![]() Would you take money out of retirement as a loan or pay an early withdrawal penalty and taxes? Would you have to downgrade your car? Maybe in an extreme circumstance, you might have to downsize your house. What happens if your car breaks down or you need a new HVAC system for your house? What happens if you have unforeseen medical expenses? Liquid net worth is all about your ability to navigate any short term bumps in the road without damaging your long term financial future. That’s where liquid net worth comes into play. Net worth is a great measure of your financial situation.īut what net worth doesn’t tell you is what would happen if you had to come up with money quickly. Once you have that together, calculating your net worth is easy: The best way to calculate it is to create your personal balance sheet, a list of all of your assets and liabilities. It’s how much you have left over if you subtract the value of everything you own (total assets) from everything you owe (liabilities aka debt). Total net worth is something you might be familiar with. Family Budget Expert’s Liquid Net Worth Calculation.Liquid assets that don’t need to be discounted. ![]() Vehicles – Liquid Net Worth Calculation.Retirement Accounts – Liquid Net Worth Calculation.Real estate – Liquid Net Worth Calculation.What is liquid net worth and how do you calculate it?.
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