MASTERING YOUR MONEY PART 7 OF THE BOOK LAUNCH
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UNDERSTANDING YOUR FINANCIAL POSITION
DO YOU KNOW HOW TO DETERMINE YOUR FINANCIAL POSITION? Understanding your financial position starts with knowing how to calculate your net worth. It puts your money into perspective by looking at yourself in a mirror and determining whether you like the image of your financial position. Surprisingly, not many people know and practice the habit of calculating their net worth. Even those who know hardly do the actual calculation at least twice a year (June and December, if your financial year runs from 1st Jan. to 31st Dec.) Frequently Asked Questions 1. How does one calculate his or her net worth? 2. Is a net worth statement the same as a balance sheet? 3. Is a car or home an asset or liability? 4. Why is it necessary to calculate your net worth? 5. How can one determine the current monetary value of his or her assets? Net Worth It is the difference between what is owned (assets) and what is owed (liabilities). Net worth = Assets - Liabilities An asset is anything that has monetary v
