Do you know what's networth?
Well, networth is delta between your assets and liabilities.
Do you know what's your networth?
Well if not, then that's the question you should be answering in the first place even before you get into any other personal finance topics. This gives you a reference point in your financial life, where you stand. If you don't know that, there's no point knowing the destination you want to arrive, right?
What are the typical things that you would count as your assets and liabilities ?
Well, before i put down the sample matrix for your assests and liabilites, would like to point out the ultimate rule that you should follow: "Always make conservative estimates of your assets and Generous estimate of your liabilities", beleive me this will go long way.
Now, here are the typical Assets & Liabilities
(have put some sample data, don't worry that's not mine :))
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| Networth equals assets minus liabilities |
Prepare an above mentioned matrix and this will help you get your networth. Also, you may further classify this what are your assets based on liquidity potential, for instance properties and land holdings are most illiquid assets and bank balance is most liquid.
If you are wondering, the networth of the fictious person above is
| 27,797,000 |