How to Calculate Your Net Worth
In Three Simple Steps
What’s your net worth? Do you know it? You probably don’t and that’s totally fine. But you’re curious now, aren’t you?
Calculating your personal net worth is pretty simple. Here’s the formula:
Your Net worth = Your Assets — Your Liabilities
Assets are everything you own e.g. stocks, property, land, fixed deposits, investments on Pettysave etc. These are good. On the other hand, liabilities are everything you owe e.g. mortgage, car or student loans, general debt, etc. These are not so good.
So, here are a three simple steps to take to find out your personal net worth:
- Get a sheet of paper and draw a straight line.
- On the left, write down all your assets and on the right, write down all your liabilities.
- Now, try to balance the two columns out and find out the difference. Simply put, subtract the financial value of your liabilities from the financial value of your assets. If your assets are more than your liability, the difference is your net worth. If your liabilities are more than your assets, the difference is still your net worth, regardless of if it is a negative figure.
Whatever your current net worth, where you are now is a good starting point to commit to growth. Do not feel ashamed; feel motivated. You can commit to calculating your net worth periodically e.g. every 3 or 6 months or every year. This way, you can compare where you were before with where you currently are and determine how much growth (or decline) you made. This will help keep you accountable and progressive.
Jeff Bezos has a net worth of over $146 billion and Bill Gates has a net worth of over $107 billion. So how on earth did they achieve these? To put it plainly, they kept their liabilities to the barest minimum and buffed up their assets.
Want to grow your assets simply and stress free? You can get started with Pettysave here.
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Oyin from Pettysave