Many financial planners agree with us that ‘net worth’ is the most important number.
This number is a measure of our wealth (assets less liabilities) and plays a key role in financial planning. It also allows us to track our efforts in building wealth without getting lost in the details.
We should focus on building a diversified asset base of real estate, stocks and bonds, which will typically fluctuate in value from time to time as markets evolve through natural economic cycles.
Our measure of wealth is reflected in the net worth number and it should increase over time. Here is a calculator to work out your current ‘net worth’: