Wealth and Net Worth, for all intents and purposes, are synonymous. In personal finance, it is the single most important metric to track. It is the yardstick by which we measure our progress.
Net worth is how much money would be left after everything you owned were sold and all debts were paid off.
Assets:
- personal bank accounts (checking, savings, money market)
- certificates of deposit
- stocks
- bonds
- mutual funds
- exchange traded funds
- real estate investments
- retirement accounts (IRAs, 401ks, 403bs, Keoghs, Profit Sharing Plans, and Pension Plans)
- business interests such as proprietorships, partnerships, or company stock in a company that is not publicly traded
- cash value of any life insurance that is not term insurance
- personal property such as cars and boats, jewelry, collectibles, and sporting goods
Liabilities:
- credit card debt
- car loans
- student loan
- home mortgage
- real estate loans
- business loans
Sounds simple? It is. But ask 100 people you know if they have calculated theirs and you would be astounded at how few have actually done so. I believe this is something that needs to be addressed.
Have you calculated yours? If so, how up to date is it?
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