Net Worth

Front

What is considered an asset in personal finance?

Back

An asset is anything of value or a resource owned by an individual, such as a savings account, real estate, or investments.

Front

What is considered a liability in personal finance?

Back

A liability is a financial obligation or debt that an individual owes to another party, such as a mortgage, car loan, or credit card debt.

Front

How is a person's net worth defined?

Back

Net worth is defined as the difference between a person's total assets and total liabilities.

Front

How do you calculate net worth?

Back

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

Front

What are assets best described as?

Back

Assets are best described as monetary resources or properties that you own.

Front

What is the formula for calculating net worth?

Back

Net Worth = Total Assets - Total Liabilities.

Front

Can you give an example of an asset?

Back

An example of an asset is a savings account, stocks, or a house.

Front

Can you give an example of a liability?

Back

An example of a liability is a mortgage, student loan, or credit card debt.

Front

What is the importance of knowing your net worth?

Back

Knowing your net worth helps you understand your financial health and make informed decisions about spending, saving, and investing.

Front

What happens to net worth if liabilities increase?

Back

If liabilities increase while assets remain the same, net worth decreases.