Definition
The total value of your assets minus your liabilities, providing a snapshot of your overall financial health.
What to consider
- Calculate it regularly to track your financial progress.
- Focus on increasing assets and reducing liabilities.
- Use it as a benchmark for long-term financial goals.
Real world scenarios
- Jan updates her net worth statement every six months, celebrating progress each time her debts shrink or investments rise.
- When Ashton pays off his car loan, he sees an immediate boost in net worth because liabilities decrease.
- A growing net worth motivates Trina to keep building an emergency fund and maintain consistent savings habits.
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