If you have clarified your values and determined your saving, spending, giving ratio, the final financial vital to measure is your net worth. What is your net worth? What do you track with your net worth? How do you track your net worth? What can you use it for and why is it beneficial?
In this episode of the Finance for Physicians Podcast, Daniel Wrenne talks about how to calculate, track, and increase your net worth and decrease your debt.
- Net Worth = Total Assets – Total Liabilities
- Adding to assets or subtracting debt increases net worth
- Negative Net Worth: Part of the medical career track for physicians
- Compound Interest: Exponential growth when earning interest on your interest
- Net Worth: Changes over time, track it to monitor inefficiencies and progression
- Debt-to-Income Ratio: How high is your debt relative to your earning potential?
- Values/Goals: Net worth should depend on your plan for what’s most important