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What is Liquid Net Worth and How to Calculate It?

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What is Liquid Net Worth and How to Calculate It?
posted Jul 4, 2017 by Ananya Saha

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A growing liquid net worth gives you the flexibility to make changes in your life and enjoy what you have earned.

Net Worth Defined
What is liquid net worth? A person's wealth or net worth is the value of the assets they own minus the debts they owe. Assets include investment accounts, homes and other real estate, cars, boats and the shoes in the closet. For most people their debts will be a mortgage if they own a home, car loans, personal loans and credit card debt. The term liquid net worth narrows the selection of assets to those that can be turned into their cash value in a short amount of time. Liquid assets include checking and savings accounts, stock broker accounts, bonds and CDs and mutual funds.

Non-liquid assets would be your home and other real estate owned, cars, retirement plan assets and cash value life insurance. Calculate your liquid net worth by adding up your liquid assets and subtract any debts not tied to other assets like car loans and mortgages. Debts that reduce liquid net worth are credit card balances and personal loans.

answer Jul 4, 2017 by Mukul Chag
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