How Much Are You Worth ?

Just calculate your net worth! Your net worth means your actual wealth or net assets. It can be taken as the amount of money remaining after all the assets are sold and all liabilities are fully paid-up. If your net worth is less than zero, your family is in financial danger. Constant checks against this value will give a pretty good picture of your financial health.

                                        

One of the ways some people become rich was by increasing and multiplying their net worth. The basic idea here is to accumulate assets (like property) and reduce liabilities (like loans).

So what are assets?
Assets are things that you own, including cash in hand, bank savings, fixed deposits, shares, unit trusts, cars, property, EPF contributions, etc.
Here is a twist... Your house or car does not fully belong to you until you have settled repaying the loan.

What are liabilities?
Liabilities are monies owned by you to others, in other words, your debts. If your house is purchased using a bank loan, then the amount of the loan becomes your liability. When you charged a purchase to your credit card and the amount is not fully paid-up, then you have incurred a liability. Where you stand as of today in terms of your financial health is indicated by your net worth: 

  NET WORTH = ASSETS - LIABILITIES  

Your net worth can change through time. If you have just started out in your career, your net worth will probably be small due to commitments to a car or study loan.

As you grow older, having repaid your commitments and accumulated more assets, like your house, your net  worth will increase substantially. Many years later when your children need money for their university, some assets may be disposed off to fund their education, thereby reducing your net worth. So, calculate your price today to avoid experiencing poor financial health in future. 

-SMART START