Calculating Net Worth

Front

What is net worth?

Back

Net worth is the difference between what you own (assets) and what you owe (liabilities).

Front

How do you calculate net worth?

Back

Net worth is calculated using the formula: Assets - Liabilities.

Front

What are assets?

Back

Assets are things that you own that have value, such as cash, property, and investments.

Front

What are liabilities?

Back

Liabilities are things that you owe, such as loans, mortgages, and credit card debt.

Front

If your assets are $50,000 and your liabilities are $20,000, what is your net worth?

Back

$30,000

Front

Which of the following is the formula to calculate net worth?

Back

Assets - Liabilities

Front

If your assets and liabilities both increase by the same amount, what happens to your net worth?

Back

Stays the same

Front

If your liabilities increase and your assets stay the same, what happens to your net worth?

Back

Decreases

Front

What happens to your net worth if you pay off a liability?

Back

Your net worth increases.

Front

What happens to your net worth if you acquire a new asset?

Back

Your net worth may increase, depending on the value of the asset compared to any liabilities.