What is your net worth? | The NY Journal

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What is your net worth?

Knowing your net worth could help you if you need money immediately.

Photo:
Gerd Altmann / Pixabay

Liquid net worth is a much more realistic reflection of your financial situation should you face an immediate need for money, such as a medical crisis or an investment opportunity. That is your liquid assets matter more when unforeseen events occur, as reported in The Cents of Money.

First of all, you should know that your personal balance or net worth is what provides a general snapshot of your financial situation at this time. In other words, net worth is everything you own, minus everything you owe.

However, although your net worth gives you a general picture of your personal financial situation, it does not differentiate the assets that can provide you with liquidity quickly and easily. I mean, what it does not tell you what money you can access easily and quickly.

Thus, your liquid assets are those that you can turn into cash quickly with little or no loss in value.

Some of the most liquid assets are cash, as well as investment accounts, as well as financial instruments that can be easily converted to cash with little or no loss in value.

–You may also be interested: A calculator tells you how much money you could receive in a second stimulus check

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