Net worth

What is the significance of knowing your net worth?

• It helps you understand your financial position and make informed decisions about spending, saving, and investing.

• It allows you to calculate your monthly expenses more accurately.

• It provides a way to compare your wealth with others in your social circle.

• It is only important for wealthy individuals.

How do you calculate net worth?

• Net worth = Total Assets + Total Liabilities.

• Net worth = Total Assets - Total Expenses.

• Net worth = Total Assets - Total Liabilities.

• Net worth = Total Income - Total Expenses.

What are liabilities?

• Financial assets owned by an individual or company.

• Financial obligations or debts that an individual or company owes to others, such as loans and credit card debt.

• Investments made by an individual or company to generate income.

• Cash reserves held by an individual or company for future expenses.

What is the net worth of someone with $15,000 in assets and $10,000 in liabilities?

• $2,000

• $3,000

• $5,000

• $10,000

What is net worth?

• The total amount of money a person has in cash.

• The difference between a person's total assets and total liabilities.

• The total income a person earns in a year.

• The value of a person's investments only.

Which of the following is an example of an asset: savings, credit card debt, or student loan?

• Savings

• Credit card debt

• Student loan

• Mortgage

If assets are $50,000 and liabilities are $30,000, what is the net worth?

• $10,000

• $15,000

• $20,000

• $25,000

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

• $30,000

• $20,000

• -$30,000

• $50,000

What does a negative net worth indicate?

• It indicates that assets exceed liabilities, meaning the individual is financially stable.

• It indicates that liabilities exceed assets, meaning the individual or entity is in debt.

• It indicates that the individual has no debts and is financially secure.

• It indicates that the individual has a positive cash flow and is making profits.

What is an example of a liability?

• A loan or credit card debt is an example of a liability.

• A savings account balance is an example of a liability.

• An investment in stocks is an example of a liability.

• A piece of real estate owned is an example of a liability.