Your net worth is a simple equation that says a lot about your financial standing – whatever that may be.
Even if you don't fly on private jets or play polo, this simple equation is an important tool that says a lot about your financial health."It's the first snapshot into an overall look at your finances," said Michael LaRiviere, a certified financial planner at Essex Financial in Connecticut.
Your net worth is essentially the sum of all of your assets, including cash, retirement accounts, college savings, house, cars, investment properties and valuables such as art and jewelry minus any liabilities, or long-term debt, like a mortgage, student loans, revolving credit card balances and any other personal loans."More often than not — especially for those under 40 — the number is going to be negative," said Daniel Routh, a CFP at Exencial Wealth Advisors in Oklahoma City.
If your net worth is in the red, you'll need to work on saving more and spending less. Start with the rates you are paying on borrowed money and begin chipping away at the highest-interest debt first, especially credit cards, followed by student loans.For student loans,from 5.05 percent for direct loans for undergrads to 6.6 percent for direct unsubsidized loans for graduate and professional students.
You may also be able to lower the interest rate on your student loans substantially, even as low as 3 percent or 4 percent, by refinancing. Then, keep on top of regular payments, Routh said. From there, work on building up your savings, particularly by participating in your company's retirement savings plan . You should be contributing at least enough to receive an employer match, if you are eligible for one — even if that means
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