Personal Financial Literacy

Front

What is net worth?

Back

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

Front

If a person has a positive net worth, what does it mean?

Back

It means that their assets are greater than their liabilities.

Front

What are assets?

Back

Assets are anything of value that you own, such as cash, property, and investments.

Front

What are liabilities?

Back

Liabilities are debts or obligations that you owe to others, such as loans and bills.

Front

How do you calculate net worth?

Back

Net worth is calculated by subtracting total liabilities from total assets.

Front

What is an example of a liability?

Back

A mortgage on a house is an example of a liability.

Front

What is an example of an asset?

Back

A savings account is an example of an asset.

Front

If Vickie makes $40,000 annually and pays 20% in income tax, how much tax does she pay?

Back

Vickie pays $8,000 in income tax.

Front

What does it mean to have a negative net worth?

Back

It means that your liabilities are greater than your assets.

Front

What is the formula for calculating income tax?

Back

Income tax = Annual income x Tax rate.