Your net worth is a yardstick for your financial progress, and it’s more important than your income. The Simple Dollar explains how you can use this number to track and improve your finances.
Photo by 401(K) 2013
Your net worth is simply your assets (such as savings and investments) minus your liabilities (debts), but a better calculation uses “usable” assets — that is, don’t include your home or car market value unless you intend to sell now.
Once you’ve found this number, there are a many things you can learn from it, including deciding whether any move you make is a poor financial move (for example, loaning money to people who won’t repay you decreases your net worth); whether you’re truly progressing financially; and whether extra time you’re working is really paying off.
Check out the article below for some additio9nal calculations you should consider to track your progress.
The Most Important Number [The Simple Dollar]