The article that I just read discusses briefly about the calculation of net worth and why is it useful.
Net worth = (Total Assets) – (Total Liabilities)
Assets include -
* current account and savings
* capital in stocks and mutual funds
* debentures
* life insurance surrender cash value
* home, real estate investments
* cars/jewellery/furniture etc.
Liabilities include -
* mortgages
* car loan, home loan, college loan etc.
* credit card debts
That makes it simple to calculate the net worth and I think this is what is the accurate measure of a person’s financial success and not whether one rides a mercedes and goes for a vacation on an island.
Filed under: investing
