Net Worth

A high salary does not mean high net worth. We know people who earn $ 30,000 a month with negative net worth, and people who earn $ 4,000 with built net worth. The difference between the two is the only one that matters in the long run.

The formula

Net worth = total assets − total liabilities. Calculating takes between 30 and 60 minutes in the first year. From the second year, it becomes a quick update.

What counts as an asset

• Money in checking account, savings, digital wallet
• Investments: fixed income, stocks, funds, pension
• Real estate at current market value
• Vehicles at current sale value (FIPE)
• Significant goods (jewelry, professional equipment with resale market)

What counts as a liability

• Outstanding balance of real estate financing
• Outstanding balance of vehicle financing
• Open personal loan
• Contracted installments (future card, stores)
• Overdraft in use
• Credit card revolving