Net Worth

Net Worth

The accounting equation is,

Assets = Liabilities + Equity

Using algebra, we can move that around a bit.

Equity = Assets – Liabilites

When looking at personal wealth, “equity” is better called “net worth.”

Net worth = Assets – Liabilities

Dating Lesson

OBVIOUSLY, a person’s value is not determined by their net worth. In fact, compared to a person’s sense of humor, hopes, dreams, attitudes, beliefs, etc., it could be one of the least important variables in deciding whether someone is dating material. BUT questions about finances are often avoided because people think they may be awkward. Well, they will be.

But common sense demands that you ask the questions before you ask the question.

Here are some things to start you thinking:

That may be a great car, but how long will he be paying on it? He lives in a great location, but how long is tied to that lease? He may be a lawyer, but ask how much school debt he is still owes!

Guys, same questions. No, these are not first date questions. Yes, it may kill the romance at the moment. But nothing kills the romance faster than, “Honey, I love you. But we’ll be paying off my debt for ten years.”

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