How We Calculate Our Net Worth~Now Calculate Yours!

What is Net Worth? An easy definition for net worth is that it is a simple calculation where you add up all the things you OWN which is also called an “Asset” and minus the total of everything you still OWE also known as a “Liability“. Net Worth = Assets – Liabilities How to Determine Net Worth Items like your house value, current value of cars if sold today (remember cars depreciate over time meaning they will always be worth less in the future), any investments you have which could be TFSA’s, RRSP’s, stocks, bonds, work or private pensions or cash in the bank are all assets. Assets can be liquid cash or less liquid items such as bricks and mortar (house), less liquid items would have to be sold to generate cash. What Is A Liability? Then, add up all the things you still owe money on like your mortgage, car loan, line of credit etc. All these are called Liabilities which simply means, you are still liable for  them. In other words they still need to be paid whether you have a job or not. After working out what my Net Worth is, what’s it gonna do for me? Calculating your net worth […]