Financial Freedom: The Value of Your Wealth Portfolio
If you want to build towards financial freedom, you need to build up a wealth portfolio. Your wealth portfolio is simply your financial net worth.
Do you know what your net worth is?
To work out what your net worth is or what your wealth portfolio is currently valued at, all you need to do is…
- Add up all your ASSETS and
- Subtract all your LIABILITIES
ASSETS are the items you own that have value and that can either generate income or be converted into cash.
Your assets include…
- Your home
- Savings and investments
- Your valuables
LIABILITIES are your debts that you need to repay.
Your liabilities include…
- Your loans
- Vehicle finance
- Credit and store card debt
- Anything you are bound to pay back
The Formula to Work Out Your Net Worth (Wealth Portfolio)
YOUR ASSETS (What you OWN) – YOUR LIABILITIES (What you OWE) = NET WORTH (WEALTH PORTFOLIO)
According to the latest statistics on debt and investments, many underestimate the value of their debts and overestimate the value of their savings and investments.
“Be sure you know the condition of your flocks.” (Proverbs 27:23)
If you want to build towards financial freedom, you need to know these figures. Take time out to do a simple assessment by applying this formula.
What does your WEALTH PORTFOLIO look like?
Has your NETWORTH (WEALTH PORTFOLIO) increased or decreased over the last year?
Look at the numbers. Know where you stand. Set up a plan to build your WEALTH PORTFOLIO.
The Recipe to Build Your Wealth Portfolio is Simple
All you need to do is SHRINK your LIABILITIES. Reduce your DEBT by paying it off and ensure you do not take on extra unnecessary debt.
GROW your ASSETS by converting more of your income into ASSETS. In other words, build up your SAVINGS and INVESTMENTS.
Related: Savings and Investments
“Whoever gathers money little by little makes it grow.” (Proverbs 13:11)
