Knowing your net worth will give you an accurate picture of your financial status which allows you to access your financial advancement or regression.
Your net worth is calculated by adding up the value of everything you own (assets) and deducting the sum of all your debts and liabilities. Having more liabilities than assets, will create a negative net worth. Over-borrowing or poor financial management could also snowball to a large amount of liabilities.
The truth is that increasing your net worth only comes from decreasing your debt and increasing your assets. Professionals recommend reviewing your net worth every six months to a year. Be reminded that your net worth is not constant and could be irregular throughout your adult life, varying on your income level and spending habits.
Successful growth in your wealth does not happen at an instant and requires cautious and continuously planning. This first step will give you an insight of your progress and foresight to improve your financial outlook to provide yourself with a financially sound future.
Have you calculated your net worth? Do you have positive or negative net worth? Which area of your expenses can you cut down to increase your savings? With the increased in savings, what are the financial instruments can you invest in to grow your funds for your future?