NET WORTH VS. LIQUID NET WORTH HOW TO
The difference between the total value of your assets and liabilities is your net worth. Updated JUnderstanding how to assess financial standing is a useful tool for individuals and financial professionals alike. Your liabilities, on the other hand, represent your debts, such as loans, mortgages, credit card debt, medical bills, and student loans. Intangibles such as your personal network are sometimes considered assets as well. Examples include investments, bank and brokerage accounts, retirement funds, real estate and personal property (vehicles, jewelry, and collectibles)-and, of course, cash itself. Your assets are anything of value that you own that can be converted into cash.
By knowing where you stand financially, you will be more mindful of your spending, better prepared to make sound financial decisions, and more likely to achieve your short-term and long-term financial goals.Your net worth will fluctuate, however, it is not the day-to-day value but the overall trend that matters as you age, your net worth ideally should grow.Regardless of your financial situation, knowing your net worth can help you evaluate your current financial status and plan for the future.Liabilities include your mortgage, loans, credit card debt, student loans, and any other debt.Assets include investments, bank accounts, brokerage accounts, retirement funds, real estate, and personal items like your car or jewelry.Your net worth is the amount by which your assets exceed your liabilities, or what you have versus what you need to pay off.
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