Member-only story
The Four Types of Wealth
It’s not just about money
When people think about wealth, they often think about someone’s superior net worth, expensive cars, and huge house. This is certainly part of the concept of wealth, but not the only one and perhaps not even the most important.
The Four Types of Wealth
Net Worth (Financial Wealth)
Someone’s net worth is certainly a good beginning to assess how wealthy he or she is. To determine your own net worth, simply deduct everything you owe from everything you own.
For example, if you have $300000 in your retirement accounts, 20k in savings, and your house is worth $400000, you own assets of $720000.
If you have a mortgage balance of $350000, a car loan of 30k, and 15k of student loans, you owe $395000.
720000–395000= 370000
Therefore, your net worth would be $370000. This would place you in the bottom 50% in the U. S. overall but much higher if you achieved this net worth by your thirties.
Some people check their net worth every quarter, others only on January first every year, “net worth day.” As long as you continue to save and invest and pay down your debt, there will be an upward trend in your net worth.
