Here is a definition of “NET WORTH”: Net worth is the value of all assets, minus the total of all liabilities. Put another way, net worth is what is owned minus what is owed.
When people sit down to figure out their net worth in the “ASSET” column are listed such things as :
- Equity in their home
- Money in liquid savings or checking accounts
- 401K and other retirement plans
- Cars, boats and other assets that are owned
In the “LIABILITY” column are such things as:
- Mortgage balances on their homes
- Auto loans
- Scholl loans
- Credit card debt
When calculators are used to help establish what your “Net Worth” is, I believe the most important “ASSET” and conversely “LIABILITY” is the current state of health and the chances of good health vs. bad health in the future.
When we are healthy, this major “asset” allows us to be productive in many ways: Continuing to work (and generate $$$), spending quality time with our family/friends and enjoying life. On the hand there are major liabilities associated with poor health: more $$$ spent on doctors, medications and procedures, less quality time with loved ones, etc.
I cannot state with any more fervor how much good health is important to each of our’s “Net Worth”. YOUR focus, fortitude and adherence to a healthy life style will exponentially add to your “Net Worth”. Good health is our most important asset.
And here is Buffalo Springfield’s classic “For What It’s Worth”.