What I find interesting is that many people pay attention to the wrong things in life. It really does not matter how many friends you have or how many likes you have. What matters most is the amount of money you have in the bank, how much your investments are worth, and how deep into your pockets do your bills cut.
It appears that the young people today have lost focus on what is of real value. All the likes, friends and love in the world will not give you financial freedom. That only comes from building your financial wealth and gaining a clear understanding of Net Worth.
Net Worth as defined by Wikipedia:
Net worth in business is generally based on the value of all assets and liabilities at the carrying value which is the value as expressed on the financial statements. To the extent items on the balance sheet do not express their true (market) value, the net worth will also be inaccurate. On reading the balance sheet, if the accumulated losses exceed the shareholder’s equity, it is a negative value for net worth.
For a company, this is called shareholders’ preference and may be referred to as book value. Net worth is stated as at a particular year in time.
Because I love it when we make something simple hard to understand. I need to express everything like I am talking to a 6-year-old.
Add up the value of all items you have in stock, add up all projected income, (adding a comparable value to everything that you are not selling) add in all investment income, subtract your total bills, and that’s your business net worth.
For individuals net worth or wealth, refers to an individual’s net economic position; similarly, it uses the value of all assets (long term assets) minus the value of all liabilities.
add up everything you own, subtract all bills…that’s what you are worth today!
To help you in figuring out right where you stand I am giving you a way for you to keep track and gage your own personal net worth. It’s called, “The Net Worth Calculator“.