Mika
VIP Contributor
In order to understand your financial health, you need to know about your net income, net worth, and liquid net worth.
Your net income is your earning after you pay your taxes and payroll reductions. Net income is different from net worth.
Net worth is the total value of your assets in terms of current market price after liabilities and debts deduction.
Liquid net worth is the portion of your net worth that can be easily converted to cash, for example, stocks, bonds, crypto assets, etc. Jewelry and property are not liquid assets. Liquid net worth will always be lower than your net worth.
Calculating your net income, net worth and liquid net worth will help you understand how much you own, how much you owe, and how much you need to earn in order to pay your debts and save for retirement.
Your net income is your earning after you pay your taxes and payroll reductions. Net income is different from net worth.
Net worth is the total value of your assets in terms of current market price after liabilities and debts deduction.
Liquid net worth is the portion of your net worth that can be easily converted to cash, for example, stocks, bonds, crypto assets, etc. Jewelry and property are not liquid assets. Liquid net worth will always be lower than your net worth.
Calculating your net income, net worth and liquid net worth will help you understand how much you own, how much you owe, and how much you need to earn in order to pay your debts and save for retirement.