What is your personal net worth? This is just another way to measure your financial health and ask yourself, ‘How much do I own compared to what I owe?’ ‘Can I afford to make these financial choices?’
To understand net worth, you need to know basic terms like assets and liabilities, as well as different types of statements such as the personal balance sheet statement and cash flow statement. These are financial tools that help you assess your net worth.
In this lesson, you will learn the meaning of basic terms and how to measure net worth, understand the importance of knowing your personal net worth and the impact of having positive or negative net worth, how to improve your net worth, as well as -surprise! – situations where having a high net worth is not a guarantee of good financial health.
Once you understand your net worth, you can use different strategies to strengthen your financial health further.