A net worth statement is a financial statement used to list an individual’s or family’s assets and liabilities. Assets are valuables owned by a person, while liabilities are monies owed by a person.
The Net Worth Equation
Net worth is calculated by subtracting total liabilities from total assets.
Net Worth = Assets – Liabilities
If you liabilities are greater than your assets, you are considered to have a Deficit Net Worth.
Deficit Net Worth: Liabilities > Assets
Why are net worth statements important?
Net worth statements gives you a holistic view of where you stand financially. You will be able to see how much your investments have grown and how much insurance coverage you currently hold. Also, if you have made the commitment to repay your debts by a specific period of time, you will be able to ascertain if it has been accomplished by…
View original post 271 more words