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September 08, 2021 | Posted in:

Know This Number!

Personal Finance Tip: Why You Should Know Your Net Worth

Your net worth is all the things you own (assets) minus what you owe others (debts and liabilities). Understanding it can help you with financial decisions such as:
 

Student loans

A high net worth may require you to foot some or all of the tuition bill yourself.

Insurance

A high net worth can work in your favor when it comes to premiums.

Investments

Some investments are only available to those with a certain net worth.

Buying a Home

Banks want to see your cash compared to your debts. If your debt is too high, you may need to pay it down or increase your down payment.
 

Calculating Your Net Worth

  1. Reconcile your bank accounts and loans.
  2. Determine the value of your other assets. For some, such as stocks, you can find the current value online. For others, you’ll have to estimate what selling that asset would yield.
  3. Add up your assets, subtract your debts and the remainder is your net worth.

If you would like help calculating and understanding your net worth or learning how to reach your financial goals, talk with an Alloy Silverstein advisor today.
 

Further Reading:

Author:

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