字幕
日本語字幕
フランス語字幕
